Market Size and Forecast of Global Social Commerce Market
The global social commerce market is valued at 675.54 billion in 2020 and is expected to grow at a CAGR of 23.1% from 2021 to 2028. High penetration of the internet and increasing adoption of the smartphone is driving the market for social commerce globally. Apart from the developed economies, developing economies such as India are holding a huge opportunity in the coming years after China due to their large customer base. The social commerce market is increasing due to the increased sale of smartphones across the country. Due to the necessity and gaining popularity and adoption of smartphones, social commerce is becoming an integral part of customers' daily life and helping sellers grow their business in unsurpassed ways.
A blurred line could be experienced between social interaction and online shopping; wherein social media purchases are burgeoning their market share at a very rapid pace. Social media purchases have provided small businesses and micro-entrepreneurs the simple ways to streamline their purchase processes. Low-income customers primarily from rural areas have the benefit of bargaining through social commerce which again boosts the growth of the market in the coming years as the large population resides in rural areas even at the present scenario. Social commerce is gaining popularity as social networking is emerging as an important platform in e-commerce, primarily due to the increased popularity of social networking sites such as Facebook, Weshop, Whatsapp, WeChat, TikTok, QQ, Douyin, Sina Weibo, QZone, and Snapchat among others.
Marketing Fees and Sales Commissions
Marketing fees and sales commissions play a crucial role in purchases attracting customers and are the most common revenue sources. In this scenario, the general trend is that players with a social focus are more likely to rely on marketing fees as a primary revenue source, whereas e-commerce players leverage sales commissions. In some scenarios, few of the players are likely to charge account fees or payment and logistic fees. The global spread of social media coupled with the rapid growth of e-commerce is giving rise to a new trend where messaging, content sharing, and payments converge are playing important roles globally. Social commerce is the use of social interactions combined with the transactional nature of e-commerce that has led to new forms of shopping in collaborative online environments. In this COVID -19 pandemic where most of the industries are badly hit, social commerce and e-commerce have gained substantial revenue in this period as people avoided moving in the crowd to purchase goods. No sign as of now could be seen of slowdown either in social commerce or e-commerce.
The market is segmented on the basis of application, link/ clicking categories, by device, and by region. Further, by application, the market is bifurcated into Planned Purchase and Impulse Purchases. Both Planned purchases and Impulse purchases cover Food, Beverage & Grocery, Electronics, Fashion, Beauty, Fitness, Online, entrainment – i.e. ebooks, films and music, Home and Garden, Mother, Children and Baby, Apparel, Groceries, Sports, Furniture, Hospitality (Travel, Hotels, Restaurants) and Online Services (Insurance, Utilities, Holidays, etc.). By Link/ Clicking Categories, the market is segmented into Influencers, Banner Ads/ Video Ads, Family Friends Impact, Content Marketing, and Others. By device, the report covers the segments namely Laptops and PCs, Mobile, Tablets, and Others.
Planned and Impulse Purchases
Among planned and impulse, the planned purchases segment accounted for $452.82 billion of the overall Social Commerce Market in 2020. The Impulse purchase is growing at a CAGR of 23.2% from 2020 to 2028.
Online Retailers Vs Social Media
The prominent players in the online retailer’s market are Alibaba Group Holding Ltd, Amazon.com Inc.; Inter IKEA Systems B.V.; and Walmart Inc. The companies are offering affordable products to cater to the demand for various goods such as grocery, office supplies, art supplies, footwear, and apparel and accessories among others. Moreover, the vendors have opted for organic and inorganic growth strategies to strengthen their market position. For instance, in May 2019, the e-commerce platform Shopify acquired a New York-based wholesale good selling platform called “Handshake” to expand its service and product portfolio.
Fake Vs Real Recommendations/ Advice
Promotion of varied products on a social commerce platform to expand a business might turn to hamper growth due to fake recommendations for a new product online. Since the reviews for a product form the baseline for its purchase, chances of committing fraud through fake reviews/advice to market and attract new customers or malign other competitors increases with nearly one-third of the reviews turning out to be fake or paid. On an average considering the categories such as Electronics, Fashion, Food, Beverage & Grocery, Beauty, Fitness, Online, entrainment – i.e. ebooks, films and music, Home and Garden, Mother, Children and Baby, Apparel, Groceries, Sports, Furniture, Hospitality (Travel, Hotels, Restaurants) and Online Services (Insurance, Utilities, Holidays, etc.) 60% of the reviews/ recommendations or advices are fake. The credibility of a business and its products is detected through honest reviews provided by users who share their experiences for new customers to analyze and detect fake advice uploaded by paid users. Different websites like Yelp.com and Fakespot by Amazon are making it easier for the customers to assess and access reviews for the authentic and safe products sold online by the company while side-lining the average ones.
Trust a Key Factor in Social Commerce
In the social commerce market, trust plays a key role and is considered a crucial factor. Social media are increasingly used as platforms to not only socialize but also to shop for products and services. The major geographies covered under the scope of Global Social Commerce are the U.S., UK, China, India. North America is further segmented into the U.S., Mexico, and Canada. China is expected to experience strong growth during the forecast period in terms of revenue; however, India would experience the fastest CAGR to cross the $70 billion mark by 2028.
Social Commerce Market by Geography
By geography, the report covers North America, Europe, Asia Pacific, and the Rest of the World (RoW). China is expected to experience strong growth during the forecast period in terms of revenue; however, India would experience the fastest CAGR to cross the $70 billion mark by 2028.
Prominent Players of the Market
Some of the key players in the social commerce market are Facebook, Weshop, Whatsapp, WeChat, TikTok, QQ, Douyin, Sina Weibo, QZone, and Snapchat among others. There would be strong competition among these players during the forecast period, i.e., 2020 to 2027 to acquire the major chunk of the market.
Base Year: 2021
Forecast Years: 2021 – 2028
Historical Years: 2016 - 2020
Scope of Global Social Commerce Market Segments
The market is segmented on the basis of application, link/ clicking categories, devices, and regions.
Global Social Commerce Market, by Application (Revenue, USD Billion, 2019 - 2028)
Global Social Commerce Market, Link/ Clicking Categories (Revenue, USD Billion, 2019 - 2028)
Global Social Commerce Market, By Device (Revenue, USD Billion, 2019 - 2028)
Global Social Commerce Market, By Region (Revenue, USD Billion, 2019 - 2028)
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