The growth in online shopping has led to the acceleration of alternative shopping habits like social commerce. Growing at a 31.4% compound annual growth rate (CAGR) between 2020 and 2027, the global social commerce market is estimated to grow to $604.5 billion by 2027.
According to the research data analysed and published by Stock Apps, 15% of ecommerce companies worldwide are already selling on social media while 25% are planning to start.
Much of the growth will come from China, says the data. China’s social commerce market is estimated to grow at a 30.5% CAGR over the period of the analysis. According to eMarketer, the country is estimated to have 357.2 million social buyers by the end of 2020. That would be equivalent to 30.6% of the total population.
In 2021, the figure will rise to 392.2 million, 420 million in 2022 and 446.8 million by 2023. At the end of the forecast period, China is set to account for 37.9% of social buyers worldwide. Based on data from Statista, the number of social commerce users could be even higher as its 2020 estimate is 713 million.
eMarketer projects that retail social commerce sales will reach $242.41 billion in China in 2020. The sector is expected to account for 11.6% of total retail eCommerce sales in the country this year. By 2023, the figure is estimated to almost double to $474.81 billion.
On the other hand, the US has been far behind China in social commerce sales. In 2019, US social commerce sales totaled $19.42 billion against China’s $186.04 billion according to eMarketer, nearly 10 times smaller.
Walmart and Facebook are among the US companies embracing the trend. Walmart announced plans to buy a 7.5% stake in TikTok.
To put that into perspective, Douyin, the Chinese version of TikTok, had 600 million daily active users as of August 2020. It had over 22 million active creators at the time who made $6.15 billion in the previous 12 months. In 2021, the company’s revenue target for creators is $11.8 billion.
Meanwhile, Facebook Shop is similar to Taobao Live, allowing businesses to go live and feature products. Notably, at the peak of the lockdown in February 2020, its streaming events increased by 110%. Taobao Live GMV surpassed $53.2 billion in revenue for the 12-month period which ended on September 30, 2020 according to China Internet Watch.