With the estimated revenue to surpass one trillion dollars in 2028, Social Commerce is expected to grow at a CAGR (Compound Annual Growth Rate) of 13.7 percent in the time period of 2023 to 2028, according to Statista, a market research firm. Social commerce involves embedding shopping capabilities within social media platforms, allowing users to seamlessly discover, research, and buy products without leaving their social feeds. Unlike traditional e-commerce, where transactions occur on external retail sites, social commerce brings the shopping experience directly to users’ preferred walled garden. This model caters to the increasing demand for convenience and immediacy in online interactions.
“Social commerce in India is set to experience significant growth in the coming years, driven by increasing internet penetration and the rising popularity of social media platforms. According to a Bain & Company report, social commerce in India (in terms of gross merchandise value) was estimated at ~ $2 billion in 2020 and is projected to reach $16-20 billion by 2025 and $60-70 billion by 2030. This surge is fueled by the integration of shopping features on platforms like Facebook, Instagram, and WhatsApp, which simplify the buying process and enhance user engagement,”Subrato Bandhu, VP- India, Sprinklr, told BrandWagon Online. The surge in social commerce is underlined by statistics. Instagram revealed that over 130 million users engage with shopping posts each month. Similarly, a Jungle Scout’s report said that as much as 43% of Gen Z consumers start their online product search on TikTok, another social media platform, than on Google.
How do Influencers come to play?
Influencer marketing is another key trend, with influencers playing an integral role in driving sales. Their ability to blend product endorsements with personal content creates a more authentic and engaging shopping experience. Additionally, according to the Advertising Standards Council of India (ASCI), 70 percent of Indians are likely to buy a product that an influencer endorses. This shift is prompting traditional e-commerce models to adapt by incorporating more social elements into their strategies,” Bandhu added. As social commerce continues to expand, traditional e-commerce platforms will need to integrate social features and adopt more interactive and personalised marketing approaches to remain competitive and relevant in the evolving digital landscape. From what is understood, influencers are central to the success of social commerce. A report by Nielson states that 92% of consumers trust recommendations from individuals over traditional advertising, which translates into higher engagement and conversion rates for products endorsed by influencers. Brands are increasingly collaborating with micro-influencers, those with smaller but highly engaged audiences, to create authentic and relatable shoppable content, enhancing their social commerce strategies. Furthermore, in 2023, the global penetration rate of social commerce had risen to approximately 23.6%, reveals Statista. According to Sprinklr, out of the 4.9 billion social media users across the world, about 76% of consumers discover products through brand posts. Another report by Meta reveals that 81% of consumers explore products on Instagram and Facebook.
Social commerce provides valuable insights into consumer behaviour. Platforms like Instagram and TikTok offer detailed analytics that help brands understand user interactions, preferences, and engagement. This data is crucial for refining marketing strategies and delivering personalised shopping experiences.
What the future holds
“To stay competitive, traditional ecommerce brands will need to adapt by enhancing their delivery processes, investing in logistics management and incorporating interactive features to stay ahead of the curve. A similar trend is expected to occur in social commerce, where speed of delivery will become a critical differentiator, in addition to price and variety,” Vaibhav Velhankar, chief technology officer, Segumento, said. The future of social commerce is set to be shaped by advanced technologies. Innovations such as augmented reality (AR) shopping experiences, live-streamed shopping events, and AI-driven personalization are expected to further enhance the shopping experience. AR allows users to virtually try on products, while live-streamed events offer real-time interaction and instant purchases.
“Emerging technologies like AR and AI are already playing a significant role in social commerce. With the advent of Generative AI, brands can now offer highly personalised recommendations and refine product searches with greater accuracy, simplifying processes that previously required significant effort.” Velhankar added. Multimodal AI technologies facilitate more efficient design and maintenance of product catalogues, while voice and image-based search functionalities further improve user interactions, making it easier for customers to find and purchase products. Brands should leverage these technologies by integrating them into their strategies, adopting AI-driven personalization tools, implementing AR features for virtual try-ons, and incorporating advanced search capabilities to enhance the overall shopping experience.
“You can build and train AI models to listen & engage on channels of choice for consumers. AI-powered chatbots already offer real-time customer support and tailored recommendations based on user behaviour. Additionally, AI algorithms can also analyse data to predict trends and optimise advertising efforts.” Bandhu added. As social commerce continues to evolve with new technologies and features, it will play an increasingly central role in retail, changing the way consumers engage with brands and make purchasing decisions.