Big players are eyeing the social commerce sector to further drive their growth
The social commerce sector has emerged as one of the primary growth drivers for the e-commerce industry globally. While live streaming shopping and purchases through messaging platforms have been mainstream in China for several years, the trend of shopping through social media platforms has grown significantly around the world over the last two years. During the global pandemic period, an increasing number of existing and new shoppers turned to social commerce platforms to complete their purchases online. Globally, the social commerce sector is projected to record significant growth over the next three to four years. Consequently, big players across the world are eyeing the social commerce sector to further drive their growth. For instance,
- Amazon, one of the leading e-commerce firms around the world, is amplifying its presence in the social commerce space. Notably, the firm is boosting its presence in the social commerce space in China, where the sector is dominated by homegrown players such as Pinduoduo. To gain more traction from Gen Z shoppers, Amazon has launched a group-buying function in partnership with WeChat. Through the WeChat mini program, Amazon is looking to compete with players such as Douyin, Pinduoduo, and Xiaohongshu in China.
- Along with China, Amazon is also seeking to make a push in the Indian social commerce segment, where the industry has recorded strong growth amid rising number of online shoppers. In April 2022, Amazon acquired GlowRoad, a social commerce startup that focuses on female customers. While the terms of the deal were not disclosed by Amazon, the acquisition comes at the time when its rival, Flipkart, is achieving massive growth in the social commerce space in India. Notably, Flipkart has onboarded more than 100 million users onto its social commerce platform Shopsy, much ahead of its initial target of December 2022.
- Shopify, another e-commerce giant, has turned to social commerce as it continues to grapple with a slowdown in e-commerce growth. Notably, in June 2022, the firm announced a strategic collaboration with Twitter, thereby allowing its merchants to add product catalogs to their profiles on the social platform. Furthermore, Shopify also teamed with YouTube in July 2022, allowing merchants to convert their channels into digital storefronts.
- In China, Alibaba, one of the leading e-commerce platforms, announced the launch of new a social commerce platform Taibang in April 2022. The social commerce platform aimed at reaching young generation consumers, especially Gen Z, enables shoppers to find and purchase niche labels. Furthermore, users can connect with brand managers and create a community.
- The launch of the social commerce app is part of the firm’s strategy to make a push into the segment which is growing rapidly in China. Notably, in March 2022, Kuaishou, a video-sharing social commerce platform, announced the termination of its partnership with Alibaba. In 2021, players such as Douyin and Xiaohongshu also terminated their partnership with Alibaba to create independent firms in the space. As these players have shifted and turned into direct competitors, the push from Alibaba in the social commerce space is no surprise.
These new product launches, strategic collaborations, and acquisition deals in the social commerce space from e-commerce behemoths indicate the growth potential of the sector. As a result of this, major retailers are also seen amplifying their presence in the social commerce space to drive their growth. For instance,
- In September 2022, Walmart Connect announced an Innovation Partner Program as part of its strategy to boost the social commerce sector. Notably, the Innovation Partner Program enables advertisers to access channels such as live streaming, entertainment, t-commerce, and social feeds. The innovation partners in the program include Firework, Snap, Roku, TikTok, and TalkShopLive. The new offering will allow touchpoints and channels to reach wherever customers are through the new ad format.
Over the next three to four years, PayNXT360 expects a lot more innovation, strategic collaborations, and mergers and acquisition deal in the space globally. With social commerce shopping expected to become more mainstream around the world, these players are projected to make further inroads in the sector from the short to medium-term perspective. This will lead to more investment in the space, driving innovation and growth of the industry in the long run.
To know more and gain a deeper understanding of the global social commerce market, click here.