10 Best Social Media Platforms For eCommerce
In this piece, we will take a look at the ten best social media platforms for eCommerce. If you want to skip our introduction to social media and eCommerce, then take a look at 5 Best Social Media Platforms For eCommerce.
The power of social media which lets people sitting at home reach thousands of others all over the world has disrupted a variety of different industries. For instance, news organizations that typically had to rely on newspapers and physical deliveries can now target more readers through Facebook or X (formerly known as Twitter). Additionally, video sharing platforms such as Alphabet Inc. (NASDAQ:GOOG)'s YouTube have enabled media organizations to generate millions of views and reach users who do not have access to cable television platforms.
However, perhaps the biggest beneficiary of the Internet has been electronic commerce. While Alphabet's Google, the world's best known and most widely used search engine, is used to run informational queries (such as those surrounding the current conflict in Gaza) to enable users to stay up to date with current events, the reality is that one of the benefits that Google offered people during its early days was to easily search products online in an era where new websites were popping up left, right, and center and there needed to be a medium to consolidate all this information under a single roof.
Since then, the Internet, eCommerce, and social media have come quite far ahead. Not only is Alphabet one of the most valuable companies in the world, but Meta Platforms, Inc. (NASDAQ:META) is equally as valuable simply because its user base provides advertisers with the ability to reach billions of people. Meta, in particular, has been one of the hottest stocks in 2023, as the hype surrounding artificial intelligence has served it well since it provides the firm with the ability to generate better content and advertising recommendations to users. The hype has seen its shares gain 150.77% on the market year to date, and Meta has also announced key upgrades to its services that integrate AI into the broader user experience.
Therefore, it's clear that eCommerce and social media go hand in glove, since not only does social media allow small time merchants to set up their shops, just like Amazon.com, Inc. (NASDAQ:AMZN) does, but it also provides the merchants with a vast market whose product preferences and tastes are often laid out in clear for better targeted advertising.
In formal and research terms, selling products through social media is dubbed social commerce. Due to the ease of access for merchants and the vast number of users of social media networks, this market is quite sizeable. Multiple research reports try to wager an estimate for the size for this market. One such report comes from Accenture plc (NYSE:ACN) and it suggests that social commerce sales stood at a whopping $492 billion as if this wasn't enough, despite its heft, the sales are expected to grow at a compounded annual growth rate (CAGR) of 26% to sit at $1.2 trillion by 2025 end. Accenture believes that Asia and Brazil will lead this wave of social commerce sales, with India in particular expected to play a dominant role due to its large youth population that is more technologically literate when compared to its elders. As for the U.S., American social commerce sales should double by 2025 and will be dominated by items such as apparel.
Building on this, the consulting and research firm McKinsey shares that for U.S. eCommerce sales, the share of sales through social commerce will continue to rise in the future. Its data shows that social commerce as a percentage of eCommerce stood at 3.4% in 2020 and was worth $3.4 billion in the year. McKinsey's projections show that by the end of 2025, not only will the percentage of sales grow to 5.2%, but the value of social commerce sales will be $79.6 billion in the U.S., to account for a sizeable but a small percentage of the projected global social commerce sales of $2 trillion by 2025. McKinsey adds that social commerce has proved to be quite beneficial for companies operating in China, as those who have leveraged Instagram's flashy influencers and utilized innovative approaches such as live stream shopping have seen conversion rates of 30% which are ten times as high as traditional eCommerce!
Since AI is the talk of the town these days, and Meta's Facebook is believed to be one of the biggest beneficiaries of AI's application to social commerce, here's what Meta's management had to say during its latest earnings call conference:
Beyond Reels, AI is driving results across our monetization tools, through our automated ads products, which we call Meta Advantage. Almost all our advertisers are using at least one of our AI driven products. We’ve also deployed Meta Lattice, a new model architecture that learns to predict an ad's performance across a variety of datasets and optimization goals. And we introduced AI Sandbox, a testing playground for generative AI powered tools like automatic text variation, background generation, and image outcropping. Business messaging is another key piece of our monetization strategy and we recently announced that the 200 million users of our WhatsApp Business app will now be able to create Click-to-WhatsApp ads for Facebook and Instagram without needing a Facebook account.
This is a pretty big unlock, particularly in countries where WhatsApp is often the first step to bring their business online. Paid messaging is a bit earlier, but it’s also showing good adoption. The number of businesses using our paid messaging products has doubled year-over-year. While we’re on messaging, I mentioned that we started rolling out channels on WhatsApp last month. It’s a simple, reliable and private way to receive important updates from people and organizations. And I’m quite excited for more people to try it as we bring the product to more countries through the rest of this year.
So, with these details in mind, let's take a look at the best social media platforms for eCommerce.
Image by Gerd Altmann from Pixabay
Our Methodology
To make our list of the best social media platforms for eCommerce, we ranked popular social media platforms by the number of active monthly users or total users. The list is not all inclusive.
10 Best Social Media Platforms For eCommerce
1. Facebook
Latest Monthly Active Users Estimate: 3 billion
Facebook is one of the biggest social media platforms in the world, and also one that has managed to successfully grow over the past two decades. It offers brands the ability to set up their own shops online and then hunt for customers through marketing campaigns. Facebook has also upgraded its platform over the years as well, and it offers the Facebook Marketplace that enables even regular people to list their products online for selling. Facebook relies on its user data and preferences to market merchant products, and it charges merchants marketing fees for the outreach.
2. Instagram
Latest Monthly Active Users Estimate: 2.35 billion
Instagram is another social media network owned by Meta Platforms. As opposed to Facebook, which relies mostly on text based social posting and engagement, Instagram is more of a visual platform. Additionally, Instagram is not an original Meta product, as the firm bought it after it was set up and became operational. Facebook bought Instagram for $1.24 billion in 2021, and over the years, Instagram has introduced several upgrades to the platform too. Finally, Instagram influencers, at least the most well off, have done remarkably well for themselves, and most of them are celebrities who leverage their fan following to gain followers on the application and then market products to them while charging marketing firms hefty fees for their reach.
3. WeChat
Latest Monthly Active Users Estimate: 1.3 billion
WeChat is the first Chinese social media application on our list. It is run by Tencent Holdings Limited (OTCMKTS:TCEHY) and is one of the biggest applications of its kind in China which plays a central role in the lives of most people as it enables them to make payments, share photographs, and communicate with each other. WeChat's social commerce offerings are quite diverse as well, as it offers both business to business and business to customer capabilities.
4. TikTok
Latest Monthly Active Users Estimate: 1 billion
TikTok is another Chinese social media application that has taken the world by storm, to say the least. It allows people to share short video clips about anything they like and they believe has the potential to gain traction. TikTok has also been a godsend for companies who rely on influencers to push products to customers who might be interested. Additionally, like WeChat, TikTok also allows businesses to sign up on the platform and promote their products.
5. Snapchat
Latest Monthly Active Users Estimate: 750 million
Snapchat is another popular short video sharing social media network which is operated by Snap Inc. (NYSE:SNAP). It comes with a unique flavor as it allows users to share videos that are deleted after a set time period. Snapchat has also been supporting social commerce for quite some while, and it introduced Snap Discover in 2015 which allowed content creators to push their ad supported content on the platform.
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Disclosure: None. The author received no additional compensation for this piece apart from what is typically made by Insider Monkey. All investment decisions should be made after consulting a qualified investment professional. 10 Best Social Media Platforms For eCommerce is originally published on Insider Monkey.