Social commerce, abbreviated as s-commerce, is the process of buying and selling products and services directly through social media platforms such as Facebook, WhatsApp, Instagram, Pinterest or Twitter.
It refers to e-commerce transactions where buyers and sellers have a more direct connection with each other before concluding a purchase, compared to traditional e-commerce where buyers choose by searching or browsing from a digital catalogue.
Furthermore, the social commerce model supports social interaction and user contributions and reduces the cost of overheads, operations and marketing while increasing reach and sales through the reseller network.
It signifies the convergence of social networks and e-commerce to drive online sales. This new paradigm of e-business utilizes online communities, user ratings, referrals and social advertising to facilitate online shopping.
How did the concept of social commerce come up?
In November 2005, Yahoo introduced the social commerce concept that describes a set of online collaborative shopping tools, which attracts consumers and increases the customer's trust in retailers.
For instance, people come across a variety of products on their Instagram feed, and they select the “shop now” tab to complete the purchase right there in the app. This process encourages users to conclude the entire buying process without leaving the preferred apps.
S-commerce helps companies engage people with their brands according to the consumers' social behaviours. This model offers an incentive for customers to return to their website. It provides customers with a platform to talk about their brand on the website.
Examples of social ecommerce
E-commerce firms like Amazon and e-Bay allow consumer networking and interaction by enabling their portals with social elements such as likes, reviews, referrals, facilities to create and share purchase information, wishlists, etc.
On the other hand, leading social networking sites such as Facebook, Pinterest and Instagram are augmenting their potential to drive up commercial transactions: from online retailers launching their social media pages to the feature of ‘direct buying’ (e.g., ‘shop now’ in Facebook and ‘buy’ pins in Pinterest) of products from social media platforms.
An Indian-origin social commerce platform Meesho enables small businesses and individuals to start their online stores via social media channels.