📽️ Why are Amazon and Swiggy Obsessed with Short Videos?
Here’s why not just YouTube and Instagram but even e-commerce apps want to make short-form content.
$193 billion in economic footprint, $45 billion in revenue, 2.2 billion users and 659,000 jobs created.
With decreasing attention spans and increasing need for instant gratification, the short-form video content industry has been one of the few to gain mainstream acceptance during the pandemic.
As TikTok made short-form content cool, every social media platform wanted in on this gold mine. Instagram Reels and YouTube Shorts (to which Shantanu is completely hooked!), were born.
Two years later,
Has this trend been restricted to only social media platforms?
How are brands like Amazon leveraging content to their advantage?
And most importantly - is live commerce mainstream now?
We will answer all these questions in today’s piece. ReadOn…
🤑 E-Commerce Platforms are Obsessed with Short Videos!
Let’s agree to this: Short Videos are damn addictive!
In an endless scroll of a thumb, we seem to have lost hours!
Why do we fall for this trap? Because…
Humans hate making non-life-threatening decisions: With shorts and reels, there is no decision fatigue. You only have to invest one minute, and then the algo takes over. It keeps showing you similar videos for the rest of the night.
Scrolling releases dopamine: The anticipation chemical in our brain (also known as The Molecule of More). Our brain wants more. And even when videos get repetitive or boring, we keep scrolling in the hope of more dopamine. And with every incremental video, the dopamine rush reduces. So we keep chasing!
Don't believe us?
A BCG report noted that 83% of the 602 people surveyed said short videos made them “joyful”, and 96% said they positively affect their individual lives.
With attention spans falling by 25% to around 8 seconds, short-form content is here to stay.
And streaming services like Netflix have jumped in to capitalise on this changing human behaviour. They have launched their own short-form content on their platforms.
Summarising the key takeaways till now, we know two things:
Short-form content will keep viewers hooked to the platform, thereby
Has the potential to increase retention
But why are Flipkart, Swiggy and Amazon (the shopping app) leveraging video content?
🎲 The E-commerce Bet
Look at India’s video streaming landscape:
Number of YouTube viewers: 467 million
Average time spent daily watching online videos: 67 minutes
While 467 million watch videos on YouTube, only 150 million Indians shop online!
So, why not use videos to convert viewers into paying customers?
Note: This insight isn't the only thing that has gotten e-commerce companies to spend millions on content.
Let's look at Amazon to understand their motivation better.
🧠 Amazon's Strategy
Amazon already has a video content platform (Amazon Prime) but it has built another short-form content platform within its shopping app, called Mini TV (well, not sooo short - looks like average time per episode is ~8mins).
Take a look at Mini TV’s catalogue. It spent $13 billion on TV, movie and music content in 2021 (this includes Amazon Prime and Amazon Music)!
What Works About this Strategy:
Amazon's Mini TV is easy to find on the app. Plus, Amazon also posts clips from the episodes on YouTube to increase visibility.
Amazon has proof that Prime users tend to spend 4x more than regular users on Amazon. So, bringing more people into its ecosystem via Mini TV could be a great way to ensure repeat sales.
If/when people start coming to Amazon to specifically watch its content, it could plug in products to increase sales.
These product placements would further help Amazon increase its revenue (these videos are already generating ad revenue).
The Bad Thing About this Strategy:
💡 ReadOn Insight: With Amazon providing so much good content, people who've logged on for impulse shopping could just get their dopamine hits via scrolling through the content. This could in fact reduce the sales!
📱Going Native
Platforms like Swiggy and Nykaa have started hosting influencer-generated content on their own app:
This is a cost effective way also: as Swiggy does not have to spend millions of $ on creating its own content.
These features are super new - and we don’t know if they can create an incremental impact - what we do know is that measuring any impact through these derivative videos is very difficult (for Swiggy as well as Amazon).
But, they are not leaving any stone unturned to hook users to their platforms. They have adopted yet another short video strategy (courtesy, TikTok) that helps them measure ROI: live commerce.
🤓 The Rise of Live Commerce
Live commerce is like Naaptol ads but with celebrities and influencers.
Nykaa, Amazon, Myntra and many other e-commerce websites have started leveraging this, and the space is set to be worth $4-5 Bn in India by 2025.
It is becoming popular for the same reason as shorts: it is engaging and captures attention.
It also solves a major problem of online shopping: you get to see what the product will look like on a live person. A person that you like and admire.
💡 ReadOn Insight: In marketing, it’s very important to be able to track the exact impact and ROI of a certain campaign (or short video) on sales. If a cause-effect relationship can be established, success can be repeated by repeating the “cause.”
Live Commerce offers this advantage over generic short video content and product placements. It’s more targetted, and return on investment (or spends) is easier to calculate and measure.
So, we could see many e-commerce companies ditching short-form content and channelling that money into live-streaming.
All in all, video seems like the future of content. Different platforms are taking different approaches, but there’s no clear winning approach yet.
We will now take your leave - gotta scroll through some delicious food-related YouTube shorts!!
Until next time, ReadOn…
P.S: We would love to know if you're watching short-form content produced by e-commerce brands and if it has actually made you shop more (10-sec form to share your response)!
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