How Social Commerce is Driving Change in eCommerce

Social media has dramatically changed the way we live our lives. However, one area that’s largely remained untouched is ecommerce. Despite newer concepts like Facebook Marketplace, social networks have made little impact on the world of online buying and selling. Most people looking to make a purchase online begin their journey on Amazon or search engines, with only 8% starting from a social network.

However, behind the scenes an ecommerce revolution is occurring. The COVID-19 pandemic has accelerated the growth of ecommerce by as much as five years, according to IBM research, and social commerce - buying and selling directly through social networks - is becoming a major part of it.

Social media has already got involved with this trend, with one example being Instagram recently launching a new “Shops” platform enabling businesses to sell directly from the social network. So what does the future hold for this area of ecommerce, and how is it set to change the market as a whole?

The rise of social commerce

Social commerce has been around in some form for a while now, but it’s really kicked off as a dominant force in China. It’s estimated that 11.6% of all Chinese retail ecommerce sales came from social media in 2020, and by 2023 this could grow to 14.2%; a total value of around $67.4 billion.

This is important for the rest of the world because China is so often ahead of the curve when it comes to ecommerce. It’s also estimated that in 2021, China will be responsible for over $1.1 trillion of the ecommerce market; more than 45% of the global total. In comparison, the US accounts for just under 18%.

However, America is catching up. According to insights from eMarketer, the US social commerce market is expected to grow by 34.8% in 2021 to a value of over $36 billion. This is only a little under China’s projected growth of 35.5%, although the total value of Chinese social commerce is roughly ten times that of the US.

Meanwhile in the UK, social commerce has grown to the point that around a third of British consumers have made a purchase on social media. This could be because data suggests UK customers are more likely to look for user-generated content before a purchase, something that social media provides.

The adoption of social commerce by ecommerce businesses isn’t going away any time soon. It’s estimated that the global market for this form of selling through social media was $89.4 billion in 2020. While this might seem impressive, it’s nothing compared to the future; the same estimates predict the market will increase at a compound annual growth rate of 31.4%, up to $604.5 billion in 2027.

Should you adopt social commerce?

With all this in mind, is social commerce a good fit for your business? While there are some companies that undoubtedly won’t benefit from this method of selling, it’s something that every ecommerce firm should be considering. Without a concrete social commerce strategy, you run the risk of falling behind your competitors in the long run.

First of all, consider the size of your potential audience on social media. Facebook alone has almost 2.8 billion monthly active users around the world, while Instagram has recently passed its one billionth user. These customers can be reached through social media, but enabling them to purchase through it removes a barrier and makes it easier for them to spend money with you.

Those users are already looking to make a purchase, with 70% of shoppers using Instagram to find new products and 459 million people a month using Pinterest to get inspired and discover items to buy. By implementing social commerce, you’re providing them with what they’ve been looking for in the form of convenience.

Social media already provides you with plenty of advantages when it comes to selling. Social forums are already where people go to share opinions and reviews of products and services, so positive word of mouth can spread like wildfire, and social media is also where your main influencers are almost certainly located. With all that in mind, social commerce becomes a smart strategy for most ecommerce businesses heading into the future.