What is social commerce?

Social commerce involves using social media platforms to facilitate and promote the buying and selling of products and services. It combines elements of social media interaction (such as sharing, liking, commenting, and user-generated content) with the convenience of e-commerce; this allows users to discover and purchase products directly within social media platforms.

Social commerce vs e-commerce

While social commerce and traditional e-commerce both allow items to be bought and sold online, they differ in several ways. Social commerce integrates social media and peer interaction into the shopping experience, while traditional e-commerce relies on standalone websites or marketplaces for transactions.

Social commerce enables deeper interaction between brands and consumers. Platforms like Instagram, TikTok, and Facebook allow customers to engage with content by liking, commenting, sharing, and following brands. This level of engagement fosters a more emotional connection with brands, encouraging consumers to stay involved for longer periods.

Additionally, social commerce enables engagement with customers in real-time. Whether through live chats, direct messaging, or live-stream shopping events, brands can respond instantly to inquiries, providing immediate feedback or solutions. Some platforms even offer live shopping experiences, answering questions and engaging with viewers on the spot. Plus, real-time interaction ensures customer concerns or hesitations are addressed quickly, reducing friction and improving the overall shopping experience.

Then we come to one of the most influential factors in social commerce: Social proof. When customers see others, particularly influencers or peers, endorsing or using products, it builds trust. User-generated content, reviews, and influencer endorsements act as testimonials, validating the quality and desirability of products. This form of peer validation can be a powerful driver of conversions.

Key platforms

Different platforms offer different social commerce-related features. For instance, Facebook has a Marketplace and Shop section for businesses, while Instagram offers product tags and the Instagram Shop, where users can browse and buy products directly. Pinterest utilises its visual interface by offering ‘Buyable pins,’ which users can purchase directly, whereas TikTok allows creators to showcase products via short-form video content and link directly to online stores. YouTube has recently joined the party, introducing YouTube Shopping, which already has over 250,000 creators on board.

Similarly, integrating e-commerce with social media platforms is crucial for businesses aiming to reach and engage consumers more effectively. After all, social media platforms offer unparalleled access to vast, highly segmented audiences who spend significant time engaging with content. By embedding e-commerce functionalities directly into these platforms, businesses can meet consumers on channels they’ve already signed up for, making the shopping experience more seamless and intuitive.

The main idea behind switching to 8-digit bank identification numbers is to get more BINs for new issuers and products. In essence, it creates a situation where the 6-digit BIN assigned to the specific issuer is decommissioned, subdivided into an 8-digit BIN, and then split up across other issuers with the new card products assigned. For a more illustrative The early stages of social commerce saw brands utilising social media platforms for product discovery and brand awareness. Initially, platforms like Facebook, Instagram, and Pinterest were mainly used for communication and content sharing. However, businesses quickly realised these channels were ideal for reaching a broader audience in more organic and engaging ways.

Brands used influencer marketing, organic posts, and targeted ads to showcase their products and build relationships with potential customers. Social media became a place where users could discover new brands based on their interests, interactions, and the influencers they followed - marking the beginning of social commerce. explanation, please consider the scheme below:

The rise of integrated shopping

As social media evolved, integrated shopping features emerged, enabling platforms to function as e-commerce hubs. Facebook Marketplace, launched in 2016, allowed users to buy and sell products directly through the app, turning Facebook into a peer-to-peer selling platform. This was followed by Instagram Shopping, which introduced shoppable posts and stories, allowing users to click on tagged products and purchase directly without leaving the app. This transformed Instagram into a seamless shopping experience, especially for visually appealing brands. Later, TikTok Shopping joined the trend, blending entertainment with commerce. With TikTok, product recommendations and "viral" trends became a powerful driver for sales – users could see products in action before purchasing through integrated links.

Social commerce’s rapid rise can be attributed largely to Gen Z and Millennials, who are digital natives with a strong preference for online shopping. These groups value convenience, authenticity, and social proof when making purchasing decisions. Social media platforms, upon which they spend a significant amount of time, offer the perfect blend of entertainment and commerce. Their interactive and visually rich environments cater to the desire for engaging and personalised shopping experiences, further driving the growth of integrated shopping across social media.

The growth of the global social commerce market is driven by increased consumer use of social platforms for purchasing. In 2024, the social commerce market in the UK alone is projected to grow by 26.6%, reaching $31.27 billion. By 2029, this figure is projected to soar to $83.27 billion. Younger generations, particularly Gen Z and Millennials, are the primary drivers of this expansion, making frequent purchases through platforms like TikTok, Instagram, and Facebook. As social media integrates more shopping features, the market is poised for continued expansion.

