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The rise of social commerce: What is it and will it disrupt e-commerce’s long-lasting reign?

It is not uncommon to see the option to buy a product off Instagram whilst scrolling through your feed. More and more brands have been using this feature to promote their products in the past year, representing a rise in social commerce.

Social commerce refers to the use of a social network community to drive e-commerce sales, and social network giants like Facebook and Instagram now have marketplaces for users to purchase items straight off their sites.

Unlike social media marketing, it allows consumers to purchase products and services from a brand directly, within the social media platform. 

It differs from e-commerce, which refers to a shopping experience via a website or dedicated branded app. 

With social commerce, the entire online shopping experience can happen without the consumer having to leave the social media site they’re on. 

In essence, this can mean less interruption for the customer, allowing them to transact nearly instantly, with fewer clicks. On the other hand, it allows brands to push their products to customers in a more straightforward manner.

Even though social commerce is a game changer for smaller brands and allows them to compete in a crowded marketplace, large retailers are also hopping onto the bandwagon.

Golden Moments, SecretlLab and Love, Bonito on Facebook Shops

Popular local brands such as Golden Moments, Secretlab, and Love, Bonito, all have a presence on Facebook Shops where they feature their merchandise and product collections.

Facebook Shops was launched last year, and is a “mobile-first shopping experience where businesses can easily create an online store on Facebook and Instagram for free.” 

It also allows merchants to connect with customers through WhatsApp, Messenger or Instagram Direct to answer questions, offer support and more.

The e-commerce boom

Shopee E-Commerce
Image Credit: Vulcan Post

For the past few years, e-commerce has been steadily growing in popularity.

Due to the Covid-19 pandemic, the volume of transactions on e-commerce sites has further risen drastically. Singaporeans have been increasingly using e-commerce sites to buy products from food to clothing to groceries.

The pandemic has also revealed the opportunities of Singapore’s e-commerce sector. Most retailers have realised that going digital is one of the best ways to reach their customer base, and have developed an e-commerce strategy.

According to Statista, revenue in the e-commerce market is projected to reach US$2,793 million (S$3762.67 million) in 2021.

With a general downward trend in retail sales, e-commerce seems to be the solution to boost the retail industry. However, will the rise in social commerce disrupt the long-lasting reign of traditional commerce sites?

Is social always better?

Social Commerce instagram
Image Credit: MENABytes

There are definitely some instances where the social commerce experience triumphs that of e-commerce, both for consumers and businesses.

First, social media makes the shopping experience much more interactive than a typical e-commerce spree. Consumers can easily comment and review items bought by their followers, or speak with merchants directly.

This is also good for businesses. According to research by Facebook, 81 per cent of shoppers research products on Instagram and Facebook, and putting products on these sites drastically increases a business’ reach.

Social commerce also acts as a real-time platform for businesses to get feedback on their products, as their products are put in a position where customers can review and discuss about it instantly.

The customer data available on social media gives brands a clear idea on who their target audiences are. This gives them a better opportunity to tweak their ads to better target the right consumers, thus driving sales.

Furthermore, social commerce removes the friction from the consumer journey from product discovery to purchase. On the consumer end, less research is needed and the need to toggle back and forth from social media to the e-commerce website is eliminated.

Social commerce will not replace e-commerce yet

Before the rise of social commerce, consumers followed brands on social media for inspiration, or perhaps to know when a sale would be launched. Things have since changed, and now people can save the products they wish to buy on social media, or even buy it right away.

However, it is unlikely that social commerce will take the place of e-commerce anytime soon. Even though social media penetration in Singapore is around 75 per cent, statistics for social commerce penetration is not widely available yet.

This shows that the industry is still in its nascent stages — especially since the Facebook Shops feature was only launched last year.

Furthermore, despite the lowered levels of friction when shopping on social media sites, many still do not associate Facebook and Instagram with platforms to shop on. Keeping themselves in the know of the latest news and updates from their friends still remain as the key function of social media.

That being said, the potential for social commerce to become more popular in Singapore is high. Brands are likely to improve on the experience and products available on their social commerce platforms due to the benefits it brings them.

This will translate to a better shopping experience for customers, and a snowball effect might occur, leading to a greater usage of social commerce to shop.

Featured Image Credit: Consultus Digital


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