Consider these facts:
- Almost 25% of global commercial transactions take place over the internet.
- Close to 70% of the world’s population uses some kind of social media.
E-Commerce and social media are used by billions of people, and these platforms are growing exponentially each year. However, outside of Asia, few have experienced the successful combination of the two. Social commerce, e-commerce powered by social media, uses recommendations, social interaction, user ratings and shared pick lists to drive sales.
To understand why Asian markets are adopting this powerful new hybrid trend, and Western markets have yet to, it’s important to make distinctions between how these two models are used.
Understanding Social Ecommerce
Social commerce is driven through social media platforms. However, it is more than merely marketing on social media. The seller may integrate with the social media platform, but the influence takes place in the social environment. Unlike e-commerce, buyers learn from the experience and opinions of others on the social platform.
When we compare popular, Western-based social media platforms like Facebook to those in Asia, like WeChat and KakaoTalk, we see that the latter have sophisticated ecom features and an advanced digital experience. For example, WeChat is a mobile app with 1 billion monthly users that integrates many possibilities like messaging, requesting taxis or booking doctor appointments. It also offers a transactional capability for a fully integrated ecom experience.
For Facebook, it is only now that it is integrating Facebook Pay in the U.S. market, with plans to expand it across its other platforms including WhatsApp and Instagram. Certainly, Facebook Pay is bringing these apps into the transactional realm, but they are just at the beginning of creating top in-app shopping experiences.
Beyond cool features and tech, we need to go back to the different contexts in which people purchase on mobile. Conceiving these experiences and content around that mobile context and social experience, will be important to differentiate ourselves out there.
Most algorithms on social platforms are favouring/pushing groups, and as people become more digitally savvy, they are more sensitive to privacy issues and more demanding of what they want to see. In fact, 51 percent of social shoppers say they have used an ad-blocker. To successfully implement social media ecom strategies, it will be important to think beyond tech and understand what the aspirations and motivations are for customers, so that companies provide real value.
What the Future of Social Ecommerce Could Bring
If Western social platforms want to stop playing catch up with platforms like KakaoTalk and WeChat, big players like Facebook need to start collaborating even more with brands to develop features and experiences that social audiences are ready for but that their audiences haven’t seen before. More partnerships between companies and social apps are needed to explore possibilities at a bigger scale.
And because of the desire to truly connect, and the push for groups by interest, we should watch out for niche social apps that have become important and gained fame like TikTok which counts 500 million monthly active users.
The movement of Social Ecommerce is only just beginning. As Western platforms look to the East and see what those platforms are capable of accomplishing, it’s only a matter of time before all social media figures out a way to work ecommerce strategies into their innerworkings. And when they do so, they’re likely to find that audiences are even more ready for the change than they anticipated.