The Era of Social Commerce

   Today's keyword is social commerce. We have defined what social commerce is when we talked about Levi's before. Groupon is a leading social commerce service provider in America. In Korea, Ticketmonster is gaining popularity, especially by people in their 20s and early 30s. Why these social commerce services are becoming popular these days?

 

   First, we need to understand the dynamics of social commerce. Three entities are involved in this process: local service provider, social commerce service provider, and customers. Local service providers register their services at social commerce websites. Customers glance over the registered services and buy the services they like. Social commerce is taking advantage of these customers' buying power. If a certain number of customers is willing to buy a certain service, local service providers bargain the service's price and customers can buy it at a much cheaper price. It is a sort of group purchasing. Social commerce service providers give back the profits after they receive a commission.

 

   Customers can enjoy many different services that they really wanted to use but were too expensive without paying much. Local business providers can market their services and earn profits at the same time. Social commerce service providers, of course, yields profits during this transaction. All the entities involved benefit from social commerce.

 

   Yet, there are potential dangers in social commerce business. The quality of services provided by local service providers might be poor. Thus, social commerce service providers must make sure that registered services are of good qualities. If people keep feeling disappointed or unsatisfied, social commerce business is bound to perish. It is of utmost importance for social commerce service providers to have many different local service providers because a variety of services provided matters to their customers. At the same time, the management of those local service providers should be rigorous enough to guarantee the quality of services provided.

 

   It is an undeniable truth that social commerce is on the rise. Many people even commented that social commerce is the most brilliant business model after Google. In order to further thrive, social commerce service providers should be wary of many potential dangers hidden in the industry and deal with those perils wisely.

Social Commerce

   Clouds are all over the sky, making me feel gloomy... Yesterday I saw movie titled "이끼." You should go and watch this one.

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Today, we are going to talk about social commerce. What comes up in your mind when you hear the words "social" and "commerce"? It is very hard to define exactly what social commerce is because the concept itself is something new. It may refer to group purchase sites. It may encompass the use of social networking sites as a means of promote one's commerce. So just think that social commerce is the combination of social media and electronic commerce. It is in its very early stage of development, so we have to watch whether it will keep evolving. Then, why did social commerce become popular these days?

 

Before we move on, for those who really want to know the dictionary definition of social commerce, here it is. Wikipedia says social commerce is a subject of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services. Very Long! Oh... It keeps on saying... "More succinctly, social commerce is the use of social media in the context of e-commerce." See? Pretty much same with what we have talked about in the previous paragraph.

 

Let us get back to our business. Why is social commerce so popular? Analysts say there are mainly three reasons for which social commerce is under the spotlight of customers and companies.

 

1. Increase in Traffic

Social commerce basically takes advantage of huge social networks already established in social media. Thus, the number of prospective customers can be phenomenally huge if companies know how to use social media.

 

2. Substantial Decrease in Marketing Cost

This is what we have always talked about when discussing social media. Less marketing cost! (It does not mean that you do not invest time or money in social media marketing.)

 

3. Increase in Purchase Possibility

Friends share same interests. If a friend buys one product and recommends about it to his or her friends, those friends whose interests are similar to him or her are more likely to purchase the item, too. Also, people tend to believe what their friends and acquaintances say than what companies say.

 

Today, we discussed what social commerce is and why social commerce is popular. Tomorrow, we will go over the examples of social media to help our comprehension on the subject. Have nice day~