How social commerce works, and why your business should care
8 minute read
The world has gone digital.
While this statement in itself isn’t particularly groundbreaking, it is worthy to note the aspects of which technology has integrated into our lives. As going digital becomes the preferred norm to function, there is one aspect that seems to be turning heads: how we shop.
eCommerce has accelerated in recent years as global sales are expected to soar over 6.3 billion USD by 2024. Asia is no exception to this, with Southeast Asia, in particular, becoming one of the fastest-growing digital economies in the world.
However, while much of the focus still very much centers on the growing eCommerce market, a new subset seems to be emerging within the digital hemisphere: social commerce.
This poses the question: is social commerce the next step for your eCommerce business? We explain what social commerce is, the trends that social commerce brings, and 4 ways small business owners can integrate social commerce into their business strategy.
Let’s take a deeper look and find out.
What is social commerce and how does it differ from eCommerce?
Think of social commerce as an extension to the eCommerce chain. While eCommerce refers to the buying and selling of goods on the internet, social commerce is the process of doing so directly through social media.
While this may sound minute, trust us when we say that this can make a world of difference in how you reach your audience, market to them, and of course, (potentially) increase your sales.
Does this make one form better than the other? Not necessarily so. In fact, let’s take a look at both eCommerce and social commerce and how they match up in a comparison table below.
|Efficiency of transactions|
|Searchability of product|
As you can tell, each comes with its own pros and cons.
Why is social commerce growing?
Social commerce is growing at an immense rate. The global market for social commerce reached US$89.4 billion in 2020 and is projected to grow to up to US$604.5 billion by 2027.
But why is this so?
It’s all about the shopping experience which, in itself, is a social activity regardless of the medium. Think of how we likely seek the opinion of others when purchasing a product. This element is ramped up in social commerce that makes the experience significantly more interactive.
Consumers can now easily consult others on purchases, tag businesses in their latest haul, and interact directly with brands. Think about all the rising trends of TikTok or Instagram haul videos.
Social commerce has come to encompass a wide array of options from group buying, social shopping to mobile apps and added social features that all are seamlessly integrated into the consumer experience.
It thus comes as no surprise that social commerce is an emerging market within the business landscape.
Will social commerce rule eCommerce?
With such impressive statistics, it only seems natural to assume that social commerce is the next big step in eCommerce evolution. You would be both right and wrong to assume that.
The truth is that social commerce is not a novel term. In fact, social commerce has existed from as early as 2007, tracing back to coincide with the rise of Facebook. Despite this, social commerce is very much still in its stages of infancy and battles with its own limitations.
For starters, social commerce is primarily restricted to larger social media platforms that have only recently started fully incorporating it. For example, Instagram had only added a checkout function for US businesses in 2020 while WhatsApp Business’s catalog feature is only available in limited regions.
Social commerce may also not guarantee the increase in sales you intended, with some studies suggesting that only 19% of frequent online consumers actually purchase directly via social media.
Having said that, social commerce is an undeniable emerging market force with immense potential to grow. It is constantly undergoing new tests and developments to enhance the customer experience – and with each test, social commerce becomes potentially closer to becoming a new market powerhouse.
Should you make a switch?
It would be unwise to completely switch your entire business strategy based on what’s upcoming in the business market.
However, instead of viewing both eCommerce and social commerce as competitive forces against each other, perhaps it would be more useful to think of them as complementary strategies to each other. Engaging in the likes of one does not necessarily invalidate the other.
As such, to be truly successful, one must embrace these new innovations and hybrid strategies to gain the full benefits of online shopping.
4 ways to integrate social commerce into your business strategy
Here are some actionables for you to integrate social commerce into your business today.
- Select the right social media channel. From Facebook, Instagram to Twitter, each channel contains a unique audience for you to target. Identify which matches your business objectives and needs. Consider Facebook Shops, a mobile-first shopping experience where brands are able to sell their product and connect with customers through WhatsApp, Messenger, or Instagram Direct to answer questions, offer support, and more.
- Focus on the customer experience. Offering a great customer service experience is a cost-efficient and effective method to creating loyal followers and attracting new consumers. Positive experiences garner positive reviews that ultimately, boost sales.
- Provide a seamless checkout. Reduce as much friction during the checkout process as you can. Consumers want to reach the end goal (i.e. buying your product) as quickly as they can.
- Data is your friend. Social media analytics will provide you with the useful insights you need to know to determine if your business strategy is working. Such metrics are also crucial in understanding the customer’s experience.
It is hard to deny the benefits that eCommerce can have for your business. In a time where many operations are already online, the importance of eCommerce becomes even more pertinent than ever.
Staying on top of trends and evolving your business model can be an important step to ensuring your business adapts to the changing times. Seeking to pivot your business to eCommerce? Check out our comprehensive guide on starting your own eCommerce business here! We outline the essential steps to kickstart your eCommerce journey.
Looking to start your very own social commerce business or seeking to digitize your current business operations? At Sleek, we aim to make your company incorporation, corporate secretary, and accounting as easy as 1-2-3, with our all-in-one platform.
Have any questions or require more guidance on how to start a business or more? Talk to our friendly Sleek team to get started with a free consultation today!