The new capital brings Udaan’s total funding to date to US$1.15 billion. Indian Business-to-Business (B2B) ecommerce startup Udaan announced on January 6 that it has raised US$280 million in additional financing from existing investors Lightspeed Venture Partners, DST Global, GGV Capital, [...]
By Phil Pomford
Is social media the new storefront?
Social commerce is an evolving discipline that has hardly scratched the surface of what’s possible. Brands, ecommerce merchants, and social media platforms alike have long recognized the potential for social media to emerge as a dynamic sales channel, with its highly visual, social nature, and exceptional mobile experiences. Reducing friction makes shopping easier and more efficient for consumers, delivers higher conversion rates and ROI for brands, and cements social media as an increasingly effective sales channel.
Hong Kong has one of the highest smartphone and Internet adoption rates in the world. With the introduction of mobile wallets and new payment providers, it can be said that an ecommerce revolution is underway.
Fast, simple, and secure payment methods are essential for ensuring social media interactions convert to sales. Reducing the gap between discovery and conversion requires an uninterrupted ‘digital last mile.’ To thrive, the payments on social media must minimize friction by enabling a wide variety of payment options, such as digital wallets–coupled with a mobile-optimized checkout and even flexible financing.
China is leading the way in social commerce, fueled by Chinese consumers’ overwhelming preference to browse the Internet via smartphones. Having leapfrogged the desktop era, Chinese Internet users gravitate to social sharing features of superapps on their smartphones.
Superapps like WeChat (which has over one billion users in China alone) consolidate multiple app functions into the one platform, so users can do everything from booking flights and hotels to socializing with friends, without ever needing to leave the app.
In 2019, Instagram enabled their ‘Checkout on Instagram’ function, which allows consumers to shop products through a story or a post, without ever leaving the app. Snapchat now offers similar functionality: ‘Shop and Cop’ lets users browse and buy from any brand entirely within the Snapchat mobile app.
More recently, social media phenomenon TikTok is enjoying in-app revenue growth in India by allowing users to buy TikTok coins, which are then used to purchase digital gifts for other users. The video-sharing platform grossed US$75 million from the sale of virtual currency (Mobile Marketer). This figure is only set to grow as it increases in popularity.
In a world driven by technology, the commercialization of social media has given the strong social and emotional components of shopping a new meaning. It has enabled brands to reinvent the context in which consumer emotions are stimulated. In the digital age of shopping, products are presented in lifestyle experiences that often include friends and other influencers, creating that perfect place for us to find just the right things.
About the Author
Phil leads the Worldpay from FIS Global eCommerce team across Asia Pacific which operates from four offices in Singapore, Australia, Japan and China, as General Manager. Having lived in Asia for 21 years, he has held diverse management roles across Asia Pacific and developed key strengths in customer development, strategy, financial planning, and new market entry. He has a degree in Accounting and Law and a MBA from Manchester Business School.
Photo by Austin Distel on Unsplash