The Rise of Social Media E-Commerce and Why it Works
The Rise of E-Commerce
Since 2007, the rise of social media e-commerce (or electronic commerce) has changed the way that consumers buy goods forever. Social Media Commerce is a form of e-commerce that integrates its platform into a virtual shopping experience. By using targeted advertising and product placement, social media has become a place to get news, an entertainment source, and a shopping experience on top of that. From Facebook Marketplace to TikTok Shop, every platform wants a piece of the e-commerce pie.
In 2022, Social Commerce generated 728 Billion dollars, and this number is only expected to grow. Nowadays, a social media strategy is at the core of every company's marketing mix. This is no coincidence. A personalized ad campaign on social media is proven to increase sales and allows for a unique opportunity to bond with a target audience.
“Social commerce is the next digital shopping revolution and it will change people’s shopping behavior as profoundly as internet shopping did over the last twenty years.”
TikTok Is a Rising Force in Social Commerce, 2020-2026
social buyers by platform, millions
Why it works
Social media commerce is effective due to its clickable nature. With targeted marketing plans directing certain content to consumers, digital social media platforms have evolved to include in-app purchasing from the ads they see. Taking advantage of its user base, platforms can use their predetermined algorithm to promote specific products, all for a cost, of course.
Facebook marketplace is known as the staple for e-commerce on social media platforms. An estimated 485 million, or 16% of active users, log in to Facebook for the sole purpose of shopping on Facebook Marketplace, according to Capital One Shopping statistics. Facebook found its niche of used furniture and appliances very early on in the e-commerce boom, getting a head start on its brand identity and establishing itself as a credible platform. The Facebook marketplace requires participation from both buyers and sellers, but they have no issue targeting their users to do both.
Marketing With Influencers
Today, most big brands choose to partner with “influencers” to promote their products to a younger audience. A social media influencer is a user with an established following or credibility. These virtual celebrities use their online content to share opinions, engage with their followers, and, of course, promote products. Influencers and brands often collaborate to push their product into a medium with a trusted figure.
One influencer, Chloe Caldwell, uses her platform to promote clothing items and other fashion brands. While some companies offer her clothes and accessories to promote, others pay big money for her to advertise their product to her followers.
The Big Winners and Losers
The social media commerce industry is expected to grow within the next several years. While Instagram and Facebook are at the top of the pack, other social media platforms are taking advantage of the landscape ahead. TikTok has begun developing its social media commerce platform TikTok Shop, but it has yet to be nearly as successful as Instagram or Facebook. Loosing almost 500 Million dollars within their first year, users blame Tiktok’s approach.
TikTok has shown to use the algorithm it controls to its advantage and make certain products within its own shop “go viral,” resulting in a boom in sales. Well-known products like the pickle sweatshirt and chamoy pickle from the TikTok Shop were so widely advertised most TikTok users have seen an ad. Allowing for tremendous discounts and over-pushed products, some users report the products as cheap, repetitive, or even counterfeit.
Even though TikTok shop is one of several social media platforms finding their niche in the e-commerce world, these shops are just the beginning of the digital marketing revolution to come.
