YouTube has added a ‘gifting’ feature to its vertical streams, ramping up the competition for livestream e-commerce

• YouTube launched a gifting feature for its vertical livestreams, mirroring TikTok’s model.
• ByteDance, which owns TikTok, has dominated e-commerce in China.
• Google is offering a 50% bonus to creators who enable gifts on YouTube for the next three months.

YouTube is adding a “gifting” feature for vertical livestreams that allows users to purchase digital gifts for streamers, similar to a feature that fuels livestream sales on TikTok.

Creators who receive the gifts through the program will earn “rubies,” which are redeemable for one cent each, the company said in its announcement this week.

TikTok’s LIVE Gifts feature operates similarly. It lets app users purchase “coins” that can be used to buy virtual gifts of monetary value for livestreaming creators.

Creators on TikTok who receive the gifts can also earn “diamonds,” which the company rewards based on the popularity of the livestream. Users can use diamonds to obtain “reward payments” from TikTok in the form of money or virtual items.

E-commerce through livestreaming platforms has become a lucrative and competitive channel for revenue. In 2022, total US e-commerce sales exceeded $1 trillion, Forbes reported. Live shopping accounted for about $20 billion of that. Livestream e-commerce in the United States is expected to grow to $68 billion by 2026, according to Statista, a data research firm.

TikTok parent company ByteDance has dominated livestreaming e-commerce in China through TikTok’s sister app, Douyin. Douyin generates hundreds of billions in annual sales, primarily through influencer livestreams. Over the last few years, ByteDance has expanded its e-commerce footprint into the rest of the world’s markets through TikTok.

The TikTok Shop also lets creators partner with the app to sell their own products and other products through affiliate links.

Last month, TikTok gathered 300 TikTok Shop partners in a hotel near its office in Culver City, California, for its first e-commerce summit in the United States. The creators participated in feedback sessions with TikTok staffers and shared ideas on influencer affiliate marketing, with live selling the focus of the event, five attendees previously told Business Insider.

Google is also looking to expand its own shopping feature. YouTube Shopping allows creators to make “collections” of products that viewers can purchase. YouTube shopping is available in the United States and China, and Google expanded the feature to Indonesia this week, the company said in a release.

To grow its market share, Google is incentivizing creators to get in on YouTube’s new gifting feature early. The company said eligible creators can receive a 50% bonus on received gifts of up to $1,000 for the next three months.

Gifts on vertical YouTube livestreams will appear as an overlay on the livestream video, “enhancing the live experience and creating a new way for you and your viewers to interact and have fun,” Google said.