YouTube will add shopping features to ‘Shorts’

November 18, 2022 by
Frank Calviño

YouTube will launch a new shopping feature within its ‘Shorts’ video format. In this way, the social network would be ahead of a very similar service that will also launch TikTok, the app that YouTube sought to counteract when it decided to launch Shorts. 

This means great future sales possibilities for e-commerce and a new access channel to online shopping for consumers.

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The feature is already being tested in some creator accounts in the United States, India, Brazil, Canada, and Australia. Although the company expects to expand product tagging in Shorts to more creators and countries in the short term. 

What is certain is that time is important in this competition that Youtube and TikTok are waging in the field of shopping associated with short videos. 

Video shopping wars? 

A few days ago multiple media outlets pointed towards the fact that TikTok could be thinking of setting up its own supply chain to act as an e-commerce/marketplace and expand the reach of TikTok Shopping, an e-commerce solution that allows sales and purchases to be made from the social network thanks to its partnership with Shopify. 

The shopping feature started in the UK, with the idea of boosting sales for the large community of small online sellers using Shopify in those countries.

Separately, YouTube is also experimenting with an affiliate program in the U.S. for content creators who sell on the platform. In this beta phase, referral links are being included in posts, an option that the company plans to progressively expand to more creators by 2023.

These changes come two months after YouTube announced the new YouTube Partner Program that will be in place in early 2023. 

Creators who meet two requirements - accumulating 1,000 subscribers on Shorts and 10 million views in 90 days - will be able to sign up and receive 45% of ad revenue from their videos on Shorts.

A profit boost for Youtube in times of need? 

These steps taken by the company come as no surprise, as despite Shorts reaching 1.5 billion monthly users, its quarterly ad revenue was down 1.9% year over year. This is due to the post-Covid economic slowdown, which has led many advertisers to cut their ad budgets. 

According to Alphabet's quarterly earnings report, in the third quarter of 2022 YouTube grossed $7.0 billion (about €6.82 billion) from its display ads, while in the same period of 2021 it achieved the sum of $7.2 billion (about €6.946 billion).

By virtue of increasing its advertising revenues, YouTube has been working to make its platform seen as a shopping destination by including product launches, ads with shopping links, and a live shopping feature. 

The latter did not garner the expected enthusiasm among Western users, so it is now focusing more on Eastern markets, including South Korea. 

In order to expand its shopping offerings, the company announced in July this year a strategic alliance with Shopify, so that the platform's users can integrate their stores and promote products through the social network.

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