How Social Commerce is Reshaping Modern Retail: A Definitive Guide

How Social Commerce is Reshaping Modern Retail: A Definitive Guide | Finance | Emeritus

With global retail e-commerce sales surpassing a staggering $5.7 trillion in 2022 alone, it is safe to assume that the online marketplace is booming. Amidst this explosion of online sales, a captivating merger is unfolding: the integration of social media with commerce. This hybrid of social media and e-commerce has come to be known as social commerce. Social media has emerged as another platform in the digital marketplace. Are you intrigued about its essence? Do you want to know more about how it alters our purchasing patterns? Join us as we venture further into this domain.

In this blog, you will learn: 

  • What is Social Commerce 
  • How is Social Commerce Different From E-commerce?
  • Examples of Social Commerce 
  • How is Social Commerce Changing Our Buying Patterns?

What is Social Commerce?highest-paying jobs in commerce

Picture this: You’re leisurely scrolling through Instagram when, out of the blue, you’re captivated by a product that calls out to you. This is certainly not an aberration. Everyone has, at some point, experienced the allure of social commerce. At its core, it is the amalgamation of social media platforms with online retail. Think of it as the edgier and trendier version of e-commerce. With platforms like Instagram and Facebook frequented by millions daily, particularly the tech-savvy younger population, it’s no surprise businesses are flocking to these spaces to showcase and sell.

On the other hand, the global tally for sales made directly through social media platforms was $992 billion (82,57,695 crore) in 2022. If you dive deeper into specific markets, the trends become even more enticing. Take India, for example: In 2022, the social commerce market was valued at an impressive $3.3 billion (27,470 crore), and it is projected to grow to $18 billion (1,49,837 crore) by 2028. Such staggering figures proving consumer preference is tilting toward social commerce clearly show its influence on the retail landscape. The proliferation of social media users combined with the allure of seamless shopping experiences makes it a force to be reckoned with. 

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How is Social Commerce Different From E-commerce?

E-commerce and social commerce, on the surface, seem to offer similar online shopping experiences. However, their differences begin to emerge when we examine them closely:

  • Difference in Transaction Process

One might assume that buying a product online would have a universal process. This isn’t quite the case. Traditional e-commerce often involves selecting a product and then getting redirected to a separate website or page for the payment process. This can sometimes mean going through several pages, filling out information, and waiting for confirmation. On the other hand, social commerce streamlines this using platforms with features that allow for in-app purchases. This seamless experience means that with just a few taps, your desired product is on its way. It not only offers speed but also leads to impulse purchases we didn’t know we wanted to make. Whether catering to impulse purchases is good for the buyer is another question, but such shopping behavior typical of social commerce trends boosts the market.

  • Buyer-Seller Liaison

Online shopping is more than just the products; it is about relationships. Traditional e-commerce platforms generally operate with a clear boundary between buyer and seller. The interaction is, more often than not, limited to transactional exchanges. Social commerce, however, changes the narrative. Here, businesses, especially smaller ones, can interact, engage, and even form tight-knit communities with their audience. This interaction fosters trust and brand loyalty and offers a personal touch often lacking in larger e-commerce platforms.

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  • Difference in Interface

The look and feel of a shopping platform can significantly impact a buyer’s experience. e-commerce platforms have a structured layout—you see a set of products, a search bar at the top, and maybe some filters on the side to narrow one’s searches. It is functional and direct. Social commerce, however, offers a rich, immersive experience that e-commerce platforms seldom provide. Think of it as walking through a vibrant market rather than a structured department store. Brands use stories, engaging videos, and interactive polls, among other techniques, to showcase their products. It turns passive scrolling into an act of discovery, making shopping an event in itself.

  • Difference of Marketplace

When picturing online shopping, platforms like Amazon, Nykaa, or a favorite brand’s website might come to mind. These dedicated platforms are the backbone of e-commerce. In contrast, social commerce takes a different route: Platforms like Instagram, Facebook, or even TikTok are transitioning from mere social interaction hubs to dynamic marketplaces. This shift ensures that while users engage with friends or consume content, they can discover and buy products without switching platforms. This blend of social interaction and shopping is creating a new-age shopping experience that’s both convenient and enjoyable.

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Examples of Social Commerce 

India’s booming user base has led to a surge in local social commerce platforms, challenging global giants like Facebook and Instagram. Let’s explore both global and local commerce examples below.

  • Facebook Shop: A Community-Centric Marketplace

Facebook, one of the most prominent social commerce examples today, has long been a melting pot of community interactions, updates, and personal memories. In recent years, it has transformed into a bustling marketplace. In April 2023, Facebook recorded the highest share in the mobile social media market across India. No wonder businesses, both big and small, have recognized its potential and set up virtual storefronts on Facebook. These aren’t typical online shops; Facebook tailors shopping recommendations based on user preferences and activities. The integrated checkout systems also mean fewer redirects and a smoother shopping journey. For many digital natives, Facebook isn’t just a social networking site anymore; it is a full-fledged shopping destination.

  • Instagram Shop: A Visual Shopping Extravaganza

Instagram has seamlessly integrated shopping into its ecosystem with the help of a vibrant visual framework. Brands don’t just showcase their products but also make them shopable. By tagging products in posts and stories, they have turned passive scrolling into active shopping. With the advent of Instagram Checkout, the purchase process has become even more simple. Users can pick, click, and buy without hopping between apps or websites. It’s no longer just a platform for influencers and photo enthusiasts; it has become a robust marketplace.

  • Meesho: The Social Commerce Pioneer

Meesho, one of the earliest homegrown entrants in the Indian social commerce arena, has drastically transformed how small businesses and individuals sell online. Leveraging a reselling model it empowers entrepreneurs to start their businesses with zero investment. By enabling sellers to share their catalogs on social media platforms like WhatsApp and Facebook, Meesho has created a seamless fusion of social interactions and e-commerce.

  • Trell: A Platform of Stories and Shopping

Trell has carved a niche for itself by blending lifestyle content with commerce. Users on Trell share video-based reviews, recipes, travel stories, and more. As the platform grew, it cleverly integrated a shopping component, allowing viewers to purchase products featured in videos. It has around 50 million active users and is a popular choice among online shoppers.

  • Moj: More Than Just Short Videos

While Moj started as a short video platform, its rapid ascent in user numbers and engagement soon made it an ideal candidate for social commerce. Realizing the potential, Moj introduced features that allowed creators to tag products in their videos, enabling users to shop directly from their feeds. This move transformed Moj from a mere entertainment platform into a dynamic social commerce hub.

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How is Social Commerce Changing Our Buying Patterns?

As our shopping platforms evolve, so do our buying behaviors. With social commerce, we are seeing a shift from intent-based shopping to discovery-based shopping. Instead of searching for a product, consumers are now finding products serendipitously while engaging with content. Furthermore, the ease of in-app transactions means users are more likely to make impulsive purchases. Brands are also utilizing influencer partnerships more than ever, leveraging their vast audiences to drive sales. In essence, social commerce trends in the domain of the digital marketplace have transformed our shopping journeys from linear paths to dynamic adventures.

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Emeritus’ online finance courses can boost your career by keeping you updated on evolving social commerce trends and their influence on retail and finance. These courses cater to both beginners and professionals.

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About the Author

Content Writer, Emeritus Blog
Sanmit is unraveling the mysteries of Literature and Gender Studies by day and creating digital content for startups by night. With accolades and publications that span continents, he's the reliable literary guide you want on your team. When he's not weaving words, you'll find him lost in the realms of music, cinema, and the boundless world of books.
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