Everything You Need To Know About Social Commerce

by Dennis Velasco | 2021-02-03 01:10:14 | eCommerce

Social Commerce has been around for a while, especially as the adoption of social media continues to fuel its growth.

However, it wasn’t until the COVID-19 outbreak that opportunities for this industry presented themselves.

The expected market size of USD 3.3 billion (PHP 158 billion) by 2028, to be exact.

That’s a LOT of zeroes!

While 70% of this market focuses on India and China, what does this mean for the reigning social media capital of the world, the Philippines?

Everything You Need To Know About Social Commerce-01


As far as eCommerce goes, traces of social commerce first appeared in Yahoo! back in 2005.

While the search engine wasn’t considered social media as we know it, they did start featuring the most popular products on the Internet through their “Shoposphere Pick Lists” as a marketing campaign.

Recently, social commerce is making rounds in the business news as China has produced another successful interactive eCommerce platform known as PinDuoDuo.

The company grew exponentially in 2019, with 731 million active buyers as of September 2020, despite being just a startup.

Since the numbers are big on data, Facebook and Instagram recreated this in the form of Shops, to join in the revolution.

However, these business features are seen in Western social media as confusing since consumers continue to view social media primarily as a creative outlet rather than a commercial one.

Everything You Need To Know About Social Commerce-02


To put it simply, it’s about buying and selling items and services on social media networks.

But if we dive deeper, that refers to social selling, where brands and companies create enticing posts to market their products.

Social selling campaigns are measured not by sales but through social interactions and engagements, such as likes, shares, and reposts.

In turn, potential customers will want to visit their online store or website to complete the purchase.

This concept shouldn’t be confused with social shopping, which is defined by Investopedia as a collaboration of online shoppers networking together.

Most Philippine SMEs and Filipino consumers are more engaged in this form of transaction.

On the other hand, social commerce as a concept today refers to something else entirely.

Going back to PinDuoDuo as an example, they have a direct-to-consumer business model where buyers and sellers get together on their social platform to make purchases.

The significant difference between this form of social commerce and social selling is that customers can shop directly via the channel or platform, without having to be redirected anywhere else.

Here’s an interesting video by Nielsen Norman Group illustrating the difference between the two.

Everything You Need To Know About Social Commerce-03


As most people probably think, social selling uses platforms like Facebook and Instagram to establish company branding and build a customer base.

Similar to what big companies or influencers with high-follower counts are doing to drive sales through promotions and advertisements.

To name a few practices in social selling, they include:

  • Chats for product inquiries
  • Buy-and-sell forums and groups
  • Listing products on Marketplaces
  • Viewing content with shoppable advertisements

It’s so important to understand this definition because when we compare this to how social commerce works, the tables are turned.

Social Commerce is demand and consumer-driven, which means the customer has the power over what they would like to purchase and when, through the same social media channel.

The process has become streamlined because of checkouts via chatbots, autofill payments, and even order fulfillment.

While eCommerce is already easy compared to traditional shopping, social commerce reduces the clicks and taps even further to make it simple.

Everything You Need To Know About Social Commerce-05

In an example by Buffer, here’s how it compares:

  • If you have a website and store, let’s say you get 10,000 visitors to the site
  • Of that group, 25% give you their email address
  • When you send that group an email, 25% of them open it.
  • Then, 5% of those who open the email click on the link in the email.
  • And three percent of those clicks end up buying something.
  • That’s a total of 1 purchase, after starting with 10,000 visitors.
  • Start with 10,000 chatbot visitors.
  • Of that group, you can message 99% of them.
  • Open rates are quite high for chatbots, around 75%.
  • So from the group that sees your message and opens it, let’s say that 48% of them click through.
  • And then 1% purchase something.
  • That’s a total of 35 purchases, compared to the one (1) purchase in the website example.
  • For businesses, they don’t need to invest in fancy advertising or influencer marketing to make a sale, removing the dependence on popularity to become successful.

    Everything You Need To Know About Social Commerce-04


    To understand whether this is something worth paying attention to or not, we need to take a look at its business benefits and potential impact on the market.

    Here are some examples:

    • Shopping becomes a social activity for consumers
    • Reduce barriers and friction in the purchasing process
    • More ways for businesses to make money online
    • Collect direct feedback from customers on what works and what doesn’t
    • Future-proof for the techie-generation (Millennials and Gen-Zs)
    • Target your audience using their social activity

    If you already understand what this means for Filipinos who spend most of their time browsing on social media, think of the effects it will have on businesses leveraging this system.

    Now, this doesn’t mean that you should drop everything that you’re already doing online and focus on just social commerce, but it is something you should consider experimenting with if it works for your setup and target customers.


    If you must know, things will only go up for social commerce from here, according to the trends.

    Remember the time when social media was just text-based, then moved to include images, and then games? Well, shopping is next on the list!

    While we would love to share more about social commerce, here’s an overview of everything we shared so far:


    At Prosperna, we believe in the power of eCommerce technology to help Philippine SMEs grow their businesses and become successful.

    Don’t forget to stay tuned to our blogs by subscribing to our email newsletter.

    You can also book a FREE DEMO to ride the eCommerce wave today!


    Access our eCommerce Secrets for FREE!

    Subscribe NOW to learn new skills on marketing and read helpful insights to sell more on your online store.

    * indicates required

    Dennis Velasco

    Technology Evangelist super passionate about helping the industries of eCommerce, SMEs and real estate in the Philippines reach new levels of success.

    Submit a Comment