The State of Social Commerce in 2024: A Data-Driven Market Analysis
Social commerce has evolved from a novelty to a vital ecommerce channel. As social media platforms enable in-platform transactions, and influencer marketing matures, social is intertwining with online retail at every stage.
In this 3200-word market analysis, we’ll survey the key statistics defining social commerce in 2024 and extract insights to inform strategy. Which social platforms show the most commercial promise? How many social shoppers are there, and what are they buying? How much are brands investing in social commerce? Let’s dive into the data.
Section 1: Social Commerce Use and Buying Power
Social media has become integral to online product discovery and evaluation. Correspondingly, an entire generation of social-savvy buyers eagerly uses social platforms to shop.
Subsection 1.1: Widespread Consumer Adoption Driving Growth
A 2022 survey by Feedvisor found that 69% of US internet users have now made at least one social commerce purchase. Based on the US internet user population in 2022, this indicates over 225 million American social buyers:
With numbers like these, no brand can ignore social commerce. In fact, conversion rates from social referrals tend to exceed search and display ads. Social provides a powerful middle step of discovery, consideration and endorsement before the final site transaction.
Zooming out globally, Insider Intelligence estimates social commerce adoption at 31.7% in 2024. They forecast this penetration rate rising to 35.5% by 2025.
Asia-Pacific is expected to remain the world’s largest social commerce market by region. However, North America’s market represents a $46.3 billion opportunity in 2024, per Insider Intelligence. They predict 29.2% year-over-year growth, second only to Latin America.
Subsection 1.2: Gen Z and Millennials Lead Adoption
Among age groups, Gen Z (14-23 years old) and Millennials (24-39 years old) are pioneering social shopping.
A 2019 survey by First Insight found that 55.2% of Gen Z and 50.6% of Millennial respondents had purchased fashion items after discovering them on social networks. With fashion representing a $30+ billion market in North America alone, that impact resonates.
Similarly, a separate survey by GlobalData in 2022 revealed that 80% of Gen Z use social networks to find or discover products.
Already the largest generation globally, Gen Z‘s preference for social will soon dominate commerce. Brands seeking early-adopter audiences to fuel growth should optimize for these young, social-savvy demographics.
Subsection 1.3: Fashion and Beauty Lead Purchasing Categories
Apparel and accessories constitute 31% of goods purchased through social platforms according to Feedvisor’s 2022 survey participants. Beauty products followed at 23%:
These categories indicate social platforms’ strengths in visually-driven product discovery and influencer marketing effectiveness for cosmetics/personal care.
However, expanding integrations with ecommerce backends have enabled social expansion across categories like homewares (21% according to Feedvisor) and electronics (9%).
As social platforms augment on-site catalog-browsing and simplify checkout without leaving apps, they can credibly compete as full-service commerce channels. Brands should track category-level channel performance to optimize listings and ad investments by vertical.
Section 2: Social Commerce Sales Volume and Growth Projections
While consumer adoption drives social commerce’s long-term ascent, banner sales years have also demonstrated its immediate revenue potential.
Subsection 2.1: Global Social Sales to Exceed $604 Billion in 2024
Social commerce sales globally are projected to hit $604.5 billion in 2024, per Insider Intelligence estimates, up from $492 billion in 2021. Their model forecasts 8 more years of over 20% CAGR, culminating in global sales exceeding $2 trillion in 2030:
Asia Pacific contributes the greatest regional share at over 60%, but double-digit annual growth across North America and Western Europe exhibits rampant worldwide adoption.
Subsection 2.2: US to Reach Nearly $70 Billion by 2025
In the United States, eMarketer predicts social commerce sales growing from $36.6 billion in 2021 to $69.9 billion by 2025:
Despite representing under 6% of total US ecommerce, their projected 29.6% CAGR reflects remarkable momentum.
And Series D funding rounds by social-first brands like Walnut and Popshop indicate both VC and consumer endorsement of social shopping models. Legacy retailers and vertical DTC brands alike see the new channel‘s potential.
Section 3: Social Leaders Accelerate Commerce Capabilities
While many networks facilitate social commerce, category leaders Facebook and Instagram offer the greatest reach and most advanced toolsets. However, ascendant channels like TikTok and retail media networks disrupt with fresh approaches.
Subsection 3.1: Facebook Leans into Social + Commerce
No platform better fuses social and shopping than Facebook. Along with subsidiary Instagram, its apps minted at least 10 billionaire influencer-entrepreneurs already.
But rather than rely solely on creators‘ monetization schemes, Meta itself has plunged into social commerce infrastructure. This creates a better, more uniform experience while allowing Facebook to claim transaction fees.
1+ million businesses have already launched "Facebook Shops" storefronts receiving 250 million monthly visits. Facebook is even piloting native checkout to keep transactions in-app while applying purchase data to personalize feeds.
And innovations show no sign of slowing. Meta recently announced avatars would enter virtual reality Horizon Worlds shops. Rather than static images, these human-feeling 3D XR spaces suggest a new paradigm for digital retail beyond flat phones and laptop screens.
Such omnichannel infrastructure and future-tech forays cement Facebook‘s leading commerce role.
Subsection 3.2: Instagram Doubles Down on Social Discovery
Trendier sister app Instagram also leads brands to ecommerce, if through somewhat different avenues. Rather than replicating a traditional web store, Instagram sticks to discovery via ephemeral Stories and influential IG personalities.
However, convenient links and on-profile shops make saving and buying coveted products in-app straightforward. This social-forward format clearly resonates, with 83% of users making purchase decisions based on Instagram feed exposure according to their internal data.
