YouTube Expands Shopping Features Amid Digital Ad Slowdown

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YouTube is expanding its social commerce features as it introduces shopping features to the world’s biggest video streaming site.

The move comes as a way of diversifying income as the digital ad slowdown starts to affect the tech sector.

Its new ecommerce feature has been introduced to its Shorts medium, the Alphabet-owned company’s attempt to edge in on TikTok‘s short-form video dominance.

Users will be able to shop for products as they scroll through their YouTube shorts feed.

The platform is also testing new commission schemes for influencers who sell products through links in videos while it battles to hold on to creators amid hot competition from social media rivals, mainly TikTok.

“Our goal is to focus on the best monetization opportunities for creators in the market,” YouTube Shopping’s general manager Michael Martin told the Financial Times.

YouTube’s advertising sales fell and missed analyst expectations for the first time in Alphabet’s last earnings.

The social commerce market is expected to grow by more than $2 trillion globally by 2025, however, it has so far been the most successful in China, where shoppers purchased $352 billion worth of goods last year, according to management consultancy McKinsey.

The company is planning on rolling out two pilot schemes over the course of 2023.

It is currently piloting its “affiliate marketing” scheme — paying commission to creators that sell products — with a select number of US-based creators.

YouTube, the merchant and the creator all receive an undisclosed cut of each sale made through the new feature.

Creators will receive 45% of the revenue made through displaying ads between videos on Shorts from early next year.

Last year, popular Chinese influencer Austin Li sold over $1 billion worth of products in a single livestream broadcast on Chinese shopping platform Taobao.

“It is very much an endorsement model, versus a more traditional advertising model or a paid-placements model,” Martin add.

Despite the success of livestream shopping in the east, Martin said he felt it would be a period of time “until live shopping emerges at scale” globally.