In China, social e-commerce, i.e. shopping via platforms like TikTok, YouTube and Amazon Live, has long been the norm, but it could soon be similarly successful in the West.
Social commerce and online sharing are merging, and live social networking is finding an audience outside of China, Reuters writes . Its Chinese sister app enabled $119 billion worth of goods to be sold in 2021,” according to Reuters.
Online retail giant Amazon has also recognized the potential and launched a similar concept called Inspire. Revenue from live online shopping will help offset shrinking marketing budgets as social media advertising spend in the US is growing at around 30 percent a year, according to Reuters data.
In October, McKinsey released similar findings, noting that direct shopping through social media platforms is a key feature of e-commerce in China and that this new way of shopping can now hope for rapid growth in the United States as well.
In 2021, $37 billion worth of goods and services were purchased through social commerce channels in the US. This number is expected to reach $80 billion by 2025.
Influencers are key
When influencers promote products via live stream shopping events, conversion rates reach nearly 30 percent, according to McKinsey. This is up to ten times higher than the conversion rate in traditional e-commerce.
Social commerce is a relatively new revenue channel for brands, and consumers are spending more time than ever on social channels and digital platforms.
While brands don’t have the direct relationship with customers with social commerce as they do with e-commerce via their own webshop, the advantage is that customers discover and buy products in a medium in which marketing and retail channels too merge into a single dynamic universe, according to McKinsey.
This translated article first appeared on FashionUnited.uk.