Live Commerce – it is not just a side offering anymore

Caroline Perriard looks at the latest online shopping trends and discusses what brands can do to not only protect their IP on these channels but also how they can take advantage of this new way of engaging with their customers

Live Commerce is like a new generation of shopping channels, converted from TV channels to livestreaming social platforms. In the IP world, the growth of live commerce means an increase of possible violations of intellectual property rights. The various models offered via hosts, dedicated platforms or standard social media channels require brand owners to adapt their monitoring and defense strategy. Simultaneously they will need to determine how they plan to market their products via live commerce.

What is it live commerce?

Live Commerce, also called Live Shopping or Livestreaming e-commerce is an online sales channel that allows consumers to instantly purchase a product presented in a live-streamed video. The live stream is in many cases offered by a brand or a distributor and can be accessed for free by those wishing to take part. Consumers are simultaneously spectators and buyers. Often the access to this type of content is offered via a dedicated platform or the usual social networks we all know.

Influencers frequently host the live event, but they can also be presented by a brand representative or an industry expert. The host describes, models, and tests out various products for their audiences. Consumers who watch these live shows enjoy the entertainment brought by the engaging hosts, and get to have any concerns they might have regarding the product addressed right there and then. They can also interact through comments and emojis, while instantly closing a purchase.

During these livestreams, promotions and giveaways are also usually offered, but only within a certain period of time. Livestream shopping becomes especially effective this way because the sense of urgency is emphasised due to exclusivity or limited availability. What’s more, due to the large audiences watching, the concept of being left out of a potentially good deal is higher.

Asian markets are more accustomed to livestream shopping, which steam back to 2016 when Alibaba launched one of the first live commerce platforms -Taobao. China now has the highest number of online shoppers in the world with 10% of purchases being made over live commerce.

Livestreaming e-commerce use social networks such as Instagram, Facebook, TikTok. Independent platforms and apps have also emerged based on a D2C Channel (distributor to consumer), for example Douyin (the Chinese version of TikTok) or Kuaishou/Kwai. Apps like Ghostretail, Hero/Karna, Wishbi, Bambuser, Goinstore have also sprung up in Europe.

Is this channel open to abuse?

Fake branded products and the misuse of brands online is growing alongside the rise in e-commerce. Counterfeiters are piggybacking on the success of legitimate brands with the aim of profiting through the sale of fake branded goods.

Whilst 92% of online shoppers are aware that counterfeit products are advertised and sold online, three fifths of this group concede that they would be either unable or are unsure of their ability to decipher between real and fake. So, it´s perhaps unsurprising to hear that 12% of those questioned have unintentionally purchased a counterfeit item whilst shopping online, once again highlighting the need for counterfeit monitoring and protection¹⁾.

Purchasing a fake product can often lead to a negative brand experience with many buyers ceasing to buy products made by the official brand. With such significant impacts on a brand’s reputation and bottom line, it is simply not something companies can ignore.

Responsibilities depend on the model of sale

Live commerce follows different models of distribution, depending on who is engaging with the community (the host or the anchor), whether a retailer is hiring hosts to livestream or whether an independent platform offers the set up to publish video content.

We could define the respective responsibility as such:

1. The host is responsible if this particular host sets up a studio by registering an account on a livestreaming platform and engages in livestreaming marketing activities as an individual host. In this case, the host is also the retailer.
2. The retailer or supplier is the responsible party when the livestreaming account is registered by a retailer or supplier to set up a studio, and the livestreaming marketing activities are performed through a contracted host.
3. The livestreaming platform is the responsible party when it conducts the livestreaming marketing activities by setting up a studio on its own website or app, and the host is only in a service relationship with the platform.

Besides responsibilities, live commerce can create risks due to these various models of offering the products and services. For example, the:

• Attribution of livestreaming accounts can be unclear (involving multiple subjects such as retailers, hosts, and online platforms.)
• Fake identity of the seller with no contact point, reference or existing support
• Lacking information on applicable law and jurisdiction
• False propaganda and misleading claims
• Responsible party may not know they are offering counterfeits products
• Fast pace of livestreaming ecommerce creates a significant barrier to IP rights protection
• Given that there is no physical warehouse or space that limits the number of goods or buyers, the quantity of the goods for sale during livestreaming is massive and the product information disappears right after the quick sales are made
• Fast-moving appearance and disappearance of the goods make it much more difficult to spot or collect infringement evidence.

