Australia’s social commerce industry is expanding, with a projected growth rate of 12.2% this year, propelling its market value to an impressive $2.67 billion. This growing sector harnesses the power of social networks and digital media to facilitate transactions between businesses and consumers.
People are shopping where?
Social commerce perfectly combines product discovery, reviews, ratings, sharing, recommendations, transactions, and loyalty programs into one space. It leverages the ubiquity of social media platforms to directly promote and sell products or services, integrating into users’ daily social media interactions.
This phenomenon owes its meteoric rise to the widespread adoption of smartphones and the popularity of social media networks, including Facebook, YouTube, TikTok, and Twitter.
According to a recent report by McKinsey, global sales from social media channels reached $37 billion in 2021, and projections indicate that the industry is approaching $80 billion by 2025. It is anticipated to account for five percent of all e-commerce sales in the United States by that time.
Platforms like Facebook, TikTok, Instagram, and Pinterest have already incorporated native social shopping features, allowing retailers and platforms to market products directly to consumers.
The darker side of social commerce
Businesses harvest data from these social transactions, including likes, shares, and comments, to refine their offerings over time, tailoring them to customer preferences. This personalized approach enhances the shopping experience, and businesses benefit from it.
It shares some similarities with traditional e-commerce, but key distinctions set them apart. E-commerce typically involves customer-brand interactions on dedicated websites or storefronts, while social commerce invites customers to make purchases within their social media experience. It relies heavily on social media platforms for customer engagement and conversions, whereas e-commerce relies on various digital marketing tactics such as advertising and SEO.
While social commerce offers cost advantages by eliminating the need for extensive website development and maintenance, it is likely to replace traditional e-commerce partially. Instead, the two can coexist in the future.
About the author
Marce has contributed tech to various prominent publications since 2018, offering a transparent perspective into the tech industry and its effects on its users. She now spends her time developing insightful content for industry players. You know, when she's not gaming or geeking out about the latest fad.
