The new world of social commerce

It integrates the scale of impact of social network platforms with the advantages of new tech.

technology, technology sector
The iPhone and other Android-based smart phones launched in 2007, when the oldest Gen-Z-ers were 10. (File photo)

By Siddharth Pai

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My son Vikram has been working on his own start-up for a while. This is no longer an unusual career path for a graduate from one of the top schools in the world, but I have been querulous about his choice.

Recently, and rather grudgingly, I began to try to understand his business space in some greater detail. After all, as the famed ‘social Darwinist’ Herbert Spencer said, “There is a principle which is a bar against all information, which is proof against all argument, and which cannot fail to keep a man in everlasting ignorance. This principle is contempt prior to examination.” What I found astounded me—and has silenced my whining.

Vikram belongs to what is called “Generation Z”. This is the generation that was “born digital”. For them, social media and the smart phone are no different than air and water are to the rest of us, or in other words, a natural part of the environment.

Technology, in particular the rapid evolution of how people communicate and interact, is a generation-shaping consideration. For us in India, wide-spread use of television and the personal computer is recent, and many of us grew up without either of these. The internet, smartphones and social media came much after.

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According to The Pew Research Center, ( in this progression, what is unique for Generation Z is that all of the above have been part of their lives from the start. The iPhone and other Android-based smart phones launched in 2007, when the oldest Gen-Z-ers were 10. Social media, constant connectivity, and on-demand entertainment and communication are innovations that earlier generations adapted to as they came of age. For those born after 1996, these are largely assumed.

The implications of growing up in an ‘always on’ technological environment are only now coming into focus. Recent research has shown dramatic shifts in the youth’s behaviors, attitudes and lifestyles—both positive and concerning—for those who came of age in this era. What we don’t know is whether these are lasting generational imprints or characteristics of youth that will become more muted over the course of adulthood.

There are so many positive nuances to an ‘always on’ technological environment that are very difficult for a frumpy Indian parent to understand. The light bulb went on when I decided to spend some time researching and understanding the specific area my son was focused on. His business is focused on ‘social commerce’, an area that I was only vaguely aware of. To my luck, a friend recently sent over a Citi Group ( corporate research report on new technologies, and social commerce was one of them. I delved in, and here is what I learned.

While it only constitutes a small percentage of US e-commerce today, social commerce—wherein brands and products can leverage the scale of social networks to directly target specific users—can significantly alter the broader e-commerce experience in the future. Currently, most product searches occur either on Amazon (where consumers begin their product searches) or on Google.

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Social commerce changes this paradigm, as the e-commerce experience evolves from primarily users searching for products on search and e-commerce sites to social platforms suggesting products based on users’ interests, actions, and followed influencers—who users increasingly view as a key part of their social networks as well as trusted brand ambassadors. Ultimately, the social commerce experience will be a more natural way to shop that better emulates the more traditional retail experience as merchandising improves online. And as virtual dressing room try-ons are now possible as augmented reality (AR) and virtual reality (VR) technology improve, the bottom line with social commerce is greater discovery, increased conversion rates, and improved satisfaction among users.

In Citi’s view, the benefits of social networks are the scale and engagement across billions of users the platforms provide, as well as the potential opportunities from the integration of newer technology like AR and VR. This makes sense, since platforms like Meta claim to have over 3.65 billion users across its platform. On Instagram (one of Meta’s properties) alone, 84% of users want to discover new products or services, and as a result, brands and products are increasingly testing these social networks as an incremental eCommerce channel. And per eMarketer, 35% of US social buyers reported their social commerce purchase was an impulse purchase and that they were unaware of the product or service before, which highlights the power of discovery. Meanwhile, more brands and retailers are also adopting social tools.

According to Citi’s report, social commerce appears to be more commonplace in China, with social buyers representing just under 50% of internet users compared to around 40% in the US, per eMarketer. The net impact is that the social commerce market in China represents 15.9% of the country’s total 2022 retail e-commerce sales, with around 467 million social buyers versus 5% projected penetration in the U.S. in 2022. This number will only grow simultaneously in both the US and in India.

My son’s platform is a tool that directly appeals to brand influencers as well as brands. It allows influencer throughput to brands to be technologically seamless as well as the other way around. Watchers and followers of influencers can link to the platform and instantly discover and covert to buying and paying for the product. A powerful tool such as this will only add to social commerce penetration, and if it is slick enough, can become a game changer. I wish him luck.

The writer is technology consultant and venture capitalist

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First published on: 20-12-2022 at 04:15 IST