Social networks are gaining momentum in e-commerce. After Facebook and Instagram, many platforms are expanding their sales functions, be it TikTok, Snapchat, Pinterest or Youtube. This development is strategic for these actors in order to capture the relationship with the customer and be remunerated.
Three fastest growing social commerce sites
The evolution towards true social commerce is underway. It is expected to grow three times faster than traditional e-commerce by 2025, according to an Accenture study published last January. Younger generations Y and Z are moving away from e-commerce sites and brand apps to move to products offered through social platforms.
However, the journey to online sales is a challenge because it requires the mastery of complex and increasingly personalized services such as payment, delivery with returns management or inventory and product catalog management. Therefore, we don’t become an e-commerce platform overnight. One example is TikTok, the Chinese platform for sharing short videos. It could grow rapidly and is expected to exceed 1.5 billion active users in 2022, slowly positioning itself as a sales tool.
For this, TikTok relies on a partnership with Shopify, an e-commerce platform provider, to offer the TikTok Shopping service. This is currently only operationally available from August 2021 in the US and UK. Powerful advertising and marketing features were launched in late 2021.
Synchronization of the shop and the social network
TikTok Shopping allows Shopify store owners to sync their product catalogs with TikTok to create virtual stores. If payment is made on the seller’s Shopify site for the time being, the leaders of the TikTok platform are planning to develop this feature but have not yet detailed this change.
We will still have to wait for France because TitkTok has just postponed the opening of its Data Center in Europe to 2023, expected to comply with the GDPR legislation on the protection of personal data. For memory, TikTok is the subject of a European-wide complaint regarding user rights. No launch date for TikTok Shopping has been announced for France. Even though Shopify e-commerce software accounts for only 20% of the French market, TikTok’s initiative in social commerce is particularly anticipated. TikTok was the first most downloaded appuh fourth of 2022 ahead of Instagram, Facebook and Whatsapp and attracts more young people.
In terms of trade, TikTok thus comes to walk on the flat bands of Facebook and Instagram offering the Online Shops function from May 2020. Businesses can develop their own store to sell and collect directly within one of these two platforms.
An integrated customer experience on Facebook and Instagram
Consumers no longer need to visit a brand’s e-commerce site to order a product they spotted on Facebook or Instagram. These two platforms are the only ones to offer such a customer experience. Other platforms such as Pinterest and Snapchat offer e-commerce features with product catalogs or virtual stores but without any real integration of payment functions.
If TikTok positions itself as an Instagram competitor on the target of young people, the Chinese platform is still far behind the Meta group and its $ 115 billion in advertising revenues in 2021. Despite its rapid growth, TikTok’s ad revenue forecasts are estimated at $ 11 billion in 2022, slightly more than Twitter and Snapchat combined.
But TikTok also competes with Youtube by extending the duration of shared videos to 10 minutes and Youtube responds by accelerating live shopping with new features scheduled for 2022. TikTok is also present in live streaming sales. Walmart, the American retail heavyweight, pioneered this feature in December 2020. Facebook also offers live shopping. The battle for social commerce is in full swing.
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