Social commerce combines the dual strengths of social media and ecommerce. It harnesses the immense popularity of social media to make sales directly through leading social platforms.
As of the beginning of 2022, a staggering 4.62 billion people across the globe use social media, marking a 10.1% YOY growth.
With social media usage growth now hitting double digits, it comes as little surprise that the major social platforms are rushing to step up their efforts to capitalize on and optimize their ecommerce capabilities.
Social media has long been woven into much of our everyday existence.
The rise of social commerce will permanently alter how we approach another major aspect of our lives — the way we discover, browse, and purchase products online.
Now, as social media platforms battle to streamline their commerce offering, the opportunities for brands of all sizes become vast, offering a route to potentially untapped audiences and a genuine game-changer in growth prospects.
According to a report published by Strategic Market Research, the global social commerce market could become a USD 7.07 trillion industry by 2030.
What is social commerce?
So, what exactly is social commerce, and how does it work? We spoke with the team at TikTok to discuss the rapid growth of the phenomenon:
“Social commerce is product and service sales made through social media platforms. The commerce experience happens on the respective platform, from discovery to check-out. For example, if you see a video on your TikTok feed about a skincare product, click ‘Add to cart' or directly on ‘Buy’ and check it out within the app. After the purchase, you can continue scrolling through your feed.
“On TikTok, social commerce takes an extra step forward, and we call it community commerce. Our community creates conversations that help brands take off, sell out products, and enter the zeitgeist - a tidal wave powered by large and small creators whose reviews recommendations, and honest looks at products excite the community. And that’s why we love it. Our community created this.”
Social commerce vs ecommerce
Does social commerce have an advantage over ecommerce? After all, ecommerce already offers substantial benefits for both brands and consumers, including increased convenience and efficiency compared to brick-and-mortar stores.
So how does ecommerce compare to social commerce - and which is better for your brand?
The unique advantages of social commerce:
Always present
Social media takes up a significant chunk of people’s daily experiences. 62% of the world’s population are active on social media, using an average of 6.7 platforms, and spending 2.5 hours each day on social media. Consumers spend more time than ever on social media channels – so this is the best place to find them.
Optimized for Engagement
All social media platforms leverage a proven behavior modification model originally pioneered at the Stanford Behavior Design Lab. Each platform is further optimized to increase engagement among users in unique ways, while still using the same basic behavioral levers to keep users scrolling, tapping, and coming back for more.
Social proof
Online retailers know that social proof is of paramount importance to overcoming doubt and growing sales. With social media, social proof is built into the platform. Within seconds of making purchases, consumers can share the joy of their recent purchase. Content creators and influencers play an important role here too, and these greatly improve the perception of your brand. 45% of consumers in the USA say that they are inspired to trust a brand when they view a positive endorsement from a content creator they know and like.
Still growing
Social commerce is a growing phenomenon. The social commerce market in the USA is estimated to be worth US$100 billion in 2025, growing to US$144 billion in 2027. Globally, we expect a CAGR of 30.2% between 2022 and 2030. By this point, the worldwide social commerce market will be worth US$6.2 trillion.
What are some of the most common mistakes brands encounter when selling via social?
As with any new business practice, various hurdles exist, and managing an omnichannel advertising approach can prove challenging. The TikTok team shared three of the most common pitfalls that brands encounter regarding social commerce.
Without a clear strategy and accurate reporting, brands can lose track of their inventory when posting across multiple channels.
When promoting across multiple channels without insight, brands may find it difficult to increase conversion rates without experimentation.
Since each platform is unique in its offering and setup, brands may struggle to find where their content fits and how it resonates with different users. With proper understanding and creativity, most content can be reconfigured to perform better on other platforms.
Reasons to adopt social commerce
There are many reasons to adopt social commerce as part of your online and multichannel strategy. Social commerce is on the rise, with a growing share of online sales happening directly on social media platforms.
Furthermore, the expenditure per customer via social commerce is expected to double by 2027, reaching an average of US$1224 per user.
Consumer behaviors are changing too. Younger consumers now use social media as a primary tool for researching products and potential purchases, taking over from search engines as their go-to for finding information and encountering new products or brands.
Given the advantages listed above, all brands should strongly consider adopting social commerce as a natural extension of their social media and customer engagement strategy.
The best part is that this isn’t a binary choice – you can use both ‘regular’ ecommerce and social commerce as part of a multichannel sales strategy. It is best to think of social commerce as ‘just another kind of ecommerce sales channel.’ You’ll need to apply a different strategy to grow sales, but every channel requires a customized approach, on some level.
Building an effective social commerce strategy
Your social commerce strategy is an opportunity to leverage your brand’s lifestyle and image to inspire and connect with your consumers’ own aspirations.
You can find more information about building your social commerce strategy in our eBook, however, as a general guide it should include:
- Looking carefully at the special requirements of social commerce
- Identifying key audiences for targeting with content and ads
- Determining your content creation strategy
- Considering partnerships with influencers and content creators
- Meeting the expectations of users on each platform
- Enabling agile and flexible ecommerce management operations
- Considering fulfillment via the social commerce channel
- How to list products and manage sales efficiently from day one
- Devoting a little extra time to each new channel to get the best result
More than any other sales channel, personalization is the key to success with social commerce. This applies to both your audience and platform strategy; for example, Reddit users will expect more detailed descriptions, whereas TikTok users will prefer more ‘authentic’ personal recommendations that include an emotional component.
One area that can potentially slow your growth is the management of product listings, as many social commerce platforms use their own software tools for this. To reduce friction in your processes, it’s a smart move to use a complete multichannel ecommerce management solution like ChannelEngine.
This approach streamlines your product content creation and management, as well as order handling. It also allows you to gain insights from all sales channels and apply these learnings to your future sales optimization.
