TikTok leads the way! The global social e-commerce market is about to exceed one trillion US dollars

TikTok leads the way! The global social e-commerce market is about to exceed one trillion US dollars

Wearing a glittering dress, a Santa hat, and her signature pink hair, standing in front of her phone, American celebrity hairstylist Potempa started another day of TikTok live streaming.

According to Potempa, her live broadcasts mainly focus on packaging orders for her popular product Beachwaver curling iron, and each session lasts six to eight hours. Since her live broadcast on TikTok, she has completed 1.2 million orders.

Potempa is just a microcosm. Now more and more brands and sellers have noticed the potential of social e-commerce and TikTok Shop.

On Black Friday, TikTok’s US GMV reached $100 million

This year's Black Friday was called "the biggest Black Friday in history" by TikTok and broke many platform records.

Among them, the payment GMV in the US this year exploded by 176%, more than three times the Black Friday promotion last year, and the sales on Black Friday exceeded 100 million US dollars, both of which set a record high. In addition, during the Black Friday weekend, the number of consumers in the US exploded by 265%; the GMV of short videos sold by merchants themselves exploded by 136%, exceeding one million US dollars per day.

Many brands such as Aosom, Halar, Canvas Bsauty, Sweet furniture, and Pop Mart also benefited from it. Take the beauty brand Canvas Bsauty as an example. Its founder Stormi Steele brought in $2 million worth of goods in a single live broadcast, once again breaking the record for single live broadcast sales in the US.

It is worth mentioning that the record of live streaming sales in the US has been broken frequently this year: In June, TikTok US influencer @iamstormisteele achieved the first TikTok US live streaming sales of over one million US dollars with a single live streaming sales of 1.02 million US dollars; in early July, TikTok US influencer @simplymandys broke the record again, creating sales of 1.21 million US dollars in a single live streaming. The potential of live streaming sales in the US is beginning to emerge.

The potential of TikTok and social e-commerce has also attracted many sellers from other platforms, including Pacsun , a top-selling American fashion brand in Amazon’s fashion category .

In late July this year, Pacsun had already set a record of a single-week live broadcast GMV of over one million US dollars, and ranked first on both the TikTok small store list and the TikTok women's clothing store live broadcast list. In August this year, the brand held an 8-hour and 4-minute live broadcast called "Pacsun Super Sale", during which three anchors introduced a total of 100 products, with cumulative sales reaching US$93,100 and a total live broadcast viewing of 208,600.

At the same time, the potential of TikTok's e-commerce is also optimistic about the analysis agencies. According to market research firm ecommerceDB, in the 15 months since its launch, TikTok Shop has become a "large e-commerce machine."

EcommerceDB predicts that TikTok Shop's total merchandise volume is expected to more than double to $50 billion this year. NBC, an authoritative American media, believes that although this GMV is far less than Amazon's $757 billion, TikTok Shop is making great progress.

The scale of global social e-commerce is about to exceed 1 trillion

As the platform is "running wildly", TikTok's US region has frequently seen hot products with weekly sales of thousands and monthly sales of tens of thousands this year. For example, the sales of three Bluetooth translation headphones from MINISO reached 170,400, 116,100, and 69,100 in two weeks respectively; the sales of Scent Szn Co car fragrance diffuser reached 77,000 units in three days; the sales of Sweet Furniture tower heater reached 6,200 units in a single day...

Upon closer inspection, we will find that the hot sales of these small shops and products are inseparable from the help of expert videos and live broadcasts, which shows the potential of social e-commerce.

According to data from Statista, the global social e-commerce market is expected to reach $688 billion this year, a year-on-year increase of 20%, and will exceed $1 trillion in 2028. Among them, the social e-commerce market in North America ranks second in the world and Europe ranks third in the world, with revenues expected to reach $148 billion and $48.3 billion respectively in 2028.

(Image source: Stocklytics )

The share of social e-commerce in the global e-commerce market is also increasing year by year. In 2018, social e-commerce accounted for only 5.5% of the global e-commerce market, but this year it has reached 19.4%, and this figure will reach 21.7% in 2028.

In addition, the user group of social e-commerce is also showing an expanding trend. In 2023, 1.387 billion Internet users worldwide will complete at least one shopping through social media platforms, an increase of 100 million people from 2022; this group will expand to 1.44 billion by the end of this year, and will increase by another 300 million in the next four years.

The results of a survey released by Chime last month also showed that American consumers spend an average of three hours a day browsing products on social media, and 99% of consumers said that these browsing experiences may prompt them to make an eventual purchase.

Facebook Marketplace and TikTok Shop are the social e-commerce platforms they use most often. Facebook Marketplace attracts more consumers who are looking for second-hand, practical and affordable products, while TikTok Shop attracts more young users who prefer fashion.

Janelle Sallenave, Chime's chief consumer officer, pointed out that TikTok combines shopping and content creation, making it easy for users to quickly discover and purchase new products. This format also drives sales of fashion and accessories. In the six months before the survey was released, American consumers spent an average of $168 on social media, with clothing (46%) and fashion accessories (30%) being the most popular categories.

Many e-commerce platforms are focusing on social e-commerce

With TikTok's example, many e-commerce platforms have also begun to focus on this field.

Earlier this year, Amazon launched the Consult-a-Friend feature. Through this feature, consumers can view and reply to their friends' comments on a certain product. If the consumer is interested in the product, they can jump directly to the product details page by clicking on the link. Amazon believes that the opinions of friends and family are of great reference value to users; the launch of the "Consult-a-Friend" feature is out of the actual needs of platform users.

In August, Amazon announced a partnership with TikTok. After users complete the linkage between their TikTok account and Amazon account, they can directly see Amazon product advertisements on TikTok’s recommendation page and purchase the Amazon products they see directly within TikTok.

In addition to Amazon, other e-commerce giants are not far behind. In the Russian market, Ozon has reached an in-depth cooperation with VKontakte, the country's largest social media, allowing VKontakte users to seamlessly browse and purchase products on Ozon within the platform without interrupting the news or videos they are browsing.

YouTube has also reached cooperation with e-commerce platforms Flipkart, Myntra and Cafe24 in the Indian and Korean markets respectively. In India, YouTube introduced its shopping alliance program YouTube Shopping through cooperation with Flipkart and Myntra; in South Korea, YouTube and Korean e-commerce platform Cafe24 jointly developed and operated the world's first "YouTube Shopping Store", and Cafe24's average daily user number also increased from 50,000 to 80,000 to 90,000, and the purchase conversion rate of some channels even exceeded 10%.

Flip , also a social e-commerce platform, has also acquired the online platform Curated to further develop the social e-commerce track. It is reported that Flip was founded in 2019. Its application is similar to TikTok's short video format, allowing users to order products while watching videos. At present, the number of downloads of Flip applications has exceeded 5 million, and the number of website brands has exceeded 5,000. The acquisition of Curated will also help accelerate its strategy of reshaping e-commerce.

In today's global e-commerce market, social e-commerce has become a force that cannot be ignored. Sellers need to keep up with this trend and adjust their business strategies in a timely manner in order to stand out in the fierce market competition and achieve dual growth in brand and sales.

TikTok

Social e-commerce

Trillion USD