Social commerce: engaging, converting and retaining Gen Z

The context

Since Covid-19 and the restrictions, the number of users of social platforms continues to grow. According to Data Reportal, there were 5.17 billion social network users at the end of July 2024, or 63.7% of the world’s population, up 5.6% in one year. In 2020, the figure was 3.8 billion, or barely 50% of the world’s population. Projections predict 6 billion users by 2028.

While YouTube (2.5 billion users) and Instagram (2 billion) dominate in terms of audience, TikTok (a subsidiary of ByteDance, with sales in 2023 of US$120 billion, i.e.  up by 40%) has seen the most meteoric growth. The client audience, which does not include those aged under-18s, has grown from 800 million users in 2020 to 1.56 billion in 2024. This is now by far the most popular social network for the under-18s. Unlike the Meta platforms like Facebook or Instagram, Tik Tok remains blocked in India, a country of 1.43 billion people where Instagram has 363 million users.

According to the Digital 2024 report by We Are Social and Meltwater, user interest in social networks goes beyond simple entertainment. The main reasons cited are: entertainment (38%), finding content (30%), finding products to buy (26%), following brands (22%) and celebrities or influencers (20%). For brands, there is a growing opportunity to engage intentional users (those who actively seek out their branded content), but also to go after less intentional users, through an attention-grabbing strategy. This is the famous competition for attention.

Since 2016 with the Meta group, social networks have been launching their e-commerce interfaces in countries where this is possible. Initially tested in the United States with around 20 merchants, Instagram offered a range of features enabling web users to discover brands’ products (clickable ads, price information, product characteristics, redirect link to the merchant’s website and then redirect to the application’s site). These features arrived in France in March 2018. From August 2018 payment was available directly on the app.

In July 2022, Meta launched the Instagram marketplace, which connects brands and content creators. According to Fevad, 72% of Instagram users in 2023 made a purchase based on ads seen on the platform. In terms of social commerce, one of the most promising initiatives is the TikTok Shop. It was first launched under the name ‘TikTok For Business’ in partnership with Shopify, then beta tested in the U.K. and South East Asia in 2022. Re-launched in August 2023 in the U.S.A. and the U.K. TikTok Shop is now achieving high penetration and sales conversion rates. According to Foxintelligence (Nielsen IQ), in the first half of 2024 in the United States, TikTok Shop was the 16th largest e-retailer in terms of value sales (data as at June 2, 2024), and No. 2 in terms of growth after Amazon. Penetration exceeds that of Temu and Shein. In the U.K., it is already the 10th largest e-tailer and the 3rd fastest growing after Temu and Amazon.