As the year comes to a close, the shopping season is in full swing. On Black Friday, November 29th, retailers will offer significant discounts to attract customers, with some sales having started weeks earlier. The rush for Christmas gifts is imminent, but this year, many consumers will be shopping not in physical stores or on traditional e-commerce sites, but through social media apps. According to eMarketer, social commerce—online purchases initiated on social media—is projected to reach $72 billion in the U.S. in 2024, making up 6% of online sales. This figure is up from $47 billion in 2022 and is expected to hit $100 billion by 2026. A growing portion of these transactions can be completed without users leaving the social media platform.
Leading this trend is TikTok, a short-video app owned by Bytedance, a Chinese tech company. Despite facing potential bans or sales due to legislative efforts in the U.S., TikTok aims to introduce a business model that merges shopping with entertainment. TikTok Shop, an e-commerce feature launched in the U.K. in 2021 and in the U.S. last year, allows users to browse product posts, watch live shopping events, and make purchases with just a few clicks. The app charges a 9% commission on sales in the U.K. and 6% in the U.S., and it now offers a logistics service to handle packing, delivery, and returns for merchants.
While TikTok Shop is expanding rapidly, achieving the same level of social commerce in the West as seen in China will be challenging. Meta has made several attempts to integrate e-commerce into Facebook and Instagram but has not seen significant success. For TikTok Shop to continue its growth, it must address the reluctance of consumers, brands, and influencers who connect them. In China, the lines between shopping and entertainment have blurred significantly, with social commerce expected to account for $900 billion of online sales this year, nearly 30% of all e-commerce. Douyin, TikTok’s counterpart in China, and Kuaishou, its main local competitor, are now among the largest e-commerce platforms in the country based on merchandise sales.
In contrast, Western shoppers have been slower to adopt social media as a shopping venue. A recent survey by Simplicity DX found that while 62% of Americans view social media as a useful tool for discovering new products, 74% still prefer to make purchases on traditional e-commerce sites. Additionally, the products currently available on social media are often low-cost impulse buys, which may not encourage a shift in shopping habits.
