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Social commerce is quickly revolutionizing traditional ecommerce and radically disrupting brick-and-mortar retail.
It moves the entire shopping experience onto social media platforms, from finding and researching products to directly purchasing them. It integrates product showcases, in-platform brand pages and native checkout, all in one place. The obvious benefit to consumers is the uninterrupted social media content-viewing experience; they don’t have to navigate to a separate ecommerce platform to make purchases.
TikTok has the potential to pull ahead of the pack due to its 150 million users and the overindexing among Gen Z and other younger shoppers. The typical Gen Z consumer spends 10 hours per week on TikTok but just 5 hours on Instagram, for example. Brands should note that TikTok has become increasingly attractive as a social commerce platform. Research firm IZEA reported that in 2021, 33% of consumers named Instagram the best platform versus 19% naming TikTok. In 2022, these positions were reversed, with 24% favoring Instagram and 31% TikTok.
However, TikTok Shop also has unique problems to navigate. Here, we look at the social commerce space as a whole and what to consider when investing in this next wave of the shopping experience.
The current state of social commerce
Social commerce is available on major platforms like Facebook, Instagram, Pinterest and TikTok, and it’ll only continue to expand. EMarketer forecasts that social commerce revenues will total $82.8 billion in 2024, nearly doubling to $144.5 billion by 2027, and growing from 6.6% of total U.S. commerce sales to 8.4% in that same timeframe.
Gen Z’s increasing purchasing power, online behaviors, shopping preferences and personal opinions drive them to social commerce sites. Their purchasing power in 2023 totals approximately $360 billion, 5% of the U.S. economy. That’s more than any other generation, and that percentage is expected to grow to 17% by 2030. Gen Z will continue to grow as social network users, from approximately 60 million in 2024 to nearly 66 million in 2027, which is significantly faster than other generations.