Social Commerce: Expanding Horizons Through Business Models and Product Types

How has Digital Convergence Expanded Business Opportunities?

Digital convergence through the rise of social media platforms has facilitated the birth of an exciting offshoot of e-commerce – the integration of commercial activity within social media, or more simply put, the socialisation of commerce. This new business paradigm is distinguished by the interconnectedness of user participation, social interactions and economic transactions within the same platform, thereby offering businesses tremendously expanded opportunities for customer engagement, personalised marketing, peer influence and product visibility. It represents a more sophisticated, customer-centric form of commerce that leverages more than just the transactional aspect of buying and selling, capitalising on the multidimensional nature of online social interaction.

What Differentiates Various Social Commerce Models?

In successfully integrating commerce into the social media ecosystem, various distinctive models have emerged. Businesses might utilise established social networks, launching storefronts on platforms where target customers are already engaged, or they might build standalone social commerce platforms that create new communities around their product offerings. There are also models that capitalise on the power of user-generated content and peer reviews for product marketing, as well as those that harness the potential of group buying and social shopping.

How Does Product Type Influence Social Commerce?

While the social commerce landscape remains diverse and fluid, the nature of the product being sold can significantly impact the business model chosen and the tactics employed. Products with high social status, aesthetic, or lifestyle implications may benefit from being showcased on image-heavy platforms where peer approval and aspirational browsing play a substantial role. Meanwhile, products that consumers typically buy based on peer recommendation might flourish on review-based platforms. The complexity of the product can also influence the choice of platform – with more complex products, such as tech gadgets, requiring more information-oriented social commerce strategies.