Brands that have successfully leveraged social commerce include Adidas, Burberry, and H&M. These companies utilise platforms like Instagram to integrate shoppable posts, making purchasing directly through social media easier. Instagram's checkout feature, launched in 2019, allowed these brands to boost visibility and streamline the buying process. For instance, H&M uses Instagram Shopping to allow users to browse and purchase items without leaving the platform. Similarly, Adidas has used live-streaming on Facebook to engage with customers and drive sales.

TikTok has also become a hub for social commerce, with brands like Gymshark and Levi's harnessing its viral nature for product discovery and direct sales. Levi’s, for example, partnered with TikTok influencers to showcase customisable products, driving engagement and sales through TikTok Shop. Gymshark has capitalised on TikTok's interactive format, leveraging the app’s live-stream shopping capabilities and its strong base of influencers.

In addition, influencers and collaborations play a crucial role in amplifying social commerce reach. For instance, micro-influencers, with smaller but highly engaged audiences, have been instrumental in helping brands reach niche markets cost-effectively. Brands like Sephora have also collaborated with influencers to increase visibility and build trust. User-generated content from these influencers serves as powerful social proof, further boosting conversions. In fact, over 60% of consumers trust influencer recommendations more than traditional brand content.

SMEs

Small and medium-sized enterprises (SMEs) are increasingly tapping into social commerce to reach niche audiences. Social media platforms offer SMEs an affordable way to showcase products and engage directly with customers.

Through targeted ads, influencer partnerships, and organic content, small brands can pinpoint specific demographics and interests, catering to highly engaged niche audiences. For instance, small fashion brands can reach eco-conscious buyers, while artisanal businesses can connect with local communities or enthusiasts of handmade goods. This personalised approach allows SMEs to build loyal customer bases with relatively low investment.

The democratisation of e-commerce, driven by accessible social platforms, has been crucial for SMEs. Social media platforms now offer built-in shopping features, such as Instagram Shopping or TikTok Shop, allowing businesses of any size to sell directly through their social accounts.

Unlike traditional e-commerce, which often requires significant resources for website development and marketing, these platforms provide SMEs with cost-effective tools to compete with larger brands. They reduce barriers to entry, offering businesses the chance to reach global audiences without needing extensive infrastructure. This has made it easier for small brands to thrive in the digital marketplace.

Influences and the creator economy:

Influencers play a pivotal role in social commerce, acting as trusted intermediaries between brands and consumers. By promoting products directly to their followers, influencers create a sense of authenticity and personalised recommendation, which often results in higher engagement and conversion rates. Their content, whether in the form of product reviews, tutorials, or styling tips, makes products more relatable and credible. Followers, especially Millennials and Gen Z, are likely to trust an influencer’s endorsement over traditional advertisements, making influencers powerful drivers of social commerce.

Similarly, the rise of affiliate links, sponsored content, and brand partnerships has further strengthened influencers’ role in the creator economy. Affiliate links allow influencers to earn commissions on products their followers purchase through their recommendations. Sponsored content, where brands pay influencers to promote products, has become a common strategy to reach targeted audiences. Platforms like TikTok, Instagram, and YouTube facilitate these collaborations, allowing influencers to blend entertainment and advertising seamlessly. These partnerships benefit both parties: brands gain access to highly engaged audiences, and influencers monetise their content. The success of these collaborations has made influencers an indispensable part of the social commerce ecosystem, with many now playing a key role in driving sales and shaping consumer behaviour.

Social commerce offers several key benefits for businesses, allowing them to engage more effectively with customers and increase sales. These benefits include:

Increased customer engagement

Social platforms like Instagram, Facebook, and TikTok allow businesses to interact directly with customers through comments, likes, and direct messages (DMs). This real-time communication helps to build stronger relationships between brands and their audiences. Businesses can respond to customer inquiries, address concerns, and receive feedback instantly, creating a personalised shopping experience. These interactions increase customer loyalty and encourage repeat purchases.

Shortened sales funnel

Traditionally, the path from product discovery to checkout involved multiple steps, often leading to cart abandonment. With social commerce, the entire buying process—from discovery to checkout—happens within a single app. Features like Instagram Shopping, TikTok Shop, and Facebook Marketplace allow users to view, browse, and purchase products seamlessly without leaving the platform. This frictionless experience reduces drop-offs and increases conversion rates.

Enhanced social proof

Social commerce thrives on user-generated content (UGC), such as reviews, photos, and recommendations from real customers. When users see positive feedback and real-life experiences shared by others, it builds trust and credibility around the brand. This social proof is a powerful motivator, encouraging more customers to buy. Platforms like TikTok and Instagram are particularly effective at showcasing authentic customer reviews and influencer endorsements, resulting in products feeling more attainable - and desirable.