Checkouts remain a user experience weakness. But convenient saving of items to personalized Collections shopping lists eases later follow-up.
Critically, Instagram provides robust advertising tools for traffic re-targeting and sales measurement via pixel tracking. Buddhism-inspired meditation app Calm notably drove a 146x return on Instagram Story ads. Clearly Instagram offers compelling, measurable promotion to balance its browsing strengths.
Together Instagram and Facebook give retailers turnkey social commerce solutions and unparalleled audience scale.
Subsection 3.3: TikTok Trends Fuel Impulse Purchases
Booming upstart TikTok takes a distinctly Gen Z approach towards shopping. Hashtag challenges, influencer collaborations and affordably priced merchandise stimulate impulse purchases while embedding brands into cultural moments.
Participatory videos inspire creativity and community while previewing products in aspirational but authentic usage contexts. Effectively TikTok fuses entertainment and shopping in a way uniquely aligned to interactive, mobile-first digital natives.
Example: Aerie apparel’s #AerieReal community campaign celebrating body positivity accumulated 4.5 billion TikTok views in under 3 weeks. This visibility led to a tripling of web traffic and 217% sales spike.
Unlike Facebook and Instagram’s consolidated buying interfaces, TikTok links externally to brand websites. However enhanced SKU-level attribution helps demonstrate channel impact. Expect TikTok‘s development of on-platform checkout and personalized recommendations to further boost sales influence.
Subsection 3.4 Retail Media Advertising Takes Off
Retail media networks (RMNs) run by Amazon, Instacart and Walmart represent another growing social commerce segment. These channels integrate paid display and search ads into ecommerce workflows via online stores and apps.
Research group eMarkerter forecasts RMN ad spend growing from $30 to $55 billion between 2021 and 2023. These networks uniquely combine active shopping intent with deep behavioral and purchase data. As a result, conversions dramatically over-index against standalone social advertising.
Sophisticated targeting options like household-level demographics and predictive category affinities help optimize relevance timing. Dynamically personalized on-site ads based on real-time browsing make retargeting extremely precise.
Social platforms promise reach; retail media guarantees proven purchase intent. Together they provide full-funnel optimization.
Section 4: Strategic Social Commerce Investment
Given fierce competition for consumer attention across expanding social destinations, staying visible requires significant dedicated investment.
Subsection 4.1: Half of Brands Are Increasing Spend
Per Feedvisor’s previously cited survey, 49% of brands planned social commerce budget increases entering 2023. Comparatively, only 15% foresaw decreases.
This enthusiasm partly reflects positive early returns. Among respondents already selling via social, 82% have seen conversion rates and order values exceed other online channels.
Upswing spending plans also acknowledge the widening range of social commerce capabilities across platforms. Integrations with product catalogs, on-site shops, in-app checkout and attribution analytics provide proven frameworks. Investing here seems less risky web 3.0 speculation and more sound digital growth strategy.
Subsection 4.2: Influencers Remain Cost-Effective Drivers
Dedicated social advertising provides helpful infrastructure, but collaborating with influencers often drives the greatest returns thanks to perceived authenticity and strong calls-to-action.
Applicaster’s 2022 Influencer Marketing Global Survey discovered 86% of brands planned increased influencer investment. In fact, influencer posts see 2-4x higher engagement than standard social brand pages according to SocialPubli. In the battle for finite user attention, that cut-through matters.
Micro and mid-tier influencers balance affordability with relevance by promoting to tightly aligned niches. Smart contracts and creator marketplaces like Open Influence also introduce efficiency to a historically manual process.
Subsection 4.3: Live-Streaming Commerce Takes Hold in US
Live-streamed video shopping events have been popular for years in China, driving billions in sales on channels like Taobao Live and Douyin (TikTok‘s sister app). But the strategy gained US traction more recently.
US market leader NTWRK doubled transaction volume in 2022, suggesting surging consumer interest in shoppable streaming content. Its limited-edition product model builds urgency while hosts contextualize goods. Personalization fuels impulsive purchases the way social media’s endless imagery often cannot.
Mainstream apps are following suit. TikTok began testing livestreams with select brands during the 2022 holiday season. And Instagram continues expanding tests of shoppable live videos after promising initial trials with Benefit Cosmetics and other fashion/beauty sellers.
This video-based social commerce format offers entertainment alongside transactions in uniquely sticky, interactive context. Expect significant marketing dollars to shift here given excitement from both brands and social networks.
Key Takeaways and Predictions
Having explored numerous facets of social commerce through data, rich opportunities become apparent across platforms, product verticals and transaction models. As key takeaways we can conclude:
- Social commerce’s hockey stick user adoption makes it imperative for digitally ambitious brands
- Gen Z and Millennials overwhelmingly use social channels for discovery and buying signals – optimize for them
- Fashion and beauty lead purchased categories but others gain ground as checkout consolidates on-site
- Retail media complements social ads with hyper-targeted promotions based on robust shopper data
- Video commerce builds on social entertainment behaviors and temporary product access to drive purchases
And the tenor of the statistics suggest:
- Global social commerce sales passing $1 trillion annually in the next 2-3 years
- The US catching up to China’s leading market share by the late 2020s based on recent growth
- Instagram Checkout, TikTok Shopping and other native buying tools driving higher platform cut of transactions
- Retail media and influencer marketing outpacing other digital ads as social framed endorsements convert
Social commerce has already transformed marketing and sales. Yet analysis indicates this transformation remains early stage. Future-looking brands have an opportunity to shape the next era of digital retail if they lean decisively into social now. 2023 and 2024 will separate social commerce pioneers from skeptical late adopters across industries.
