Merchants of Social – Social Commerce Market Report
The report, authored by industry analyst Neha Khera, can be accessed on their website, but here’s a summary.
“Overall, the social commerce market, while yet to provide significant measurable returns, is undoubtedly poised for growth, since all the players in its value chain are aligned. Consumers are drawn to social applications that make their commerce activity more informed and engaging. Retailers are realizing the enormous upside of social recommendations in promoting their products. Entrepreneurs are innovating rapidly to develop unique experiences that combine “social” with shopping. And investors are betting on this market as being the next big thing―when an Amazon finally meets a Facebook”.
Social commerce is about collaborative shopping experiences that result from the fusion of e-commerce (a $7 trillion market) and social networking technology (adopted by 20% of the planet)
More formally, social commerce involves the use of social networks―whether it be interactions amongst friends or strangers―to drive commerce, including the exchange of money, knowledge, goods or services
In plain English social commerce is aboutmeshing shopping with socializing helping people socialize where they shop, or shop where they socialize – it is about integrating a social experience into the buying process
Social commerce is a $1bn market (US), currently representing just 0.5% of the overall $200bn US e-commerce market, which in turn represents just 7% of the total commerce (consumer) market (US figures)
The social commerce market is expected to grow to $15bn by 2015. VC firm Greylock Partners, believes social commerce has the potential to transform what was a previously stagnant e-commerce market saddled with high customer-acquisition costs, low customer retention, and cash-consuming business models. The potential for social commerce is to create addictive and compelling experiences created whilst reducing customer-acquisition costs via word-of-mouth
The value proposition of social commerce for consumers is that it offers a more personalized, informative and engaging shopping experience.
The value proposition of social commerce for retailers is that by integrating social media into the buying process they can drive sales either online or in-store.