According to PayNXT360, social commerce industry in United States is expected to grow by 21.4% on annual basis to reach US$62919.7 million in 2023.
The social commerce industry is expected to grow steadily over the forecast period, recording a CAGR of 15.0% during 2022-2028. The social commerce GMV in the country will increase from US$62919.7 million in 2023 to reach US$145228.2 million by 2028.
In the United States, the social commerce sector is poised to record strong amid the growing investment from social media platforms and retailers. Over the last few years, leading social media platforms have launched a plethora of social commerce capabilities onto their platform. Pinterest launched the Shopping List feature, Twitter launched Twitter Shops, and Snapchat introduced AR filters to make the buying experience more experiential.
Furthermore, amid the growing shift from e-commerce shopping to social buying, more and more leading brands are forging strategic alliances with social media platforms to drive consumer engagement, sales, and revenue in the country. The growing interest and investment in the sector, coupled with more than 76 million social commerce buyers in 2022, are projected to keep driving the industry growth in the United States over the short to medium term.
Domestic and foreign social media platforms are delving deeper into the social commerce space
Amid the increasing competition in the space, social media platforms have continued to increase their investment in developing and launching innovative features that can accelerate their growth in the segment.
- In November 2022, YouTube, the social platform owned by Google, announced that the firm will increase its investment in shopping programs in 2023. The investment is part of the firm’s strategy to capture more market share in the social commerce space. The firm also rolled out an affiliate marketing scheme in the United States. Currently, in its beta phase, the widespread rollout is projected in 2023.
- TikTok, another leading player in the space, announced the launch of in-app shopping capabilities in November 2022, as it seeks to deepen its footprint in the United States market. The firm first launched the Shops feature in the United Kingdom in 2021. The launch in the United States comes at a time when TikTok is looking to make a bigger push into the e-commerce market that is dominated by Amazon. The firm is also planning to open fulfillment centers in the country to accelerate its growth and compete with Amazon.
From the short to medium-term perspective, PayNXT360 expects more social media platforms to invest in the space, which will keep driving the competitive landscape of the United States social commerce industry.
US-based retailers are launching new features to drive their social commerce capabilities and growth
Amid the surging cost of living and rising inflation, major retailers such as Amazon have projected flat growth from the short-term perspective. Consequently, to drive consumer shopping activities, these retailers are launching new features and shopping experiences in the United States.
- In December 2022, Amazon announced that the firm is planning to roll out a TikTok-like shopping experience on its platform. The launch of the new feature is aimed at generating more interest from young generation Americans, who are enticed by short-video formats. Initially, the firm is planning to roll out the feature for selected users in the United States, before rolling out the service in the global market.
- Alongside Amazon, Walmart is also making big strides in the social commerce segment. In October 2022, the firm announced the launch of a new creator platform. The platform provides content creators with tools, thereby allowing them earn commission by selling products on the platform. The platform is still in its beta stage, and the firm is projected to roll out the service fully in 2023.
PayNXT360 expects these retailers to further increase their investment and innovate in the space over the next three to four years, as the social commerce space continues to grow and gain prominence among brands and consumers.
Marketplace sellers are shifting to social media channels to reduce their reliance on e-commerce platforms
In the United States, a growing number of marketplace sellers are seeking to reduce their reliance on major e-commerce platforms, as they wish to diversify their sales avenues in the country. While this can have a seismic impact on the growth of the B2C e-commerce sector, the trend is having a positive growth impact on the social commerce industry.
Many Amazon sellers have turned to social media channels to promote their businesses and boost sales in the United States. One of the major reasons why sellers are switching to social media platforms is the high commission charged by e-commerce marketplaces such as Amazon, Walmart, and eBay. Furthermore, as the economy continues to face macro challenges, fewer sellers in the country are willing to stake their fortunes entirely on one single platform.
The need for diversification and commission-free sales generated through social media platforms is projected to keep driving more sellers to social commerce capabilities, thereby assisting the overall industry growth from the short to medium-term perspective.
This report provides a detailed data centric analysis of social commerce industry, covering market opportunities and risks. With over 50+ KPIs at country level, this report provides a comprehensive understanding of social commerce market dynamics, market size and forecast, and market share statistics.
PayNXT360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view on emerging business and investment market opportunities.