The shopping revolution on social platforms is underway
The intersection of two flourishing industries, e-commerce and fintech, gave birth to the experience of social commerce. Galia Beer-Gabel, Vice President of Business Development and Operations at Team8, identified the shift of consumers from Amazon, Walmart and eBay to Facebook, Tik-Tok and Google
The fintech industry has also exceeded growth forecasts due to the change in consumer behavior brought on by the pandemic and the concomitant increase in online payments. Pre-pandemic innovation in payment processes, especially in clearing and settlement, fraud prevention and improving user experience, has accelerated dramatically due to COVID. But now, e-commerce players offer a full range of financial services to their customers. For example, Shopify, a leading platform for online businesses, generates a significant portion of its revenue from financial products, including clearing and credit services.
It was natural for social media companies to join the party. Until recently, their e-commerce business was mostly limited to posting sponsored ads by sellers. However, there is much more potential for closer collaboration between e-commerce companies and social media platforms.
Introduction of social commerce: the integration of online shopping in the daily experience of users on social networks. Social platforms have identified the incorporation of e-commerce tools into their offering as a way to improve their value proposition to consumers. Platforms benefit greatly from acquiring valuable consumer data while keeping users engaged in their ecosystem. Sellers, on the other hand, can take advantage of the ability of social media platforms to personalize the user experience, resulting in higher conversion rates. Increased user demand by consumers has further prompted social platforms to prioritize payment and purchase options.
Social commerce also stimulates competition between platforms. Instagram, Tik-Tok, and Pinterest are just a few of the players who have announced new e-commerce solutions, but they all have the same goal in mind: attracting new sellers. Whereas previously social platforms focused on improving their value proposition for consumers, sellers are now firmly in the driver’s seat. Platforms that welcome sellers and adapt to their needs, particularly in terms of marketing, technology, payment and logistics, are able to substantially differentiate their offer. In a world where consumer loyalty to networks is declining, the ability of social media companies to deliver a personalized experience, along with a wider range of relevant tools, is essential to keeping buyers on their platform.
We have seen this trend gain serious momentum over the past year. Facebook, for example, introduced Facebook Shops, a collaboration with Shopify that allows the 1.7 million sellers on the Shopify platform to sell directly on Facebook, eliminating the need for the seller to open a dedicated store on Facebook. . TikTok, meanwhile, launched TikTok Shopping, a solution that allows Shopify sellers with a TikTok account to display their catalog directly on the app. TikTok went the extra mile by announcing that sellers can let the platform handle logistics and supply chain activity for them.
Google hasn’t been idle either. It manages billions of daily searches for consumer goods from three billion Android devices around the world. Additionally, Google has done a great job leveraging its search engine to facilitate digital commerce. For example, it displays products from various stores directly on search results pages, creating a convenient shortcut for consumers. Along with the announcement of partnerships with GoDaddy, WooCommerce, Shopify and Square, the industry giant has also removed Google Shopping listing fees to attract more sellers.
The playing field of e-commerce is changing, and the market share of traditional players like Amazon and Walmart is at stake. The inherent link between fintech and e-commerce has motivated the big players to enter the market. shopping arena and as social commerce gains popularity, technology companies and social media platforms will continue to offer new e-commerce services, while new startups emerge to seize new market opportunities. A shopping revolution is well underway.
Galia Beer-Gabel is Vice President of Business Development and Operations at Team8