From Facebook to Twitter, Big Tech sees social commerce driving sales growth

From Facebook to Twitter, Big Tech sees social commerce driving sales growth

Facebook introduced their Live feature a while back which has led to small businesses jumping at the opportunity to sell directly to consumers. Social media platforms from Alphabet's YouTube to Snap Inc and Twitter are investing heavily in shopping features to drive revenue growth, a major theme that emerged during second-quarter results over the past week.

The companies are seeing a huge growth in social commerce industry, which relies on users' ability to discover and buy products through social media apps and is expected to balloon to US$50 billion from US$36 billion in annual sales by 2023 in the United States according to research firm eMarketer.

As sellers are selling directly to their fans and followers based on user interests, sales are generating more data that can be used for future advertising and merchandise placements.

Facebook CEO Mark Zuckerberg said that enabling commerce and making it easier for businesses to communicate with customers through its Messenger and WhatsApp apps was "the right long-term bet." 

Antas Solutions is working with GetMe Trading Sdn Bhd to extend the ability for Malaysian shoppers to check out directly from Live selling sessions without having to leave Facebook merely by asking customers to use specific product codes to confirm their orders via Facebook Messenger.

Smart retailers are increasingly hopping on to the trend as Covid-19 restrictions weigh on brick-and-mortar sales.

Electrical stores and supermarkets such as Carrefour are integrating Live shows within their ecommerce website to further engage with their customers.

While the business is small for now, the social media giants are eyeing the data generated from users' shopping and browsing habits for targeted advertising.

The future of commerce?
Facebook launched Shops in May 2020 during the height of the pandemic, luring brands with an easy way to sell items directly through Facebook and Instagram and consumers with a curated and personalized way to discover trendy clothes or home goods.

Facebook was the top social commerce platform according to a survey conducted by eMarketer in June 2020, with 18% of respondents saying they had purchased a product via Facebook. That compared with 11% for Facebook-owned Instagram and 3% for Pinterest.

Even as restrictions lift, analysts say the demand for shopping online is unlikely to retreat.

"People have gotten accustomed to buying online," said Hanniz Lam of Antas Solutions shares. "I don't think that they're going to go completely back to the level they were at before in terms of purchasing at brick and mortar stores. Malls should take the step to offer this live shopping solution to their tenants who continue to pay rent despite lockdowns."

Snap Inc is investing in augmented reality technology designed to help users virtually try on items like watches, jewelry and other apparel to cut down on returns, a major problem faced by online retailers.

Snapchat users can take a photo of a friend's outfit with the app and find similar looks or product recommendations, Snap Chief Executive Evan Spiegel said last week during the company's earnings conference call.

Popular short-form video app TikTok is testing live-streamed shopping with select brands in the UK, allowing viewers purchase clothes as an influencer models the item in real time during a live video.

Twitter, a platform most known for following breaking news or current events, said on Wednesday that it will begin testing a shopping feature that lets users browse items for sale at the top of a brand's profile page.

Streaming video site YouTube, known for "unboxing" videos in which YouTubers review toys or tech gadgets, wants to integrate shopping directly into the platform, said Google Chief Business Officer Philipp Schindler on Alphabet's earnings call on Tuesday.

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