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    Social Commerce

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    Aston chua
    Social commerce leverages social media platforms and applications to enable online shopping interactions. It allows buyers to complete purchase decisions through social shopping, marketplaces, and tools that facilitate shared participation. Key aspects of social commerce include content sharing on platforms like Pinduoduo and RED, which generate interest through word-of-mouth recommendations and reviews. Social media influences each stage of the consumer decision process, from initial problem recognition through post-purchase evaluation, by facilitating information search, alternative evaluation, purchase actions, and feedback.

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    Social Commerce

    Uploaded by

    Aston chua
    38 views51 pages
    Social commerce leverages social media platforms and applications to enable online shopping interactions. It allows buyers to complete purchase decisions through social shopping, marketplaces, and tools that facilitate shared participation. Key aspects of social commerce include content sharing on platforms like Pinduoduo and RED, which generate interest through word-of-mouth recommendations and reviews. Social media influences each stage of the consumer decision process, from initial problem recognition through post-purchase evaluation, by facilitating information search, alternative evaluation, purchase actions, and feedback.

    Original Title

    9. Social Commerce

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    Social commerce leverages social media platforms and applications to enable online shopping interactions. It allows buyers to complete purchase decisions through social shopping, marketplaces, and tools that facilitate shared participation. Key aspects of social commerce include content sharing on platforms like Pinduoduo and RED, which generate interest through word-of-mouth recommendations and reviews. Social media influences each stage of the consumer decision process, from initial problem recognition through post-purchase evaluation, by facilitating information search, alternative evaluation, purchase actions, and feedback.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    38 views51 pages

    Social Commerce

    Uploaded by

    Aston chua
    Social commerce leverages social media platforms and applications to enable online shopping interactions. It allows buyers to complete purchase decisions through social shopping, marketplaces, and tools that facilitate shared participation. Key aspects of social commerce include content sharing on platforms like Pinduoduo and RED, which generate interest through word-of-mouth recommendations and reviews. Social media influences each stage of the consumer decision process, from initial problem recognition through post-purchase evaluation, by facilitating information search, alternative evaluation, purchase actions, and feedback.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 51

    9.

    Social
    Commerce
    Today, we talk about social commerce
    Starting from this question:

    • How have social media influenced your own shopping


    behaviors?
    • Give us some examples!
    Social Commerce
    • Social commerce is a subset of e-commerce that uses social media
    applications to enable online shoppers to interact and collaborate
    during the shopping experience, buyers to complete the stages of
    the purchase decision process, and to assist marketers in selling to
    customers.
    • It encompasses social shopping, social marketplaces, and hybrid
    channels and tools that enable shared participation in a buying
    decision.
    • It enables people, both networks of buyers and sellers, to participate
    actively in the marketing and selling of products and services in
    online marketplaces and communities.
    So in a nutshell, we are looking at more than your
    traditional e-shops
    Like what?

    • Could we be talking about Groupon?


    Could we be talking about Groupon?

    • But really – how often do you really interact with people when
    using Groupon?
    • Better examples?
    Again, let’s look at China…

    https://youtu.be/7eiP0tLquFE
    Pinduoduo (PDD) – a basic walkthrough

    (BTW, they do have a search bar function now) https://youtu.be/Zbskb0KMBUU


    PDD – developments and more functions

    https://youtu.be/6S_j3UQSNpQ
    Pinduoduo (PDD)

    • Founded in 2015, Pinduoduo started as an agriculture online


    retailer before transitioning to a third-party platform model
    connecting merchants and consumers across multiple product
    categories.
    • known for its interactivity and value-for-money offers
    • Recent year has seen a fast growth and expansion…
    Number of monthly active users of Pinduoduo
    Inc. from 1st quarter 2019 to 1st quarter 2022

    (in millions)
    Pinduoduo (PDD)
    Okay, so what’s so social about it?

    • PDD capitalize on the idea of social shopping.


