The race to lead the social commerce sector intensifies in the United States

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The social commerce sector in the United States has been on a consistent rise over the last few years. The growth was accelerated significantly during the global pandemic outbreak when more people turned to online channels and social media platforms to complete their purchases. This trend is expected to further continue, with social commerce penetration increasing to over 5% in 2022. 

While Facebook and Instagram will continue to dominate the social commerce market, the race to lead the sector is intensifying in the United States. Notably, retailers and other social media platforms are also launching new features to gain market share in the growing social commerce industry. For instance, 

• In October 2022, Walmart, which has been significantly investing in the social commerce space over the last few years, announced that the firm has launched the beta version of its creator platform. Notably, the platform will allow creators to share Walmart product links on a social media platform and receive a commission when their followers make a purchase. 

The launch of the creator platform is part of the firm’s strategy to get a bigger share of the growing social commerce market in the United States. Notably, in February 2022, the firm also entered the live streaming space through a strategic collaboration with Talkshoplive. Over the next few quarters, the firm is planning to rapidly evolve its creator platform by building features and experiences that can help creators to create and publish content. Notably, the full roll out of the platform is expected in 2023. 

Along with Walmart, many of the social commerce platforms are launching new features to drive growth in the sector over the next few years. For instance, 

• In October 2022, Snapchat announced a partnership with Disguise, thereby allowing users to try Halloween costumes using the AR shopping tool, which has been developed by Snapchat. Notably, AR shopping lenses have been used by over 250 million users for a total of 5 billion times since January 2021. Snapchat has also partnered with Gucci and American Eagle to let users try products using AR technology. 

Google is among the other players that have recently launched new social commerce features. In September 2022, the firm expanded its shopping capabilities with the release of a 3D sneaker tool as well as personalized features, including outfit curator. While many players are making moves in the United States social commerce market to gain market share, TikTok is looking to compete with the leaders in the e-commerce space and become the top shopping destination for social buyers in the country. For instance, 

• TikTok, one of the leading global players in the social commerce industry, is planning to have its own fulfillment centers in the United States. The firm has gained significant momentum in social commerce through its initiatives, including the launch of commerce tools, TikTok Shopping, in 2021. 
• With social commerce penetration growing, TikTok is expected to further experience an increase in its social buyer numbers in 2022. With the trend expected to continue from the short to medium-term perspective, TikTok is projected to become one of the leading players in the segment over the next three to four years. 

Through its fulfillment centers, the firm is planning to further strengthen its position in the market over the next three to four years. Notably, the fulfillment centers will allow TikTok to remove barriers that might be standing in the way of retailers to sell on the platform. The bet on logistics and its selling features such as Shopify-connected storefronts will put TikTok in direct competition with Amazon in the United States market. 

While controlling its own faith and unlocking a new revenue stream seems lucrative, the bet on logistics is both risky as well as expensive. The challenging endeavor, to lead the United States social commerce market, means that competition in the space is expected to further intensify over the next three to four years, as both domestic and global players continue to invest billions of dollars into the segment to become market leaders. 

To know more and gain a deeper understanding of the United States social commerce market, click here.