09/03/2023
Social commerce is a combination of e-commerce and social media, allowing users to purchase products or services directly on social networks. Increasingly, social networks have become part of all of our lives, becoming actual means of information. They are now also acquiring the role of purchasing platforms, as it has always been the case in Asian Countries: in fact, according to a Business Insider survey, 64 percent of consumers have made a purchase after seeing a product on social media.
As mentioned, the origin of this trend comes from China where platforms such as Wechat, Douyin (Tik Tok) and Kuaishou are estimated to have generated sales of $351 billion in 2021. Consider, too, that China's is expected to account for 14.3 percent of all e-commerce in 2023, compared to only 4.9 percent in the United States.
In Europe and America, the most popular social commerce platform at the time is Tik Tok; it is closely followed by Facebook, Instagram, and Pinterest, where Brands can create product showcases, post paid ads, and interact directly with their followers. But new platforms and channels are emerging every day which are integrating the user experience on social networks with the shopping experience.
Many platforms have tried to gain competitive advantage in social commerce, but have not been able to replicate what has worked so well in China. The platform that has come closest to this goal is TikTok itself, a social that originated in that Asian country.
It is estimated that during 2023, TikTok will gain nearly 10 million on-platform buyers: nearly twice as many as Facebook, Instagram, and Pinterest.
Generation Z is the driving force behind this growth, a group of "mobile native" consumers who have not yet developed fixed habits when it comes to online shopping. According to recent research, the main reason Generation Z consumers made their last purchase on social media was because they found the product they liked at the right time and were able to purchase it contextually with the greatest of ease.
TikTok's discovery-based approach aligns,moreover, with the way Generation Z approaches shopping, which is why it is precisely TikTok that will continue to guide its users through product discovery using the same of algorithms it uses to power its personalized video content recommendations.
This new frontier of online shopping presents some challenges to face, but it also offers many advantages. For Brands, it represents an opportunity to reach a wider audience and build closer relationships with their customers. For the consumers, on the other hand, it offers the convenience of discovering, comparing and buying products directly on social networks.
In fact, Social Commerce is estimated to have accounted for more than $30 billion in sales globally by 2022, a significant share of total sales made online.
The main challenges that Social commerce presents are related to the security of customer data, (data protection), an issue increasingly raised specifically by Gen Z, the management of returns, and customer satisfaction.
Social commerce is a rapidly growing phenomenon, because it offers Brands and consumers many advantages and it is successful because it combines two fundamental aspects of the purchasing process.
On the one hand it offers speed, effectiveness and high targetization, while on the other hand it makes possible to share the buying experience and receive support from friends and followers before and during the purchase process.
Thus, it is expected that social commerce will become one of the real trends of 2023 and should become a selling point for every Brand.
What is your company doing to create effective Social Commerce strategies and not miss this very important opportunity to gain new market share?
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