TikTok, boom

Social commerce is revolutionising the way we shop.

It allows for more efficient discovery, purchase, and sharing of new products with peers, and creates a more personalised experience. It also reflects a shift in power from large retailers to brands and consumers, accelerating a change in consumer values towards recommendations and inspiration from people they trust.

Growth of social commerce is largely driven by Gen Z, with 97% using social media as their top source of shopping inspiration. The market size is expected to reach $1.2 trillion this year and estimated to reach $2 trillion (28% of total ecommerce sales) by 2025 as social platforms continue to develop their shopping capabilities. China is expected to drive this growth, having the most established social commerce market to date, with nearly half of internet users in China having purchased products through social commerce in 2021, although the US and other western markets are expected to take off rapidly during the next few years.

Smaller brands benefit
The key benefit of social commerce versus ecommerce is the organic discoverability of brands and products that it facilitates. This has created significant opportunities for smaller brands, allowing them to leverage the power of social sharing and to tap into markets that were previously unavailable. This market shifts away from large retailers selling to the masses, to millions of smaller businesses competing within this vast social commerce ecosystem. Research from Accenture found that 59% of social buyers are more likely to buy from a small business when shopping through social commerce versus online.

TikTok is a significant platform for small brand promotion, with over 1 billion monthly active users, meaning content is likely to be seen and engaged with by the target audience. For example, Glow Recipe, an independent beauty brand that joined TikTok in 2021, saw a 600% spike in daily sales after products were featured on TikTok with millions of views. The brand was one of the first to try TikTok shopping by creating a digital storefront within the app, linking products shown in videos for users to purchase, which has driven continued sales growth since the viral video.

Made By Mitchell, a makeup brand by an independent UK make up artist, saw a blush product go viral on TikTok after videos gained millions of views. The brand gained further sales through selling on TikTok Live, which involves showcasing products in real time on a livestream, then a pin pops up for products where customers can purchase through the app. 

Bigger brands catching up
Larger brands are having to adapt to this new online climate to remain relevant and compete against smaller brands. Amazon has created a livestreaming platform Amazon Live that allows brands and influencers to promote the discovery of products by hosting their own livestreams for consumers. Livestreams can be accessed on the Amazon website or app and products featured in the videos are tagged to allow customers to purchase. 

Many popular high street fashion brands, including Nike, H&M, Asos and & Other Stories utilise Instagram to generate sales and brand awareness, involving in-app shops where customers can view products and all their relevant information and checkout directly within the app. Brands can also tag products shown on posts, stories, reels, and ads, which link to the page of the exact product on the Instagram shop.

Collaboration with physical stores
There is potential for collaboration between physical stores and online channels to harness the power of social and digital to drive store footfall. Westfield London hosted a collaboration event with TikTok called TikTok For You House. Shoppers were invited to spend a day in Westfield to see the app's `for you' page recreated as a live experience, with the chance to meet well known TikTok creators.

Given the future expected growth in social commerce over the next few years, retailers must integrate social commerce into their overall ecommerce strategy to optimise their omnichannel experience going forward.

Emily Brown