Research Overview

New retail business models have emerged, and one crop is online-only businesses that sell exclusively through social media channels. Almost all social media platforms today offer retail functionalities that facilitate the electronic commerce (eCommerce) of goods and services. This online sales model is mainly driven by social influences and interactions between the users of various social media networks. Frost & Sullivan recognizes that demographic influence will play an increasingly important role in social commerce growth. In fact, 2 out of 3 gen Z consumers consider purchasing directly via social media. For instance, Facebook and Instagram are among the top 5 social media shops that generate nearly 26% of total transaction value potential globally.

Today, more than 50% of the global population is active on at least one social media platform, which brings new eCommerce opportunities to the massive global audience. Social media posts and product sharing help brands to increase customer engagement and traffic conversion. Social commerce will facilitate more and more conversion rates, with reviews, ratings, and increased click-through-rates leading to surges in site traffic. As such, small sellers and resellers will become major adopters of social commerce as they can easily access a huge volume of customers without investing in their own online eCommerce portal. Big brands are also using social platforms for advertising and boosting their customer reach.

This study offers a detailed view of the future scope of and market potential for social commerce. Mega Trends such as generational influence, growing internet and smartphone penetration, growth of direct selling, and evolving technology will contribute to the massive progression of social commerce. The study includes regional perspectives on social commerce, supported by case examples featuring popular social commerce platforms. Last, the research highlights future opportunities that will emerge to spur the growth of social selling.