Revenue will reach 3 trillion US dollars, social e-commerce may pose a threat to Amazon!

In recent years, social e-commerce has become increasingly well-known and has developed rapidly .   Invest speculates that in the next five years, the revenue that social platforms earn through e-commerce will grow at a compound annual growth rate of 50% , from about $390 billion to nearly $3 trillion. The rapid development of social e-commerce will have a huge impact on traditional e-commerce platforms such as Amazon.

With the development of traditional e-commerce platforms and fierce competition among sellers, the traffic dividend is disappearing and the cost of attracting customers is getting higher and higher. If sellers want to gain exposure, they have to post advertisements on or off the site, which brings high promotion fees, and the conversion rate of off-site advertisements is not necessarily high.

On the contrary, what social platforms lack the least is traffic. According to a survey by Sensor Tower, the global downloads of social platforms such as TikTok, Facebook, and Instagram have exceeded 3 billion times.

In addition to high traffic, social platforms also bring consumers and retailers closer together. On social platforms, advertising is combined with information flow. In this way, users will be more willing to accept the existence of advertising.

According to eMarket, the trend of Americans shopping directly on social platforms increased between the fourth quarter of 2018 and the third quarter of 2020. By the third quarter of last year, the proportion of people shopping directly on social platforms had reached 25%. In addition, Shopify mentioned in its 2021 Future of Commerce report that 54% of young consumers worldwide discover brands through social media.

As more and more people are keen on shopping on social platforms, the shopping functions of social media are becoming increasingly rich. The most discussed recently is the cooperation between TikTok and Shopify. TikTok users can directly jump to the Shopify independent website in the video, which greatly alleviates the pain point of low conversion rate of off-site advertising.

In addition, social platforms are also developing their own stores. Currently, TikTok has opened small stores in Indonesia and the UK. Social media such as Facebook and Instagram have also set up store sections. In Instagram stores, users can pay directly through Facebook Pay.

It can be said that the advantages that Amazon is proud of, such as one-click checkout and fast delivery, have become weak as social platforms and independent sites have entered the market.

Social e-commerce

Amazon