The rise of social commerce is one of the hottest trends in the e-commerce sector. In 2021, $37 billion was spent on items bought on social media channels, and this number is expected to rise to $80 billion by 2025.
Customers increasingly intend to explore products and purchase directly from their social apps to enjoy a more dynamic customer journey. The trend has shifted how brands interact with their consumers, with leading companies allying with major social platforms to create highly engaging content that is more about authenticity and less about blatant self-promotion.
Live Stream Shopping
Social e-commerce made significant strides in online shopping by partnering with celebrities and influencers and offering live-stream shopping experiences. Companies that did so in China achieved conversion rates of almost 30 percent, which is approximately ten times higher than rates achieved by traditional e-commerce avenues. In 2021, Douyin, China’s version of TikTok, made a significant number of fashion sales (almost 50 percent of what was sold on e-commerce giant, Tmall), with many deals being made via live auctions (a super-fun activity for buyers in the digital age).
Keeping Up with Demand
The enormous demand posed by social e-commerce has a ripple effect on manufacturing processes, with many companies updating their online order fulfillment capabilities by necessity. Companies currently focus on a few areas: warehouse automation, planning for peak periods, online order fulfillment, and order selection. Companies with online and physical branches are honing in on order fulfillment via innovative hybrid solutions. The latter include in-house fulfillment, drop-shipping, and third-party logistics used simultaneously to deliver orders quickly.
New Opportunities for Influencers
Social e-commerce is helping influencers make undreamed sales. A case in point is beauty influencer, Nirsrin, who has an impressive TikTok following of over 504K. She sold over $12,000 of beauty products in one live video session, citing her authenticity as the reason for her success. She told TikTok that the items she recommended were firm favorites. Because her followers trusted her, they began purchasing the items while watching her fun-filled Livestream session.
A Worldwide Phenomenon
Although the social e-commerce phenomenon began in China (on the Douyin platform), savvy companies in the US and beyond have hopped in the trend. TikTok introduced the concept in the US upon discovering that its Chinese version facilitated the sale of $119 worth of goods in 2021. Amazon has followed suit with its platform, Inspire, and even the video service, OnlyFans, which enables creators to sell personalized items to their subscribers.
Welcome to the era of social commerce. The industry is expected to reach impressive sales over the next few years. The phenomenon signifies buyers’ wish to enjoy more active, lively, dynamic shopping experiences. It also reflects the continued power of social media influencers, who are valued for their authenticity and personalized choice of products sold online.