The global social commerce market size was valued at USD 474.76 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 28.4% from 2021 to 2028. This growth is ascribed to surge in average time spend on social media platform during pandemic coupled with greater convenience for buyers to purchase products. Moreover, increasing number of active buyers on various social media platform such as Facebook, Twitter, Inc., Reddit, Taobao.com is also anticipated to drive the market growth over the forecast period. The market is gaining traction due to a growing adoption of online buying that is aided ease of shopping, product browsing and payment options. Customers can order products at the comfort of their homes without any effort. Several sellers on the social media platforms are offering discounts, cashbacks, one-day deliveries, EMI options, and other services that makes online shopping easy and more lucrative than offline buying. Companies are investing in technologies such as Artificial Intelligence (AI), chatbots, Machine Learning (ML), and Augmented Reality (AR) to improve customer experience. The growing ease of online buying is expected to be a prominent factor driving the market growth over the forecast period.

A high number of social media users in the Asia Pacific region is anticipated to favor market growth. Due to an increasing number of social media users, retailers in the Asia Pacific are using social media platforms such as Facebook, Instagram, and Twitter to market their products. Although the market looks promising, concerns related to consumer data privacy will pose a challenge to industry growth. Retailers in this space are leveraging technologies such as AI, big data, blockchain to improve the customer buying experience, and will play a pivotal role in uplifting industry growth. However, these technologies are evolving with use cases still being explored in the social commerce space. Therefore, privacy issues and incidences of cyber-attacks may hinder market growth to a certain extent.

Innovations have allowed social media platforms to transform into tools capable of undertaking many functions beyond communication. As the COVID-19 pandemic disrupted operations of several brick-and-mortar enterprises worldwide, online social retail emerged as a breakthrough retail model. Integration of e-commerce with social media has become a powerful marketing tool enabling consumers to explore products they generally would not see on an e-commerce platform.

A rapid growth in e-commerce transactions has been a major outcome of the COVID-19 pandemic, accelerating the existing trends in the e-commerce space. Along with the massive growth in the traditional e-commerce business model, the pandemic has brought about shifts in consumer behavior that are expected to transcend across the social commerce channel. The current impact of the pandemic and a shift to online shopping is a trend that brands can capitalize on by improving the shopping experience across different channels including social media.

The business model segment has been segregated into business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C). The B2C segment held a colossal market share of over 50% in 2020 and is projected to grow significantly over the forecast period. Growing digitization and shift in consumer mindset are the major factors boosting the business-to-consumer (B2C) business model. Social commerce platforms let customers to seamlessly view, choose, and order a product while assessing the same based on reviews posted by other users.

B2B segment captured a market share of 30% in 2020. This type of social commerce website is used by other businesses or companies as a platform to sell products or services to another company. For example, TripAdvisor serves its hotel partners through their Twitter account. B2B businesses also focus on niche markets (for example, selling dog food to a pet store) and fulfill the specific needs of clients. Growing digitization across various industries and changing business trends towards social media platforms is expected to bolster the social commerce market growth.

The apparel segment held the largest market share of 21.69% of the overall social commerce revenue in 2020. Apparels are one of the most popular selling products on social media platforms. The number of vendors selling apparel are largest than any other product type in the social commerce market. During the time of strict lockdown due to the COVID-19 pandemic, shoppers were spending more time online and explored new social commerce shopping platforms. In addition to this, many platforms were offering discounts, free delivery, and exchange offers to attract customers during the time of lockdown. This has resulted in growth in the sales of the apparel segment.

The personal and beauty care segment is expected to register a significant CAGR during the forecast period. Users prefer buying these products online as they do not need to touch the products, and they get know what they are getting every time they buy it.

Asia Pacific accounted for the largest revenue share exceeding 60% in 2020. Chinese social commerce industry reached exceeded a market size of USD 200 billion in 2020, leading the Asia Pacific market. The growth of the country is majorly driven by two platforms, Alibaba and Tencent (WeChat), which have successfully incorporated social media, product discovery, and digital payment infrastructure into their platforms. Moreover, platforms such as Xiaohongshu and Pinduoduo have played an instrumental role in leveraging the advantages of social shopping through several promotional activities.

North America held a substantial share of the global market demand in 2020. It was observed that over 40% internet users aged between 18 to 34 years bought an item online after clicking on it on a social media platform, as of October 2019. In the U.S., among all online users, this age group had the largest social commerce engagement rate.

Facebook and Instagram emerged as two popular social shopping platforms in 2020 with Pinterest and Snapchat soon expected to follow the suit. YouTube is also considered a popular platform in worldwide with over half of the population using the platform to watch videos. Gen Z has emerged as a popular social media user base with over 50% aged between 18 and 29 years. These statistics suggest a favorable market for social commerce over the forecast period.

Companies also focus on launching new features on their social commerce platforms. For instance, Alibaba launched the live streaming service, Alibaba Live in 2018. With the help of this service, online retailers could market their products on Alibaba's social commerce platform. Some of the prominent players operating in the global social commerce market are: Etsy, Inc.; Fab; Facebook; PayPal Payments Private Limited; Pinterest; Poshmark, Inc.; Reddit Inc.; SINA Corp.; Taobao (Alibaba.com); Twitter, Inc.

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