Globally, social commerce is expected to grow three times as fast as traditional commerce to $1.2 trillion by 2025, up from $492 billion currently. Roughly 62% of this growth will be driven by millennials (33%) and Gen-Z (29%), with Gen-X (28%) and baby boomers (10%) trailing closely behind. In all, social commerce is poised to take a large chunk of the e-commerce market as consumers gravitate to doing their shopping on social apps.

As someone with several years in the influencer marketing world, I’ve closely watched trends related to e-commerce and social commerce as platforms and the consumers using them have evolved to embrace new technologies and features. Social commerce offers something radically different than traditional e-commerce by carefully blending buying and selling with a sense of urgency across communities. Further, it’s altering who holds power within the global economy. Smaller creators, influencers and sellers are increasingly finding new avenues to attract consumers, tipping the market share in their favor. This change is partly due to two factors: First, the pandemic drastically altered how consumers buy their merchandise by accelerating the adoption of social media marketplaces. And second, calls among consumers to buy local and support small businesses grew exponentially, receiving amplified growth as social networks power the social storefronts of tomorrow.

In a technology-enabled, socially connected world, all the tools, networks and strategies that exist to drive social commerce initiatives have exponential power compared to more traditional linear e-commerce tactics, especially across younger demographics. Together, millennials and Gen-Z, who already derive much of their influences from social media, online content and celebrities, are projected to account for over half of the global population by 2030. As these cohorts age, their spending power will grow significantly, parallel to their dominance.
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1. The Rise Of Social Influencer Commerce

Younger customers have grown up in a world dominated by ads desperate to influence their purchasing decisions. Despite this, they organically turn to people they trust—family, friends, communities and even authentic influencers they follow—for recommendations and inspiration. They want to feel inspired, informed and confident in their purchases. Social commerce caters to those needs, providing a shopping experience that encourages discovery and personalization to build authentic connections between consumers and the brands they interact with.

Beyond that, enhanced audience ad profiling and targeting on social, better customer understanding, and deeper analytics have created another seismic opportunity directly attributed to the rise of social commerce. Given that consumers spend more time on mobile apps than on their mobile web browsers, wishful thinking may imply an indirect paradigm shift away from Google, as the world’s most powerful advertising platform, to Facebook. When executed to perfection, social selling strengthens positioning among existing customers and—perhaps more importantly—enables businesses to acquire new customers that are keen on innovative social shopping formats and experiences.

Some of the most successful examples of social commerce done well can be found in China, where about 71% of the consumers surveyed noted they are likely to shop on social media platforms, compared to 42% of global respondents. In 2021 alone, Chinese social commerce on platforms such as Taobao Live and Xiaohongshu (Little Red Book) generated over $400 billion in sales.
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2. Early Adopters In The West

While China’s success with social commerce is admittedly light-years ahead of its Western counterparts, there are several notable early adopters across Europe and the U.S. For example, US beauty retailer Colorstreet reported selling $1.3 mln in products with a 6.3x RoAS following its development of highly curated influencer creative across key SKU’s.

Similarly, in late 2020, Walmart streamed an hour-long “Holiday Shop-Along Spectacular” over TikTok in collaboration with 10 popular creators. The event had a bigger audience than expected and helped the retailer increase its TikTok follower base by 25%.

Marketers have realized that the steady rise in time spent on social media reflects how essential social platforms are in customers’ daily lives. Nearly half (44%) of the world’s population uses social media, with many spending an average of almost two and a half hours a day on social platforms. As the vast majority of consumers have embraced social media as a source of entertainment, others rely on it for news, education, communication or even politics. Adding commerce into the mix is just a natural progression.

Social commerce accelerates customer decision journeys from awareness to purchase almost instantly: When users see something they like and want to buy, it makes sense to streamline the purchasing process for that item in-app as part of the native experience. Paid social media further acts as the perfect conduit to accelerate buying behavior by serving exactly the right offer to exactly the right customer at exactly the right time, and is intrinsically powered by the customer data profiles that underpin these scalable recommendations to virtually any audience.
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3. If The Ecosystem Works Together, Everyone Wins

As I mentioned already, social commerce is expected to grow three times faster than traditional e-commerce as the number of consumers who regularly make purchases through social media platforms rises. This growth is will likely have far-reaching implications for brands and consumers alike as platforms and advertisers alter their strategies to attract target audiences better.

However, brands need to ensure that their strategies reflect their advertising data models with the right amount of authenticity, humanity and convenience to truly succeed. Without these things, brands hoping to build rich ecosystems of loyal followers and collaborative partnerships within these social ecosystems will struggle to do so.

Moreover, brands and influencers that can work together with their audiences to share creativity, inspiration and insights and drive purpose-led campaigns and promotions over a variety of platforms will likely outpace others that fail to provide these experiences. Brands eager to deploy social commerce strategies also need to move quickly when outlining their strategies and be open to regular experimentation to capture—and keep—audiences. With the proper ROI framework, brand creative and analytics in place, social will be the channel that unlocks more performance than companies could ever imagine.

‍*this article first appeared in Forbes magazine and was redacted to suit this blog. The original article was written by Steven Lammertink, CEO and founder of The Cirqle.