AGL 5.50 Decreased By ▼ -0.10 (-1.79%)
ANL 8.62 Decreased By ▼ -0.28 (-3.15%)
AVN 75.84 Decreased By ▼ -1.14 (-1.48%)
BOP 5.18 Decreased By ▼ -0.07 (-1.33%)
CNERGY 4.51 Decreased By ▼ -0.14 (-3.01%)
EFERT 81.09 Decreased By ▼ -0.13 (-0.16%)
EPCL 49.94 Decreased By ▼ -0.09 (-0.18%)
FCCL 12.51 Decreased By ▼ -0.65 (-4.94%)
FFL 5.52 Decreased By ▼ -0.18 (-3.16%)
FLYNG 6.87 Decreased By ▼ -0.23 (-3.24%)
FNEL 4.63 Decreased By ▼ -0.13 (-2.73%)
GGGL 8.53 Decreased By ▼ -0.27 (-3.07%)
GGL 14.22 Decreased By ▼ -0.38 (-2.6%)
HUMNL 5.58 Decreased By ▼ -0.09 (-1.59%)
KEL 2.62 Decreased By ▼ -0.01 (-0.38%)
LOTCHEM 27.98 Decreased By ▼ -0.67 (-2.34%)
MLCF 23.68 Decreased By ▼ -1.01 (-4.09%)
OGDC 71.64 Decreased By ▼ -0.87 (-1.2%)
PAEL 15.33 Decreased By ▼ -0.04 (-0.26%)
PIBTL 4.87 Decreased By ▼ -0.11 (-2.21%)
PRL 15.80 Decreased By ▼ -0.40 (-2.47%)
SILK 1.04 Decreased By ▼ -0.03 (-2.8%)
TELE 8.92 Decreased By ▼ -0.28 (-3.04%)
TPL 7.04 Decreased By ▼ -0.21 (-2.9%)
TPLP 18.31 Decreased By ▼ -0.39 (-2.09%)
TREET 21.03 Decreased By ▼ -0.67 (-3.09%)
TRG 134.51 Decreased By ▼ -2.04 (-1.49%)
UNITY 16.57 Decreased By ▼ -0.45 (-2.64%)
WAVES 9.34 Decreased By ▼ -0.55 (-5.56%)
WTL 1.36 Decreased By ▼ -0.05 (-3.55%)
BR100 4,155 Decreased By -70.3 (-1.66%)
BR30 15,289 Decreased By -229.2 (-1.48%)
KSE100 41,613 Decreased By -537.4 (-1.28%)
KSE30 15,360 Decreased By -228.1 (-1.46%)
Technology

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

  • The success of social commerce stems in part from product targeting based on user interests, with sales generating more data that can be used for future advertising and merchandise placements
Published July 29, 2021
Follow us

Led by Facebook, 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 vying for a piece of the so-called social commerce industry, which relies on users' ability to discover and buy products through social media apps and is expected to balloon to $50 billion from $36 billion in annual sales by 2023 in the United States according to research firm eMarketer.

The success of social commerce stems in part from product targeting based on user interests, with sales generating more data that can be used for future advertising and merchandise placements.

Facebook, widely considered the leader in social commerce, and Google helped retailers bring in sales in the last quarter, with ecommerce player Shopify saying the growth rate of products sold through the two tech companies' platforms was "several times that" of websites run by the merchants themselves.

Facebook says $1bn to be spent boosting creators

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."

Retailers are increasingly hopping on to the trend as COVID-19 restrictions weigh on brick-and-mortar sales.

Brands ranging from luxury fashion house Burberry to fast fashion giant H&M have signed up celebrities and influencers to get millions of their followers to make purchases off ephemeral stories or posts by asking them to "swipe up to purchase".

Weibo chairman and state firm plan to take China's Twitter private

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 scramble for user data has become even more crucial as recent privacy changes from Apple Inc limit tech companies' ability to track iPhone users and serve personalized advertising, ad experts have said.

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 Edward Jones analyst Dave Heger. "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."

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

YouTube wins user copyright fight in top EU court ruling

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.

"The holy grail of advertising is to actually sell merchandise," said Rich Greenfield, a partner at LightShed Partners, in a note on Snap last week.

"While these initiatives are still in the early stages, we believe an increasing number of brands want to be associated with where commerce is headed."

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.

Comments

Comments are closed.

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

Stocks fall on noisy IMF humdrum

KP asks Wapda to pay Rs21bn

Afghan suppliers: Coal importers making ‘informal’ payments

Govt debt stocks hit historic high of Rs50.152trn

Petrol, diesel and LNG at discounted rates: Russian ministers due next month

Revolving fund account for CPEC IPPs approved: ECC allows import of 0.583MTs of wheat

Payables/receivables: Govt offered to seek resolution of dispute thru ICA, KE CEO tells Senate panel

Auditors’ appointment: SECP decides to take risk-based approach

New estimates place flood losses at $46bn

Afghanistan arrests ‘foreign IS member’ for embassy attack