The Social Commerce Catch-Up

January 30, 2023

By Kevin Kovanich, Vice President, Director of Digital

From Regional Trend to Global Phenomenon

In many places across the world, shopping on social media is nothing new. In fact, it’s becoming more of the norm. Douyin (TikTok in China) is a major driver of this. While it shares many similarities to its TikTok sibling, users in China are much more likely to shop directly from the app. Much of this traffic comes from livestreams, which are watched by over 63% of Chinese internet users. And they’re not just watching. Reports suggest that in 2022, social livestreaming in China drove more than $400 billion in sales.

What to Expect

Uptake is slower in the United States, but social shopping revenue isn’t inconsequential. According to an Instagram study, nearly half of people use the app to shop weekly. And for U.S. consumers who aren’t yet comfortable completing transactions entirely in a social media app, these platforms are still influencing purchase decisions. In a study conducted by Fairing, consumers were asked to identify the channel where they first heard of a product after purchasing it online. It was discovered that nearly 15 percent of all product discoveries begin on TikTok. The previous year, that number was just 4 percent. So, even when users don’t click to buy directly from a social platform, social platforms and content are highly influential in terms of how they spend their dollars.

How Brands Can Win

  • Embrace available social selling features.While it’s not yet a user behavior fully adopted by consumers in North America or EMEA, social channels do currently support the ability to make purchases without leaving the app. For example, with TikTok Shop brands can sell products with in-feed video, a product tab directly on their profile, or with shoppable livestreams. Twitter, Facebook and Instagram have similar capabilities as well. These types of user behaviors don’t change overnight, so the more consumers spot these features in their day-to-day browsing, the more comfortable they will become, and usage will rise.
  • Make content to drive excitement. Even if they’re not clicking to buy, seeing your products and services frequently in social feeds influences off-platform purchase decisions. Particularly for younger consumers like Gen Z, the traditional customer journey is short circuited with users becoming aware of a product through a captivating social post and making a quick decision to purchase it elsewhere online. Through paid advertising, organic content, livestreams or influencer partnerships, getting your goods in front of people frequently can spark online sales. And if you’re not selling in-platform, don’t forget to explicitly share where a product can be purchased in your content. Most users are savvy enough to take it from there.

Why It Matters

While the playbook on how to drive social purchase is still being written, social media behaviors will continue to shift toward e-commerce. Just as online shopping took a while to replace brick-and-mortar transactions, social media purchasing will take time to catch on, too. Brands who test and learn this year will be more prepared as the U.S. catches up to other countries when it comes to shopping on social media.

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