How China has set the pace
While much of the West has just begun scratching the surface of what is possible with social commerce, the model has already proved wildly lucrative in China.
Last year, in the lead-up to Alibaba’s annual ‘Singles Day’ sales, the platform turned to two celebrity streamers to drive sales on China’s biggest shopping day. The results were astounding.
During a 12-hour stream hosted on Weibo, Austin Li Jiaqi, China’s most famous celebrity streamer, generated an eye-watering $1.9bn USD worth of sales. In comparison, fellow streamer Viya raised an additional $1.3=2bn USD.
What are the different modes of social commerce?
Social commerce transactions generally fall into two methods: Semi-closed loop (lead-out) and Closed-loop (in-app).
- Semi-closed loop means that the actual check-out leads out of the app onto the merchant's webpage. After the user clicks on ‘Buy now, the page redirects them to a third-party site to complete the final payment.
- Closed-loop check-out means that the payment is conducted in-app, i.e., the user pays without having to leave. The advantage here is that the users don't need to re-enter their information. Thus, the onsite ‘walk-in-and-shop’ experience won't be interrupted. Furthermore, users can save their wishlist in one basket across all merchants by shopping this way.”
What platforms offer social commerce?
Social commerce is now a massive focus for all major social platforms. While shopping features have only been around for a couple of years, the numbers are overwhelmingly pointing in one direction.
One million users now regularly buy from Facebook shops every month, with brands seeing sales hitting order values as high as 66% more than from their websites.
Over Instagram, 44% of people use the service to shop weekly, 62% of people say they become interested in products they see on stories, and 83% of consumers say they use Instagram to discover new products or services.
TikTok is one of the fastest-rising platforms for social commerce, with data from eMarketer finding that people who shop on TikTok browse and buy goods more frequently than those on rival platforms. Hootsuite’s 2022 Social Trends Survey found that 24% of marketers considered TikTok effective for hitting their goals, compared to just 3% in the previous year — a 700% increase.
Elsewhere, Pinterest reported a 20% increase in shopping engagement last year, and China’s largest messaging service, WeChat, generated 2.7tn RMB worth of transactions through its recently introduced Mini-Programs in 2021.
Unsurprisingly, brands increasingly turn to social commerce routes to enhance their selling powers. Amazon Live offers brands the chance to engage with shoppers in real-time via interactive, shoppable live streams, while Wish’s new rebrand also features video and live stream capabilities.
The 3 core platforms for social commerce
Each social commerce platform attracts a distinct audience, with its own habits, preferences, and expectations. As such, there’s no single ‘best social commerce platform.’ Instead, you should see which have the best fit with your brand and target audience.
Even so, there are some social commerce platforms that are way ahead of the competition. Regardless of your ideal customer, these are certainly worth looking at.
Top 3 social commerce platforms
#1 TikTok
TikTok is a top social commerce channel, with 150 million users in the US and 1.8 billion users worldwide. Individual users spend more time on TikTok than any other social platform – and it boasts the highest consumer spending too.
TikTok leverages short-form video content to engage audiences - and these can be used to great effect to highlight and sell products.
TikTok Shop has expanded greatly in recent years, covering all the major global markets. It has a strong user base in younger demographic groups, which is a positive signal for growing sales in the future. Although older age groups are also very active on TikTok, it is primarily younger consumers who spend the most time and money via the channel.
There are numerous buying opportunities integrated into the platform experience: in-app shop tab, shopping from Live videos, shoppable ads, and shoppable videos.
You can also promote products with targeted ads, product showcases, and embedded shopping links in videos themselves.
TikTok Shop can be most effectively managed using ChannelEngine, and fulfillment can be outsourced to ‘Fulfillment by TikTok’ as a 3PL solution as needed.
Learn more about TikTok Shop here.
#2 Instagram Shop (and Facebook)
Instagram is a highly popular social media platform that is widely used across all demographics. It offers a variety of content formats that allow brands to showcase their products in different ways. Available in all major markets, Instagram shopping continues to grow in popularity.
Instagram is part of the Meta group, which includes Facebook. Both Facebook Shops and Instagram shopping use Meta Shops as the ‘backend.’ This means you can use the same Meta Shop to sell on both Instagram and Facebook and manage it all with ChannelEngine.
Instagram is already popular with online retailers, of which 92% use Instagram Shop for social commerce. This popularity is matched by consumers too: 35% of users already make purchases directly on the platform, amounting to 46.8 million consumers.
Lifestyle marketing is very effective on this platform, and it should be part of your marketing strategy regardless of whether you decide to also use it as a sales channel.
Consumers can easily purchase items with Product Tags that are embedded in content. This includes Feed, Reels, and Stories, as well as product mentions in your Feed copy.
Products have their own description pages, and you can create collections too. With Instagram Shopping you have the option to either use Checkout on Instagram for instant sales, or forward customers who click on tagged products to your own online store.
Learn more about Instagram Shop here.
#3 Pinterest
This social commerce channel is a ‘quiet giant’ that is frequently overlooked yet offers a lot of potential. More than 518 million users head to Pinterest each month to find inspiration and plan their next project.
This platform also has a broad appeal across all demographics, but the Gen Z segment is growing especially fast. Gen Z shoppers now make up 42% of the users, while the platform reaches around 30% of the entire population overall in the UK.
Pinterest has a unique niche because users have high levels of intent on the platform. Their activity is very focused on finding new ideas and inspiration for their next purchase. 80% of ‘Pinners’ are inspired to make their next purchase on the platform, and 96% search for items without specifying a brand – meaning they are open to new ideas.
There is a strong focus on lifestyle aspirations, and this is converted into solid sales. Consumers on Pinterest Shopping spend 40% more on this channel than any other, and they are 35% more likely to earn six-figure salaries.
