What’s Social Commerce & Why it’s the Next Big Shopping Trend
Social commerce, think eCommerce meets social media, is seen as one of the next big shifts in the way we shop. China is leading the wave with social commerce sales expected to reach $316 billion in China in 2021, up 30% over this year. One of the apps facilitating the growth of social commerce is Douyin. If you are not familiar with Douyin then most certainly you have heard of Douyin’s English equivalent, TikTok, which is also owned by ByteDance. Globally Douyin has already amassed 690 million users.
In 2018 Douyin entered into a partnership with eCommerce giant Alibaba to allow creators and influencers using the site to sell their merchandise on the platform. This partnership enabled app users to click on links in videos so they can easily make purchases from their favourite influencers on third party eCommerce sites like Alibaba’s Tmall. Recently Douyin banned links to outside eCommerce sites ensuring all eCommerce sales stay within the app.
The success of Douyin is one of the reasons why Walmart is investing in the English version of Douyin, TikTok. “If you're watching a TikTok video and somebody's got a piece of apparel or an item on it that you really like, what if you could just quickly purchase that item,” says Walmart CEO Doug McMillon. “That's what we're seeing happen in countries around the world. And it's intriguing to us, and we would like to be part of it.”
TikTok recently entered into a deal with Shopify to enable shoppable video ads on TikTok starting with users in the United States. The partnership will allow over one million merchants that use Shopify to place shoppable ads in the feeds of TikTok users enabling them to reach a young and highly engaged audience. Once a TikTok user clicks on a shoppable ad the transaction is completed on the merchant’s Shopify site. “It was obvious early on how [TikTok] was starting to influence commerce trends and trajectories,” says Satish Kanwar, who heads Shopify’s Channels division.
For a number of years Facebook has tried to cash in on the social commerce trend with limited success. For example, last year it launched Checkout on Instagram so that users can buy from brands directly without leaving the app. But to-date only a selected number of brands have signed on and it has yet to take off. TikTok may have greater success with its partnership with Shopify as ByteDance has already shown in other markets that social commerce works.
Walmart is already working with TikTok to test social commerce in the United States. On December 18th Walmart hosted the first shoppable event on TikTok. The event was called: the Holiday Shop-Along Spectacular. During the live event popular TikTok creators marketed Walmart products. Users participating in the event were able to buy products featured during the event and purchase them without leaving the app.
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