Targeted advertising

Social platforms offer precision targeting, with ads tailored to specific demographics, interests, and behaviours. This allows businesses to reach their ideal audience, increasing the likelihood of conversions. Facebook Ads, for example, enable businesses to focus on users based on factors like age, location, or previous online behaviour; doing so makes marketing efforts more efficient and cost-effective. In turn, brands can maximise ROI on their ad spend.

Platform dependency

Businesses relying exclusively on driving revenue via social commerce face significant risks, as they are subject to platform policies and algorithm updates. These factors can affect their reach and sales, limiting control over customer engagement and overall business performance on these platforms.

Social media algorithms determine the content that users are shown. A sudden change in the algorithm can reduce a brand's reach overnight, which can then impact sales significantly.

Getting lost in the noise

Social platforms are filled with non-commerce-related content, making it difficult for brands to maintain consumer attention and convert it into sales. As a result, users can get easily distracted by other posts, ads, or interactions.

Users can become overwhelmed by constant promotional content, leading to ‘ad fatigue’ or reduced engagement. This issue is amplified when users are repeatedly shown very similar products from multiple sellers in their feed.

Additionally, for sellers operating in a competitive niche, competitor promotions and discounts, as well as competition from those offering cheaper duplicate products, may impact sales.

Audience

Although most social platforms offer detailed targeting options, users browsing social media are often not in a purchasing mindset; this can lead to lower conversion rates compared to e-commerce platforms where customers are actively searching for products.

Additionally, social media algorithms can misinterpret user demographics, resulting in impressions being wasted on individuals who are unlikely to be interested in your product or service.

Trust and security concerns

Many users are hesitant to make purchases directly through social platforms, especially with unknown brands, due to concerns about product authenticity, customer service, scams, and fraud. Users may also be wary of sharing their personal and financial details on social media platforms, due to fear of data breaches or misuse of information.

Customer service

Resolving issues related to product returns, refunds, or customer service can be challenging on social platforms, especially since they often do not provide support directly for these functions.

Having additional platforms to manage queries and complaints can overwhelm customer service and social media teams, particularly as customers expect communication via these channels to be answered promptly due to the engaging nature of social media.

Payment service providers (PSPs) play a crucial role in supporting a social commerce strategy, enabling seamless and secure transactions within social media platforms. From enabling in-app payments, to offering diverse payment options and robust security features, PSPs help businesses deliver a frictionless shopping experience, thereby enhancing customer satisfaction and driving conversions.

For instance, PSPs enable seamless in-app payments, allowing customers to complete purchases directly within social platforms like Facebook Pay and Instagram Checkout. This optimises the mobile shopping experience by reducing the need for customers to leave the app, minimising distractions that can lead to cart abandonment.

By providing one-click payment options, PSPs streamline the checkout process, making it faster and more convenient. Simplifying the transaction flow is especially beneficial for social commerce, where impulse buying is common - and a quick, frictionless payment option can significantly improve conversion rates.

Multiple payment methods

A good PSP supports a variety of payment options, including cards, mobile wallets like Apple Pay and Google Pay, and Buy Now, Pay Later (BNPL) services. BNPL options, such as PayPal Pay Later or Klarna, allow customers to split their payments into manageable instalments, which can encourage higher-value purchases and appeal to budget-conscious consumers.

By ensuring that customers have access to their preferred payment methods, PSPs help businesses expand their reach and improve customer satisfaction, making it easier for consumers from different regions or financial backgrounds to complete their purchases.

Security and fraud prevention

One of the biggest concerns for businesses in social commerce is security. PSPs address this by offering robust measures like encryption, tokenization, and fraud detection systems. Encryption ensures that sensitive data is protected during transactions, while tokenization replaces sensitive payment details with secure tokens, reducing the risk of data breaches.

Advanced fraud detection tools monitor transactions in real-time to identify and prevent fraudulent activities, protecting businesses from chargebacks and building customer trust. By prioritising security, PSPs provide customers with the confidence to shop online, increasing the likelihood of repeat purchases.

Cross-border payments

For businesses engaged in international social commerce, handling cross-border payments efficiently is critical. PSPs facilitate global transactions by supporting currency conversion and offering regional payment methods like iDeal, SafetyPay, or Alipay. This allows businesses to reach a global audience, while complying with local regulations.

By offering familiar and trusted payment methods pertinent to different regions, PSPs help businesses overcome the complexities of international transactions. This ensures a smooth and secure experience for customers across the world.

Frictionless checkout

A frictionless checkout process is vital for reducing cart abandonment. PSPs provide embedded checkout solutions, allowing customers to complete transactions directly within a social platform, eliminating the need for any redirects to external websites. Doing so reduces the number of steps in the purchase journey, providing a seamless experience with minimal interruptions. With fewer barriers to completing a purchase, businesses can significantly improve their conversion rates.

