The social commerce market promotes and sells products and services with the help of social media platforms such as Instagram, Facebook, and Twitter. The social commerce market size in 2021 was $0.62 trillion, and by 2030 it will reach up to $7.03 as predicted, with a CAGR of 30.8% throughout 2021-2030.
Shoppers can use social commerce to discover brands, research products, and buy items without leaving the app. Social commerce provides a more convenient and interactive shopping experience, which increases its popularity.
Difference between social commerce and E-Commerce
Ecommerce and social commerce are not the same things. Ecommerce is a shopping experience on a website or through a branded app. These sites are usually built on eCommerce platforms like Shopify. To access these sites, consumers can use any internet-enabled device, such as a desktop, tablet, or mobile device.
Social commerce is a subgroup of e-commerce that refers to customers making purchases through social media platforms; everything from product research to checkout takes place within the social media platform.
Social commerce-premiumpost platforms
- Instagram: shoppable Instagram makes it simple for customers and brands to connect. Instagram has always provided visuals to engage users, and users have enjoyed scrolling through the Instagram feed. As a result, the app’s retention time is increasing.
- Facebook: Facebook has now taken initiatives for small businesses and created Facebook Shop. With a few simple steps, businesses can set up a social shopping store on Instagram and Facebook. Facebook allows brands to freely customize their store. They can select the product images to display and the theme to match the theme of their brand. These free Facebook shop features enable small businesses to grow by connecting with their target audience anywhere, anytime.
- Taggshop: One of the most popular social commerce platforms that allow a brand to turn their social content to brand sales is tag shop.
- YouTube: Youtube shopping allows brands to create videos and use them as catalogs for customers to explore and buy products while staying on YouTube.
- Pinterest: Pinterest has introduced Pinterest buyable pins, which allow users to purchase products from Pinterest posts created by brands. Like Instagram, Pinterest emphasizes visuals. However, the way they present their shoppable post differs.
- Meesho: Meesho is a reselling app that has empowered many individuals. It enables people to gain recognition as entrepreneurs without needing resources. One can interact with buyers and share products through the Meesho app and a social media account.
Benefits of social commerce:
- Improved customer engagement
Social media platforms enable two-way communication between the company and its customers. It not only helps in promoting the products but also allows the audience to connect with them. Users read these channels’ reviews, comments, and opinions from previous customers. This increases the company’s authenticity and allows them to make an informed decision.
- Consistent audience growth
The main goal of social commerce is to develop a consistent audience. Companies create new social channels and acquire new customers through these channels. Maintaining the same level of relationship with every user who interacts with the company is critical. Encourage shoppers to resonate with the brand and recommend products using the right methods to connect with them.
- Higher search engine ranking
It has already been established that social media increases traffic to the website and direct transactions. Better engagement allows businesses to deliver relevant content based on the users’ interests, motivating them to make repeat purchases. This also helps create link building, recommendations, feedback and comments, and so on. Such organic actions increase the digital footprint, thereby increasing search engine ranking.
- Improved customer insights
Social commerce makes it easier to measure and evaluate business insights. Businesses can measure all of these channels on a regular basis because they all come with ready metrics for impressions, engagement, and reach. It assists in properly grouping audiences and thus sharing the appropriate content with them.
Factors accelerating the overall market
- The number of people using social media has dramatically increased. In 2016, there were 2.3 billion active users on at least one social media platform, which is expected to nearly double to 4.55 billion by 2022. In 2022, Facebook, which Meta owns, dominated the market with nearly 2.5 billion active monthly users. Instagram, also owned by Meta, has 1.3 billion accounts with monthly active users. TikTok has over 1.2 billion active users monthly. In 2022, Twitter will have over 229 million users. As the number of people who use various social media platforms grows, so will the number of businesses that use these platforms for marketing their products and services.
- Social media platforms such as Instagram, Facebook, Twitter, and WhatsApp have enabled small and medium-sized businesses to market their products and services at a lower cost than traditional marketing methods. Furthermore, social media has a much larger audience reach than traditional analog media platforms. According to World Bank statistics, SMEs generate seven out of ten jobs, accounting for roughly 90% of global businesses. SMEs contribute roughly 40% of the national GDP in emerging economies. There is an increase in the use of social media for commercial and transactional activities among SMEs, which are critical for the functioning of economies and whose numbers are increasing on a regular basis.
- Social media platforms have altered consumer purchasing habits compared to offline purchasing patterns. Most consumers prefer and have shifted to online shopping from offline shopping. According to one study, nearly half of all internet users in APAC have purchased at least one product through a social media platform. In the United States, 36% of all internet users will make at least one purchase through a social media platform.
Key companies and market insight
To remain sustainable in a competitive market, companies employ organic and organic growth methods such as product/solution introduction and development, mergers and acquisitions, geographical expansion, and partnerships. Pinterest, for example, partnered with Shopify, Inc., an e-commerce solution provider, in April 2021 to expand its social commerce presence internationally. The collaboration allows the former to offer a Pinterest platform in 27 countries, including the United Kingdom, Austria, Italy, Australia, France, Brazil, Germany, Spain, and Switzerland.
Prominent plays operating in the global social commerce market include Etsy, Inc., Roposo, Pinterest, Twitter, Inc., Meta Platforms, Inc., Fashner technologies private limited, and others.
Conclusion
Increased time spent on social media platforms during a pandemic and the ease of purchasing products online have aided market growth. The pandemic has emphasized the importance of staying connected and has compelled us to adapt and connect in novel ways. Social commerce eliminates unnecessary steps and streamlines the purchasing process by allowing customers to check out through social media platforms. Furthermore, the number of potential buyers from various social media is expected to support market growth.
