It’s not uncommon to see the option to buy a product on Instagram while scrolling through the feed. More and more brands have used this feature to promote their products over the past year, which represents an increase in social commerce.
Social commerce refers to the use of a social media community to drive e-commerce sales and social media giants like Facebook and Instagram now have markets for users to purchase items from their sites.
Unlike social media marketing, it allows consumers to buy a brand’s products and services directly, on the social media platform.
It differs from e-commerce, which refers to a shopping experience through a dedicated branding website or application.
With social commerce, the whole online shopping experience can happen without the consumer having to leave the social networking site where they are.
In essence, this can mean less disruption to the customer, allowing them to trade almost instantly, with fewer clicks. On the other hand, it allows brands to ship their products to customers in a more direct way.
While social commerce changes the game of smaller brands and allows them to compete in a crowded market, large retailers are also jumping into the market.
Popular local brands such as Golden Moments, Secretlab and Love, Bonito, have a presence in Facebook stores, where they present their collections of products and products.
Facebook stores was launched last year and is a “first mobile shopping experience where companies can easily set up an online store on Facebook and Instagram for free.”
It also allows marketers to connect with customers via WhatsApp, Messenger or Instagram Direct to answer questions, offer assistance and more.
The e-commerce boom
In recent years, e-commerce has been growing in popularity.
Due to the Covid-19 pandemic, the volume of transactions at e-commerce sites has increased even more drastically. Singaporeans have increasingly used e-commerce sites to buy food products to clothing and groceries.
The pandemic has also revealed opportunities for Singapore’s e-commerce sector. Most retailers have realized that digitization is one of the best ways to reach the customer base and have developed an e-commerce strategy.
In accordance with Statistician, e – commerce market revenue is expected to reach US $ 2.793 billion (US $ 3762.67 million) in 2021.
With a general downward trend in retail sales, e-commerce seems to be the solution to boost the retail industry. However, will the increase in social trade disrupt the long-term reign of traditional trading posts?
Is social always better?
Definitely, there are some cases in which the experience of social commerce triumphs over that of e-commerce, both for consumers and for companies.
First, social media makes the shopping experience much more interactive than a typical e-commerce game. Consumers can easily comment and review items purchased by their followers or speak directly with merchants.
This is also good for companies. According to a Facebook investigation, 81% of buyers researching products on Instagram and Facebook and putting products on these sites dramatically increases a company’s reach.
Social commerce also acts as a real-time platform for companies to get feedback on their products, as their products are in a position where customers can review and discuss it instantly.
Customer data available on social media gives brands a clear idea of who their target audience is. This gives them a better opportunity to modify their ads to better target the right consumers, which leads to sales.
In addition, social commerce eliminates the friction of consumers ’journey from product discovery to purchase. As for the consumer, less research is needed and the need to switch from social media to e-commerce website is eliminated.
Social commerce will not yet replace e-commerce
Before the rise of social commerce, consumers followed brands on social media for inspiration, or perhaps to know when a sale would be launched. Since then things have changed and now people can save the products they want to buy on social media or even buy it right away.
However, social commerce is unlikely to replace e-commerce any time soon. Although social media penetration is in Singapore 75 percent, statistics on social trade penetration are not yet widely available.
This shows that the industry is still in its infancy, mostly because the Facebook store feature was only launched last year.
Also, despite lower friction levels when shopping on social media, many still don’t associate Facebook and Instagram with platforms where to shop. Keeping up to date with the latest news and updates from your friends remains the key feature of social media.
That said, the potential for social commerce to become popular in Singapore is high. Brands are likely to improve the experience and products available on their social trading platforms because of the benefits it brings them.
This will result in a better shopping experience for customers and a snowball effect can occur, which will lead to greater use of social commerce to buy.
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