    • Social shopping is the active participation in the consumer decision-
    making process (one’s own and that of others), typically in the form
    of opinions, recommendations, and experiences shared via social
    media.
    • It refers to consumers’ behavior as they use social media to make
    purchase decisions. Social commerce is, in this sense, the
    commercial application of social media to drive the acquisition and
    retention of customers.
    A related yet different social commerce model:
    Red Little book (RED, or Xiaohongshu)

    • A Chinese social Commerce app that… well, avoids to be


    perceived as an e-commerce app.

    • Indeed, Ms. Qu Fang, on of the founders of RED, once


    explicated said RED was “not an e-commerce company”
    So what does RED do?

    • The stated focus of RED is content creation/sharing, and


    community building
    RED: An Introduction

    https://youtu.be/HGxriZUWzGU
    RED: An Introduction

    • Core idea of RED: “Planting grass ( 種草 zhongcao)”


    • Referring the effect of when a person sees something
    owned/used/recommended by someone else, often on content-based
    social media platforms, and develops a desire to purchase the
    product.
    • Related terms include, “zhangcao ( 長草 ),” meaning longing for the
    product, and “bacao ( 拔草 ),” meaning the desire finally can be
    quenched by purchasing the product, or “pulling out the grass” and not
    being willing to buy the product anymore.
    • The core here is to use content-based (video, text, images) social
    sharing to generate purchase.
    RED: A Unique Experience

    • Primarily positioned as a content sharing site, where users can post


    product photos with reviews and tips for other users to read,
    comment, and save to their boards (not unlike Pinterest in this
    regard).
    • In fact, some have described the platform as being a product search
    engine, or “like Instagram and Pinterest sprinkled with a dose of
    Taobao”.
    • Little Red Book focuses on a unique blend of trusted user-generated
    content, word of mouth advertising, and online community-building.
    RED: A Unique Experience

    • Little Red Book focuses heavily on building trust and reliability


    between the platform and consumers, rewarding users for posting
    suggestions and advice to followers.
    • Most popular posts on Little Red Book tend to be author-tagged lists
    of convenient, economical, or easy-to-use products.
    • The popularity of these kinds of posts shows the value of authenticity
    on the platform, with users rewarding influencers for realism,
    accessibility, and being relatable.
    • Avoids many typical e-commerce practices. It doesn’t allow
    anonymous reviews or one-click ratings, for example, instead
    encouraging detailed, immersive product reviews known as “notes”.
    The Social Commerce Aspect of RED

    • First thing first, RED’s own e-commerce has not been doing a good
    job. This is evident from its gross merchandise value of less than 1
    billion USD (2020, compared to $ 34.4 billion for JD and 60 billion for
    Taobao).
    • RED does, however, generated huge traffic to other e-commerce
    stores and thus constitutes a leading example for social commerce.
    • The power of the RED model is exemplified by other Chinese social
    media giants:
    Taobao Guangguang

    • Taobao is China’s leading e-


    commerce platform.
    • Now with Guangguang
    function, it begins to
    integrate RED style content
    sharing, wish list, and
    recommendation system.
    • But complements RED’s
    weakness in supply chain
    and store-base.
    Similarly, other e-commerce giants such as JD,
    Kuaishou, Douyin (Chinese Tiktok)
    Alibaba’s “Foodie’s Notes”

    • A stand-alone app (instead of


    a mere add-on in Taobao)
    • RED style content sharing,
    wishlist, and recommendation
    system.
    • With a focus on food.
    Tencent’s “Qi’e Huimai” and Tiktok’s “Croissant”
    A Western Example: Pinterest

    https://youtu.be/LafxKSbpyZw
    And the business side of it…

    https://youtu.be/N1Gr2DQtpSc
    So, again you see very similar mantras…

    • Content-based
    • Social sharing
    • Personalized experience
    •…
    Thus far…

    • We have explored some most important aspects of social


    commerce using important examples.
    • But social commerce has more comprehensive influences at
    every turn of shopping.
    • Consider the classic Consumer Decision-making Process
    Model
    Consumer Decision-making Process Model

    Post-
    Problem Information Alternative
    Purchase purchase
    recognition search evaluation
    evaluation
    Stage 1: Problem recognition

    • Occurs when consumer sees difference between current state


    and ideal state
    • Need recognition: actual state declines

    • Opportunity recognition: ideal state moves upward


    Stage 1: Problem recognition
    Problem recognition is facilitated by several social
    commerce tools

    • Problem recognition is facilitated by several social commerce tools:


    ‒ Social ads on social networking sites.