What to assess first in the case of an unauthorised sale?

The standard defense approach needs to be tailored to the specific sale channel.

First, it is necessary to define who is the responsible party and whether they know/should have known about the potential infringement.

Then it is essential to review the available remedies. In China for example, one would need to consider all types of legislative acts, for example: advertising law, anti-unfair competition law, trademark law, copyright law, and e-commerce law. Chinese e-commerce platforms are expected to take down infringing content upon being notified by IP rights’ owners. If they are aware or should be aware of the infringement, they also have a duty to take necessary measures to stop IP infringement committed on their platform, otherwise they will be jointly liable.

Livestreaming platforms tend to be associated to e-commerce platforms and offer take-down procedures. If the platform has established an identity authentication system, it will be obliged to take necessary steps to discharge its duty after receiving notice of the infringement.

It is also advisable to pay attention to competitors’ rights acquisition and rights protection behaviours. In addition, brands should carry out the necessary investigations on the market distribution of the suspected infringing products by conducting regular market monitoring.

In many countries, when considering copyright, we recommend evaluating whether the use would be considered as fair, an act of performance or any violation of the legitimate interests of the copyright holder.

What actions to take against unauthorised sale?

There are different initial actions that the right holder can undertake, such as lodging a complaint to the platform, demanding prohibition of the relevant content or user, and requiring the platform to provide the identity information of the infringer. It is also possible to request the “suspension of playback” or freeze accounts in case of repeated violations.

It addition, the rights holder should naturally preserve evidence of the infringement in a proper manor, including:

• Capturing and saving screenshots of the infringing products during the livestreaming event;
• Record the sales volumes and/or preserve information from any promotional pages;
• If possible, purchase the infringing products to confirm the infringement details and identify the relevant manufacturer; or
• Preserve the infringing evidence by a notary public or time stamping.

Comments for entities or brands thinking about entering the live commerce market

From the perspective of the livestreaming hosts, before accepting an engagement, the livestreaming agencies/companies should take steps to ensure that they will not become partners of IP infringement, such as by promoting counterfeit products. The hosts should check the background of the brand to see if it is legitimate business or a copycat, and ensure that the products being promoted are not counterfeits.

For the brands, they should maintain close contact with the livestreaming hosts and agencies, and diligently supervise their work. For example, companies should discuss in advance the content and format, and regularly remind the hosts not to use any third-party music, photos, pictures or artwork in the livestreams without obtaining the appropriate authorisation. To ensure that the product information given by the host is accurate, the company is responsible for providing adequate product training to the hosts or pre-approved claims.

Here a few recommendations worth remembering:

• Brand owners and hosts should do their homework and be aware of any legal issues relating to advertising and consumer protection (false allegations or claims done unintentionally).
• Brand owners should of course ensure all the necessary paperwork is in place to ensure a solid foundation for their intellectual property rights, including all relevant certificates that will be able to demonstrate their rights.
• In the live broadcast, it is recommended to show the IP certificate of the product in an natural place, so that consumers can clearly understand it is an authentic product and easily enquire if needed.
• Right owners can also publish consumer guidelines to help consumers identify genuine and fake products and consume rationally.
• As to live broadcast anchors and platforms, they should actively establish contact with rights holders and set up special monitoring and supervision processes.
• Suppliers of live streaming products, if they are not the direct owners of the intellectual property rights of the relevant products, they should also obtain the required authorisations before they can sell them.

Conclusion

Livestream shopping is rapidly changing the way brands can engage with customers, with more companies exploring the platform. While it still is relatively new to some parts of the world, e-commerce companies are looking towards livestreaming as a means to boost sales in the years to come.

At BRANDIT, we collaborate with brand owners to tackle these infringements with a creative approach in mind. The concept of “know your customer” is essential to leverage the right defense mechanisms and take swift actions.

¹⁾ https://www.statista.com/statistics

Author: Caroline Perriard, Co-CEO, BRANDIT