Social Platforms Embrace Social Commerce

Strategy Briefing

About This Report

Oct 2015

2015 has seen a flurry of announcements from Western social media giants regarding new ways to buy products on their platforms. Even messaging apps are moving into social commerce (s-commerce) to take advantage of what they believe is a perfect storm of strong global Internet penetration and consumer willingness to shop online. Unlike Chinese players that moved into s-commerce early, Western platforms have been cautious, fearful of scaring away users with aggressive marketing.

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Social Platforms Embrace Social Commerce

The world is ready for s-commerce

Sufficiently strong mobile and fixed Internet penetration, high usage of social media, expansive adoption of online payment methods and a maturing e-commerce market globally are factors that underpin the lucrative potential of the emerging s-commerce landscape. Companies believe consumers are ready to buy goods from online social platforms.

Both social media and messaging apps to compete

Social media giants such as Twitter and Facebook are rolling out s-commerce solutions at the same time as mobile messaging apps including Line and WeChat. Success in the surging mobile retail market will depend on app ease of use, payment security and fruitful e-commerce partnerships.

China is the world’s s-commerce leader and pioneer

With the rest of the world only now catching on, China has had a booming domestic s-commerce space for years. Its success has been underpinned by the integration (social platform>e-commerce site>payment tool) of the various channels into huge holding companies such as Tencent and Alibaba.

Females key for s-commerce success

Engaging with the female consumer is vital. Females are strongly engaged with social media and are becoming decision-makers in purchases, especially in segments such as fashion and apparel.

The elderly and the unconnected pose challenges for market

Some of the biggest hurdles to s-commerce success include unlocking the elderly consumers, who are the weakest users of social media and apps, as well as gaining access to emerging markets with weak digital landscapes.

Introduction

Scope
Key finding
Why is social commerce lucrative?
Social media brands s-commercialise in a year…
While messaging apps not far behind

Why now?

Internet penetration: S ufficient maturity and web market size
E-Commerce: Booming online retail markets led by China
Mobile: Consumers ready to shop and socialise on the move
Smartphones become mainstream worldwide
MySpace: An s-commerce case study in caution

S-Commerce Opportunities

Huge social media base offers global e-commerce audience
S-commerce to enhance online advertising revenues
Social media offers an engaging channel to female consumers
Emerging markets have already adopted s-commerce practices
And China in particular is a global s-commerce stand-out

Market Challenges

W eak mobile broadband access in major emerging markets
The elderly segment is lucrative but off the social media grid
Email and search provide competing shopping channels
Shifting the consumer mentality from social to shopping
Shopping options should not degrade the user experience

Conclusion

The benefits of s-commercialisation are considerable
By 2030, s-commerce can target half of the global populace
But smart execution is key to minimising the risks