    ‒ Shared endorsements from friends posted in activity streams.

    ‒ Curated images and lists on sites like Pinterest.

    ‒ Location-based promotions (e.g., Yelp).

    ‒ Participatory commerce (e.g., Kickstarter).


    • The “planting grass” experiences is in fact also a problem recognition
    process
    “I got grass planted on me again”
    Stage 2: Information search

    • The process by which we survey the environment for appropriate


    data to make a reasonable decision
    Stage 2: Information search

    • Information search is facilitated by several social commerce tools:


    ‒ Comments and conversations throughout social channels.

    ‒ Ratings and reviews posted on sites (e.g., Yelp, Zagat, Citysearch).

    ‒ Product and pricing information tagged to image posts.

    ‒ Social search queries on social network sites.

    ‒ Social sharing of wish lists and gift registries.

    ‒ Conversational commerce (chatbot services).


    Power of search on social media

    • The prevalence and availability of information online, including via


    social channels, have changed the information search experience.
    • 95% of consumers report having read reviews prior to making a
    purchase decision.
    • 66% of consumers read 1–10 reviews before making a purchase.
    • 70% of mobile shoppers are more likely to purchase if the mobile
    site or app includes reviews.
    • 82% seek out negative reviews as an indicator of authenticity.
    • 60% have viewed a review on their smartphone while shopping in-
    store.
    Stage 3: Alternative Evaluation

    • Evaluation of alternatives is facilitated by several social


    commerce tools:
    ‒ Bar code scanning/price comparisons using mobile phone apps.

    ‒ Recommendations, testimonials, recommendation agents, and


    popularity filters.
    ‒ Ratings and reviews.
    Stage 4: Purchase

    • Purchase is facilitated by several social commerce tools:


    ‒ Shop within network options (e.g., Facebook Buy, InstaShop, Snapchat
    Deeplinks).
    ‒ Social shopping malls (e.g., Wanelo).

    ‒ Peer-to-peer marketplaces (e.g., Etsy).

    ‒ Group buys (e.g., LivingSocial, Groupon).

    ‒ Conversational commerce (chatbot services).


    Stage 5: Post-purchase Evaluation

    • You evaluate what you purchased after you did…


    Stage 5: Post-purchase Evaluation

    • Outcome - satisfactory or unsatisfactory, happy or not, repurchase


    intention, loyalty, word-of-mouth (Post-purchase behavior).

    • The final step in which learning occurs based on how well the choice
    worked out.

    • Postpurchase evaluation occurs when we experience the product or service


    we selected, and decide whether it meets/exceeds our expectations.
    Stage 5: Post-purchase Evaluation

    • Post-purchase evaluation is facilitated by several social


    commerce tools:
    ‒ Comments posted on social network sites.

    ‒ Request for help or comment to brand on social network sites.

    ‒ Participation in loyalty program with social benefits.

    ‒ Submission of ratings and reviews on review sites and retailer website.

    ‒ Reviews and product experiences posted on blogs.


    Psychology of Influence

    • Social Proof (People arrive at many decisions by observing what those


    around them do in similar situations)
    • Authority (Authority persuades with the opinion or recommendation of an
    expert in the field)
    • Scarcity (People tend to instinctively want things more if they think they
    can’t have them)
    • Affinity (People tend to follow and emulate those people whom they find
    attractive or otherwise desirable)
    • Consistency (People strive to be consistent with their beliefs and attitudes
    and with past behaviors)
    • Reciprocity (People have an embedded urge to repay debts and favors)
    Psychology of
    Influence

    • Social shopping
    tools and sources
    of influence
    SEE YOU
    NEXT TIME!

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