2015 is set to be the year when social commerce explodes, unlocking huge opportunities for start-ups with expertise in the space. With the likes of Facebook and Twitter moving into the s-commerce space en masse, these digital giants will certainly be looking to business transfer agents to make acquisitions that enable this expansion. For example, in the London corporate finance space, Japan’s e-commerce major Rakuten has already acquired virtual clothes viewer start-up Fits.me in early 2015, as it plans for a social media presence.
In June 2015, we’ve seen a flurry of announcements from Western social media giants regarding new ways to buy products on their platforms. Because fashion is inherently visual, shareable and has one of the highest penetration rates of online sales, it is important for those in the industry to keep an eye on these developments.
The appeal of s-commerce is clear – there are over two billion social media users worldwide today, providing an enormous database that can be monetized through e-commerce, which itself is a surging global market growing by an average of 19% in real terms every year.
S-commerce announcements in June 2015:
– Facebook: Announced that it expanded its beta test Buy Button with Shopify merchants in June 2015, which allows customers to buy products they see in their news feed from promoted posts or from Shopify’s merchant pages.
– Instagram: Added a Shop Now button to ads on the service. Launched in June.
– Pinterest: Launched Buy It button in June 2015 but only on mobile devices. Does not expect to take a cut of the sale, but hopes the buy button encourages more ad revenue. Buy promoted pins with buyable items within them. The site is partnering with big-name retailers including Macy’s, Nordstrom and Nieman Marcus, and relative unknowns like SOBU and Madesmith.
– Twitter: Buy Now products within Tweets continued to be rolled out and the launch of product and collection pages announced in June as well.
Messaging apps also moving into s-commerce space
Messaging apps such as WhatsApp, WeChat, Viber and Snapchat have unlocked a huge new audience by taking advantage of rapidly expanding global mobile Internet penetration, which reached around a third of all mobile subscriptions last year.
WhatsApp already has over 800 million users and is set to overtake its parent company Facebook in reach within a year or so. There are believed to be close to 3 billion mobile instant messaging users worldwide.
These IM players are increasingly moving into all areas of mobile commerce, from payments to social media, to e-commerce. More streamlined than social media platforms, they have instant access to users as they’re tied to mobile phone numbers rather than just user names. As such, IM accounts are potentially more valuable as a marketing and outreach tool than a social media profile.
And investors are certainly seeing the potential. China’s e-commerce giant Alibaba, for example, plans to invest $200 million into US IM service Snapchat, largely based on its potential to monetise s-commerce services.
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