The Rise of Social Shopping

Global eCommerce Sales by Region (2024)

While the majority of core retail sales (excluding food, automobiles, and gas) still take place in stores, consumers have shifted much of their shopping habits online, making up 30% of the sales in 2023. This figure could potentially reach 34% in 2028 according to our analysts.

Online shopping typically involves searching and clicking into a specific website or an ecommerce storefront, but there’s a growing trend in bringing the shopping experience to where consumers are spending a lot of time – social media.

What is social shopping?

Social shopping, or social commerce, is the selling of products through social media platforms. Sellers would often engage with their prospective buyers by offering advice, support, and trends through their social accounts and posts. It’s also changing the way products are being discovered by having a channel that can speak and interact directly with the consumer.

In 2024 so far, US internet users spend an average of 2 hours and 16 minutes on social media every day, slightly less than the worldwide average of 2 hours and 23 minutes, according to Statista, a data and business intelligence platform.

More than half of the world’s population uses social media, and social media firms have realized that adding commerce to their platform is a lucrative business opportunity. By bringing the shopping to their users, platforms have been able to monetize user engagement and interactions, keeping users in their ecosystem without the need to navigate away.

Social commerce evolved from private chats to formal platforms

Goldman Sachs Research noted that a large part of social commerce is informal, where sellers and buyers message each other directly through the platform for transactions. But consumers are gradually shifting towards more formal and shelf-based (a virtual shelf displaying your products with links to the product page, reviews, social media accounts, video content, etc.) social commerce features.

These formal features include a marketplace where content creators and brands can directly share products and recommendations through posts on their accounts. An emerging format uses livestream and short-form video to sell and receive payment without leaving the social platforms’ ecosystem.

While social commerce is still looking to liftoff in the US market, this form of selling has already been well adopted in China and southeast Asia.

Social shopping is expected to expand despite trust issues

While the US is lagging in adoption, China is leading globally in social commerce where transactions take place on-platform and through livestream and short-form videos. This format made up 15% of China’s total addressable market for ecommerce in 2021, and it’s estimated to reach 25% by the end of 2025, according to Goldman Sachs Research.

A recent survey from eMarketer, a market research company, revealed that younger generation of buyers are more likely to shop on social media platforms. But despite the growing shift towards social shopping, platforms will still need to overcome trust issues such as concerns over how platforms manage personal data, risks of counterfeit products, and poor shipping experience.

Social media firms are already in the process of making everything on their platforms “shoppable” where possible, and this trend is likely to cement the next big change in how we shop.