What is social commerce?

Traditional shopping is a social activity. Look around your local shopping mall and you will notice that most people shop with friends & family, and a very small minority of people shop alone. Yet while traditional shopping experiences are social, the prevalence of social media is also causing a shift in how we all make purchasing decisions. This has led to the birth of buzzwords like ‘social commerce’. But what exactly is social commerce and what does it mean? 

There’s many different definitions of social commerce flying around on the internet. Some claim that social commerce is literally commerce - except it occurs on social networks. 

Investopedia defines social commerce as “the use of networking websites such as Facebook, Instagram, and Twitter as vehicles to promote and sell products and services.”

The definition of social commerce occurring purely on networks inherently neglects one thing: how is that a social experience? Does Instagram facilitate social feedback as part of the buying process?

Instagram’s shopping features, while convenient, have the appeal of a vending machine.  

Here’s what isn’t social commerce:

Instagram’s move into eCommerce with buy now features all enabled within the app is smart for one reason in particular. Instagram shopping enables customers to see products in their ‘natural habitat’ versus the stark, clinically white backdrops of eCommerce photography. Instagram is successful as it captures one of the underpinning motivations of shoppers; to not only understand the context of the product, but the community context of a brand. Shoppers want to understand not only if a coat looks good, but if that coat gives access to a community of other people & bloggers. 

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In this sense, Instagram’s shopping features bears similarities to social commerce in that other people’s feedback plays an indirect role in the buying process, but it still falls very short of what social commerce can be. Adding shoppable pins or a buyable Instagram feed isn’t innovation - it’s just another purchase channel. In this sense, Instagram's buying features shouldn’t be thought of so differently to a travel agent.

Here’s what is social commerce: 

eCommerce is by nature a solitary transaction. In many ways eCommerce has come to be synonymous with these transactions, as online marketplaces such as Amazon have pioneered price comparison and convenience in an easy to navigate assortment. This is at odds with the concept of social commerce, where socialisation plays an active role in the purchase process. 

In China, the world’s largest e-commerce market is currently being disrupted by a new social shopping app called PinDuoDuo. Pinduoduo is revolutionising the traditionally solitary online shopping experience by successfully integrating social functions into the user experience. App users can unlock heavily discounted products by forming shopping teams through inviting their friends and family. Pinduoduo’s harnessing of social commerce catapulted them from $0 to $24 billion within 3 years. 

As Pinduoduo illustrates, group deals and social discovery are powerful elements to social commerce. At Groupify, we combine these components in a different format. Instead of operating within a messenger app or separate stand-alone app like Pinduoduo, we equip e-commerce retailers with an integrated social layer that allows consumers to connect, discover and socialise all within their online shop. Groupify brings the conversation to your online store, making the online shopping experience social instead of a solitary Instagram transaction. And we aren’t alone in this mission to revolutionise eCommerce:

  • Dote Shopping is a mobile shopping and social app that aims to be Gen Z’s “dream mall” by enabling users to live stream their online shopping. The app builds off shopping-related content on YouTube such as hauls, get ready with me and vlogs. 

  • Meesho is a social commerce platform founded in India which equips individuals and small businesses with the ability to start their online stores via social channels, such as WeChat, WhatsApp, Instagram, etc. The company has exploded in popularity, received investment funding from Facebook and now currently has over 750 employees.

  • Wanelo is a digital shopping mall where people can discover and buy products on the internet. Wanelo has over 12 million products curated by users spanning over 300,000 stores. The Founder, Deena Varshavskaya, started the company as she found it frustrating to shop for unique items in mainstream malls and wanted to know what her friends were shopping for - yet there wasn’t an existing platform that made online social shopping easy.

Social commerce is not just adding ‘buy now’ functions to social media - it goes much more beyond that. True social commerce makes social interaction part of the shopping experience. At Groupify it is our mission to change how friends shop together and redefine social commerce.