Deep dive: What social commerce looks like around the world

h China outsells the US by a factor of 10. As far back as May 2020, an Ipsos study indicated that two-thirds of Americans were buying directly on, or discovering products through, social media. Apparel, beauty, health and wellness were the biggest beneficiaries at that time. Hootsuite contends that 81 per cent of shoppers research products on Instagram and Facebook, and that shopping is a top priority for 48 per cent of Pinterest users. TikTok’s #TikTokMadeMeBuyIt hashtag has been used more than 7 billion times, by users posting what they have bought based on product recommendations on the site. In Australia, Ipsos pegs the proportion of shoppers who have used social commerce at least once in the past six months at 29 per cent (against 39 per cent globally). All of which is to underscore that social commerce is big, and growing exponentially.  Why? Because social media is where many consumers spend their time, and where they look for inspiration and discovery. And although a digital interface, the human elements in it are strong, such as connections to friends and family’s feeds and recommendations. More than just ‘buy now’ buttons Social commerce covers end-to-end shopping journeys, from discovery, research and evaluation to checkout, all on the social media app. In many instances, these ‘journeys’ are very short, one-click discover-and-buy. TikTok reports that two-thirds of its users were inspired to shop even when they weren’t actually planning to do so. Social apps with built-in social commerce include Facebook, Instagram, Pinterest, TikTok, and WeChat. There are a number of ways shoppers can buy on social media. Beyond just ‘buy now’ buttons, these include customisable Facebook and Instagram shops, peer-to-peer marketplaces, curated shopping lists such as on Pinterest, livestreamed events, and shoppable AR filters such as shoppable lenses on Snapchat.  Some platforms have shopping tabs where consumers can browse, save, and buy products – in effect creating their own catalogues and shopping lists. Obviously advertisements include ‘shop now’ buttons, and shopping tags allow brands and retailers to tag products in their stories and posts. TikTok’s Hashtag Challenge Plus enables users to shop for products associated with a sponsored hashtag. Meta recently introduced a feature allowing for shopping through DMs. As far back as 2020, viewers of KitKat Chocolatory Australia’s first livestream experience could type prescribed keywords into the comment box, triggering a Messenger notification with a link to purchase the product online.   On TikTok Shop, consumers can buy from in-feed videos, livestreams and a product showcase. TikTok Shop is currently available in the UK and a number of Southeast Asian markets. Also in Southeast Asia, WhatsApp is increasingly being used as a selling platform by individuals with peer-to-peer sales as side hustles. Twitter Shops enables merchants to showcase up to 50 products on their Twitter profile. Walmart was one of the first brands to take advantage of this. (Note: at time of writing, Twitter was both on the nose in the court of public opinion and in a state of flux organisationally, so it remains to be seen if the Twitter Shops functionality will be retained or developed further).  On WeChat, shoppers can see product ratings and obtain real-time advice from their friends. In Singapore, people living in the same apartment building have created community Facebook accounts to perform group buys, discovering products that others in their building are buying. ‘Word of mouth’ has moved from being influential to being commercialised. Benefits far outweigh the drawbacks Social commerce has a number of benefits for organisations. These include: Allows for, and even expressly creates, impulse purchases online, by driving discovery and purchase intent. This is something of a holy grail, particularly in FMCG. Reduced risk of abandoned carts, as entire journeys, most of which are quick, take place within the app. Brand engagement beyond the transaction; FMCG brands should identify what products have higher engagement. By actively refreshing their stores, launching new variants, removing non-performers, and offering time-bound deals, brands can make the most of this new platform. Visibility of your current and potential customers, and the ability to chat with them directly. The ability to target specific products to niche audiences and then measure the impact quickly and easily. This enables tailoring of messaging and content specifically for certain audiences. Social commerce is going to be a natural fit for certain categories that have higher involvement, such as petcare, beauty, and confectionery. However, due to social commerce’s targeting capabilities, even typically lower engagement categories (for instance, paper foils and wraps) can find their people A means to obtain instant feedback on products, both current and those in development. And for consumers: Discovery of new products and services An experience that is more interactive and human than traditional e-commerce, as consumers can consult with friends, watch a livestream etc The all-in-one-app experiences reduce consumer friction through reduced touchpoints Consumers can use social apps as real-time curated catalogues, including seeing product demonstrations and reviews, in a way that physical world catalogues cannot deliver. The downsides are few and often offset by innovation. Challenges requiring consideration include: Fewer touchpoints to engage with consumers once they are in-app, although this has been mitigated somewhat by the numerous ways platforms are offering for brands to engage consumers Increased competition and reduced control: everyone is now a content creator, and possibly a retailer if they’ve got a selling side hustle. Brands in some ways have more control and in some ways less Complexity of fulfilment options, whether via marketplaces, retailers or DTC. If going DTC, there is complexity of fulfilment capability as well. (But then, if your brand is doing DTC via your branded website, this process is already in place). Consumers are ahead of brands Social commerce is maturing. It is moving beyond a handful of large retailers and brands mass marketing to millions, and on to peer-to-peer selling. The platforms are facilitating this by providing more points of engagement and means to sell. Facebook, for instance, plans to bring its shops to WhatsApp and Facebook Marketplace, and visual search to Instagram. Livestream commerce, a key component of social commerce, is fast becoming a core channel in its own right. Yet a Forrester study indicated that even among social commerce leaders, fewer than 30 per cent were prioritising customer engagement in social commerce. This means most are failing to cultivate and nurture relationships throughout their customers’ purchase journeys on socials. In their adoption of social commerce, their behaviours and their willingness to discover and buy instantly, the shoppers are ahead of many brands and retailers. Brands and retailers will have ever more tools to sell directly on social media and provide increasingly seamless customer engagement and conversion experiences. By doing so, they can make themselves default go-tos in consumers’ personal commerce ecosystems. Now is the time to ride the social commerce wave.