Social Commerce Intelligence

With the shift in consumer shopping behavior and changing marketing strategies, social media channels have emerged as a leading growth driver for retailers globally. Social shopping, while extremely popular in China, the trend is also gaining steady momentum in many other nations around the world. More brands are working with platforms such as TikTok to build new customer relationships and drive incremental revenue through fun and engaging content.

The global pandemic outbreak has significantly changed consumer shopping behavior in the Asia Pacific region. The rising adoption of digital services, including payments and shopping, has accelerated the growth of social commerce. Retailers, in increasing numbers, are leveraging the outbreak of social channels to forge new relationships with consumers and drive incremental revenue.

Inspired by Pinduoduo in China and Meesho in India, many social commerce startups are leveraging community and group-buying dynamics to build their presence in the segment. This has further driven the competitive landscape of the social commerce market in the Asia Pacific. With the industry expected to record strong growth over the next three to four years, PayNXT360 expects an increasing venture capital and private equity funding to flow in the regional market.

In Europe, consumer appetite has been growing for social shopping and buying. The growing e-commerce penetration in the region has supported the rise of shopping through social media platforms, including Facebook, Instagram, and others. Furthermore, the investment from these players into boosting their social commerce capabilities has also supported the rise of the market.

Faster checkout processes, product exclusivity, and increasing advertisement from brands and retailers on social media platforms are driving more and more consumers toward social shopping in Europe. The trend is especially higher among young generation consumers. Over the next three to four years, PayNXT360 expects the European social commerce industry to record steady growth, amid the growing interest from consumers and brands.

In the Middle East, the affinity with social media applications is driving an upsurge in social commerce. These platforms have made it easier for brands to interact with their consumers and drive their sales leveraging the massive outreach among consumers across the region. The trend is projected to further continue from the short to medium-term perspective, and as a result, more and more global players are expected to enter high growth markets, especially the United Arab Emirates.

In Brazil, the rising disposable income along with the wider use of smartphones has resulted in an upsurge in social commerce. The affinity to shop from social channels has resulted in more global firms expanding their presence in Brazil. The presence of global players, including Meta and TikTok, will further drive investment and a competitive landscape in the Brazilian social commerce sector.

In the United States, the social commerce sector is poised to record strong amid the growing investment from social media platforms and retailers. Over the last few years, leading social media platforms have launched a plethora of social commerce capabilities onto their platform and the trend is projected to further continue in 2023.

Furthermore, a growing number of marketplace sellers are seeking to reduce their reliance on major e-commerce platforms, as they wish to diversify their sales avenues in the United States. While this can have a seismic impact on the growth of the B2C e-commerce sector, the trend is having a positive growth impact on the social commerce industry.