Analytics and insights

PSPs also offer valuable analytics and insights from transaction data, helping businesses gain a deeper understanding of customer behaviour. These can be used to optimise payment methods, adjust pricing strategies, and identify trends that drive sales. Plus, by leveraging this data, businesses can implement more targeted marketing strategies and improve overall customer experience.

Additionally, PSPs provide detailed reporting on transaction performance, helping businesses to make informed decisions and enhance their social commerce strategy.

Faster payouts and subscription models

For businesses looking to improve cash flow, PSPs facilitate faster payouts, ensuring funds from transactions are quickly transferred to the merchant’s account. This is particularly important for small businesses or those relying on a high volume of transactions.

PSPs also support subscription-based models by offering recurring billing options. This benefits businesses selling subscription services or products, automating the billing process and reducing the likelihood of payment delays or missed payments.

So, what next for social commerce? Well, the future looks set to be shaped by several cutting-edge technologies and trends that will enhance the shopping experience, as well as increase accessibility across global markets.

More immersive experiences

Augmented Reality (AR) and Virtual Reality (VR) are becoming increasingly popular in social commerce, as they allow users to engage with products in a more immersive way. Virtual try-ons for fashion items, make-up, or eyewear, plus 3D product previews, give customers the ability to visualise products before making a purchase.

For example, platforms like Instagram and Snapchat already offer AR filters, so users can virtually ‘try on’ clothes or accessories. As AR and VR technologies advance, more businesses will likely adopt these tools to bridge the gap between online and in-store shopping.

Live commerce

Live-streamed shopping events have become a major trend, particularly in regions like China, and are gaining traction across the world. Platforms like Instagram Live Shopping, TikTok Shop, and Facebook Live enable businesses and influencers to showcase products in real time, answer questions, and offer exclusive deals.

This interactive format combines entertainment and shopping, encouraging users to purchase based on what they’ve just seen. As live streaming becomes more mainstream, businesses of all sizes are likely to integrate it into their marketing strategies to enhance engagement and sales.

Integration of AI and personalisation

Artificial Intelligence (AI) is contributing to the personalisation of the social commerce experience. AI-driven recommendations include curated product suggestions based on a user's behaviour, browsing history, and preferences.

Additionally, personalised shopping feeds make it easier for users to discover products tailored to their specific interests. AI-powered chatbots are also becoming more sophisticated, assisting customers in real time by answering questions, offering product recommendations, and even processing transactions. All these elements contribute to further streamlining the overall shopping experience.

Cross-platform shopping

As social commerce evolves, there is a growing trend toward cross-platform shopping, where social media platforms integrate more with other e-commerce technologies. This allows users to shop seamlessly across different platforms without needing to leave their favourite apps.

For example, Instagram’s Checkout feature enables users to buy products directly within the app, while TikTok has partnered with Shopify to create smoother purchasing experiences. As e-commerce ecosystems grow, we can expect more integrations between social platforms, third-party sellers, and payment gateways.

Global reach and local adaptations

Driven by localised strategies, social commerce platforms are also expanding into emerging markets. Platforms such as TikTok, Instagram, and Facebook are growing their presence in regions like Southeast Asia, Africa, and Latin America; at the same time, they are tailoring their services to meet the specific needs of these markets. This includes offering local payment options, supporting regional languages, and adapting to cultural shopping behaviours. By localising their offerings, social commerce platforms can expand their global reach, while still addressing the unique demands of each market.

Social commerce is rapidly becoming a crucial part of the e-commerce landscape, combining social media engagement with seamless shopping experiences. By 2025, the global social commerce market is expected to grow to $1.2 trillion, driven by the rise of mobile shopping, influencer marketing, and integrated shopping features on platforms like Instagram, TikTok, and Facebook.

This highlights the importance of social commerce for businesses looking to reach digitally savvy consumers, especially Millennials and Gen Z, who prefer discovering and purchasing products via social media platforms.

Social commerce's true power lies in fostering real-time engagement, creating personalised experiences, and offering frictionless in-app purchasing. Businesses can interact directly with customers, showcase products through immersive features like AR and live streams, and leverage user-generated content to build trust. It’s these factors which lead to higher conversion rates and stronger customer loyalty.

Businesses should integrate social commerce into their digital strategies to stay competitive. Here at Ecommpay, we provide the tools to make this a seamless transition, offering solutions such as in-app payments, multiple payment methods, and robust security features to ensure a smooth, secure shopping experience. By partnering with us, businesses can harness the full potential of social commerce and drive sustainable growth.