Will it disrupt e-commerce’s long-lasting reign?

It’s not uncommon to see the option of purchasing a product on Instagram while scrolling through your feed. More and more brands have used this feature to promote their products over the past year, which represents an increase in social commerce.

Social commerce refers to the use of a social media community to drive e-commerce sales, and social media giants like Facebook and Instagram now have marketplaces for users to purchase items directly from their sites. .

Unlike social media marketing, it allows consumers to purchase a brand’s products and services directly, within the social media platform.

It differs from e-commerce, which refers to a shopping experience through a dedicated branded website or app.

With social commerce, the entire online shopping experience can take place without the consumer having to leave the social networking site they are on.

In essence, this can mean fewer interruptions for the customer, allowing them to complete transactions almost instantly, with fewer clicks. On the other hand, it makes it easier for brands to offer their products to customers.

While social commerce is a game-changer for small brands and allows them to compete in a crowded market, large retailers are also jumping on the bandwagon.

Facebook stores
Golden Moments, SecretlLab and Love, Bonito on Facebook stores

Popular local brands such as Golden Moments, Secretlab and Love, Bonito are all featured on Facebook stores where they showcase their merchandise and product collections.

Facebook Shops was launched last year. It is a “mobile-centric shopping experience where businesses can easily create an online store on Facebook and Instagram for free.”

It also allows merchants to connect with customers through WhatsApp, Messenger or Instagram Direct to answer questions, offer support and more.

The e-commerce boom

Shopee e-commerce
Image Credit: Vulcan Post

In recent years, electronic commerce has become increasingly popular.

Due to the Covid-19 pandemic, the volume of transactions on e-commerce sites has further increased significantly. Singaporeans are increasingly using e-commerce sites to shop for products ranging from food and clothing to groceries.

The pandemic has also exposed the opportunities for Singapore’s e-commerce sector. Most retailers realized that going digital was one of the best ways to reach their customers and developed an e-commerce strategy.

According to Statista, the e-commerce market revenue is expected to reach US $ 2,793 million (S $ 3,762.67 million) in 2021.

With a general downward trend in retail sales, e-commerce appears to be the answer to boost retailing. However, will the rise of social commerce disrupt the lasting reign of traditional commerce sites?

Is the social always better?

Instagram social commerce
Image Credit: MENABytes

There are certainly instances where the social commerce experience triumphs over the e-commerce experience, for both consumers and businesses.

First, social media makes the shopping experience much more interactive than a typical ecommerce frenzy. Consumers can easily comment and review items purchased by their subscribers, or speak directly to merchants.

It’s also good for business. According to a Facebook study, 81% of shoppers search for products on Instagram and Facebook, and putting products on these sites dramatically increases a business’s reach.

Social commerce also acts as a real-time platform for businesses to get feedback on their products, as their products are placed in a position where customers can instantly review and discuss them.

Customer data available on social media gives brands a clear idea of ​​their target audience. This gives them a better opportunity to tweak their ads to better target the right consumers, thereby driving sales.

Additionally, social commerce removes friction from the consumer’s journey from product discovery to purchase. On the consumer side, less research is needed and the need to switch between social media and e-commerce website is eliminated.

Social commerce will not replace e-commerce yet

Before the rise of social commerce, consumers followed brands on social media for inspiration, or perhaps to find out when a sale would go up. Things have changed since, and now people can save the products they want to buy on social media, or even buy them right away.

However, social commerce is unlikely to replace e-commerce any time soon. Even though Singapore’s social media penetration is around 75%, social commerce penetration statistics are not yet widely available.

This shows that the industry is still in its early stages – especially since the Facebook Shops feature was only launched last year.

Additionally, despite reduced friction levels when shopping on social media sites, many still don’t associate Facebook and Instagram with the platforms to buy from. Keeping up to date with the latest news and updates from their friends remains the key function of social media.

That being said, the potential for social commerce to become more popular in Singapore is high. Brands are likely to improve the experience and products available on their social commerce platforms because of the benefits this brings them.

This will result in a better shopping experience for customers, and a snowball effect could occur, leading to greater use of social commerce for shopping.

Featured Image Credit: Consultus Digital


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Jothi Venkat

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