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What is Social Commerce: Details and Data

· September 18, 2018

Where do you look to purchase new clothes, art, a product or device, or a fun or useful application? In the past, consumers may have answered this question by citing a favorite brand or trustworthy retailer, private recommendations from friends and family, or their own research. Today that answer may be changing. Many asked now often purchase the products advertised by businesses, brands, friends, or popular individuals (often labeled “social influencers”) they follow on social media.

This is “social commerce,” a subset of e-commerce driven by social interactions and popular influencers and businesses. Consumers engage in social commerce on (1) social media services such as Facebook, Twitter, Snapchat, Pinterest, and Instagram; (2) content aggregator services hosting social interaction and e-commerce advertisements such as YouTube and Reddit; and (3) applications or websites focusing in on and expanding upon the social commerce functions of social media services to create a marketplace such as Depop or Pinduoduo (a Chinese website).

As social commerce is a relatively new phenomenon, this post will delve into statistics quantifying this online activity, and discuss the potential behind social commerce — whether this is the beginning of a new business model or simply a narrow e-commerce practice targeting certain groups of individuals.

Social Commerce by the Numbers

As e-commerce as a percentage of retail has risen, it evolved alongside the technology available to us. Mary Meeker’s Internet Trends 2018 highlights how e-commerce is becoming more mobile, interactive, personalized, seamless in transactions, and capable of being shared. Social commerce benefits greatly from this evolution.

A 2017 consumer survey concluded that 76% of consumers purchased a product they saw in a brand’s social media post or profile, over 75% of younger (18-34) consumers discovered or reported seeing a product they were interested in on Facebook, 59% said the same for Pinterest and Instagram, 34% for Twitter, and 22% for Snapchat. Facebook alone saw greater than $80 million of ad revenue pass through its platform, not to mention the direct user transactions through Facebook Marketplace, which is used by 800 million people around the world monthly. Instagram has over 25 million businesses and over 80% of Instagram users follow at least one business. Instagram is also developing their own application specifically dedicated to shopping. Snapchat offers a range of commerce facilitating capabilities, including sponsored lenses that can layer snaps with ads and sponsored geofilters, and is expanding them further with shoppable AR (augmented reality) lenses. Snapchat also estimates that 70 million users engage with lenses each day. Pinterest hosts over 200 million active users and has “buyable” pins allowing users to purchase items natively throughout the site.

Not only are social media services creating opportunities for social commerce, but new services are being created for the sole purpose of social commerce. Depop hosts all types of sellers — artists, designers, influencers, and more — to create a social marketplace where users can see what their friends and people they follow are liking, buying, and selling, and do the same. Pinduoduo operates by awarding discounts each time users find, share, and purchase products with their friends.

A massive amount of small and medium-sized businesses operate on these services not only passively advertising, but taking advantage of the benefits social media has to offer and actively engaging with users. All of this signifies a greater level of value to be found in social commerce.

Narrow Practice or New Framework?

Social commerce currently has a clear appeal to younger individuals actively engaging in social media services, but while it’s known that social commerce can technologically reach a wider consumer base, can it attract the general populace? Whether or not social commerce reaches a greater consumer base or only shifts from generation to generation can be determined by two things. First, it will depend on whether individuals will pursue alternate buying practices when they age out of the 18-34 age bracket. There is the possibility this means of commerce will not expand past that age group but as technology and social connectivity expands into more areas of our lives through advances in technology like IoT and our presence online increases, social commerce is likely to further integrate with new and existing services and expand into more aspects of our lives. Second, it depends on whether social commerce can diversify its offerings enough to attract a wider range of consumers than just the younger age bracket. To succeed, services must recognize that further generations born into greater connectivity and online social connectivity will only increase their presence and familiarity with such services online and contain products that appeal to people throughout their lives.

Services offering social commerce opportunities are also appearing across the world and many operate internationally due to their online nature. China’s social commerce market is experiencing a huge wave of consumers, reaching over 400 million smartphone based online shoppers, following and reacting to the purchases of their friends with the rise of Pinduoduo and other services. China’s Alibaba group is also partnering together with several Russian companies with the intent to create a social commerce platform for Russia integrating e-commerce, social commerce, and gaming.

As consumers continue to follow the increasing trend of engaging socially in greater numbers than previous generations, new applications of this form of commerce are likely to diversify and increase.


New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.