Millions of shoppers are turning to social media platforms for product discovery and purchases worldwide. The trend, which increased significantly during the global pandemic outbreak, is growing year over year in the United States. In 2023, the social commerce market is expected to reach US$62.91 billion, according to PayNXT360 estimates. By 2028, the gross merchandise volume will increase to US$145.22 billion. To tap into the high-growth market, new and existing players are entering the e-commerce segment and are taking the competition to TikTok by leveraging TikTok-style shopping capabilities.
Trendio, which is the brainchild of the former Vice President of Prime Video United States, the shopping app has been made available on iOS, Android, and Roku. Perez-Tenessa, Prime Video VP, says that consumers are moving towards connected TV. As a result, Trendio has been made available on Roku. Although the app has been launched only in the United States, the firm is planning a broader rollout going forward.
Flip, another TikTok-like discovery and shopping platform, is seeking to tap into the growing social commerce market in the United States. In H1 2022, the firm reported rapid growth with its user base growing 500%. In H2 2022, the firm also raised US$60 million in a funding round to accelerate its growth by deepening brand partnerships and launching a third-party social commerce marketplace.
While Flip has offered a TikTok-style shopping experience to its customers, it has a stricter vetting process compared to the Chinese firm. Over the years, TikTok has emerged as a hotbed for sponsored content. This means that it is difficult for consumers to determine if creators are really offering an unbiased opinion.
Supergreat, in the United States, is another firm that is seeking to tap into the social commerce market. Multiple live events are conducted every day on Supergreat by influencers and brands, driving huge volumes of sales for beauty firms like Ulta Beauty.
In addition to these new entrants, which are taking the competition to TikTok by leveraging the TikTok-style shopping experience, giants such as Amazon have also adopted a similar strategy. In December 2022, Amazon launched the TikTok-style shopping feed Inspire, enabling users to purchase products that are featured in short video and content formats. However, unlike Trendio and Flip, Amazon will focus on more than just beauty products.
In the United Kingdom too, firms having a similar business model like TikTok have emerged over the last few years. Agora, for instance, launched a livestreaming marketplace that has been dedicated to the beauty and wellness product category.
TikTok, which has been expanding globally including in the United States and the United Kingdom, is facing stiff competition from these new entrants. While these firms are relatively small compared to TikTok, players like Flip are growing at an accelerated pace in the North American market.
Moreover, the potential ban on TikTok in the United States owing to data privacy and security concerns, is also working in favor of these new entrants. Brands, in the United States, are avoiding advertising and selling products on TikTok due to its uncertain future in the North American market. Consequently, PayNXT360 expects more brands to partner with Flip, Trendio, and Supergreat from the short to medium-term perspective.
The competitive landscape in the social commerce space is poised to grow significantly in 2023. Reddit, for instance, is also expected to make a major move in the United States and European social commerce industry over the next 12 months. The firm is currently in the process of hiring for various positions, including ads marketplace: e-commerce, and senior product manager. This indicates that the social media platform is planning to tap into the high-growth e-commerce sector.
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