Abstract
Social media has revolutionized the e-commerce industry. It provides tools to marketers for promoting their products. Strong social media platforms such as Facebook, Twitter, Instagram and Youtube account for a sizeable portion of traffic directed towards e-commerce websites. Social media platforms allow e-commerce businesses to create brand awareness, gain feedback, provide cost-effective marketing solutions and influence customer purchasing decisions. Users actively participate on social media to share product feedback, prices and reviews which allows businesses to analyze the dynamics of current market.
Keywords
SocialMedia, E-commerce, Facebook, Twitter, Instagram, Amazon, Ebay, Alibaba, B2B, B2C, Social_Influence
Introduction
The world has experienced a digital revolution in the past two decades and more than half the population of the world is now connected to the internet. According to statistics provided by (DataReportal, 2022), out of the total 7.93 Billion population of the world, 5.32 Billion own a mobile phone, 5 Billion are connected to the internet and among these, 4.65 Billion people have a social media account (April, 2022). The statistics show that internet users continue to grow at a rate of 4 percent per year which further grows the digital world. The phenomenal growth in social media users has strengthened the e-commerce industry. It has provided a platform for e-commerce sellers for branding and advertising. The paper analyzes the impact of social media on e-commerce.
What is social media and its role?
The term social networking was used to differentiate platforms used for business purpose to those used for socializing. However, with time social networks has included various groups. Social media in particular is considered an application where people can share their thoughts with their contacts, chat with other people, pass their thoughts through comments and get involved in discussions. (Apex University, 2020) Interaction with social media applications has become almost necessary for every individual. Whether it be for entertainment, connect with loved ones, conduct business meetings, trade online or interact with individuals around the world, social media has vast applications.
Social media – A Powerful tool
Social media has an effect on various areas including political, marketing, journalism, business and recruitment. Social media has become a tool to influence decisions and has become a platform to launch movements. It has changed the dynamics of communication and marketing and has brought a revolution for conducting online business.
What is E-commerce? How did it become so popular?
According to (Ben Lutkevich, 2019) E-commerce is the buying and selling of goods over the internet or the electronic transmission of funds, mainly through the internet. There are three types of e-commerce that are popular over the internet: 1) B2B (Business to Business), 2) B2C (Business to Consumer) and 3) C2C (Consumer to Consumer).
Different platforms conduct business in different ways. Like Shopify trades B2B, Amazon is a prime example of B2C and Ebay is the famous example of C2C platform.
While E-commerce amounted to 5% of the total retail sales by 2011, the number has risen to 16% of the total sales by 2020 (U.S Census Bureau) and continues to grow. E-commerce saw a sharp increase in sales with the COVID-19 Pandemic which confined people to their homes.
As applications for e-commerce developed, people saw the ease in using these applications and websites to buy stuff. With its ease of access and user friendly environment, people no longer require to travel miles to buy anything.
Social Media and E-commerce
Social media has become an important tool for e-commerce industry. It is a valuable platform to gather information about consumers and analyze their interests. Social media influences the trends of the market, which has a direct impact on products and services. While e-commerce industry relied on search engines and strong website structure for browsing products/services, social media brought significant change to the industry (Singh, 2018).
Social media marketing is a very powerful tool used by marketers for promoting their products and services. Since almost half of the world’s population is connected to social media sites, it offers a large market for advertisement. The platform allows advertisers to share content in form of content, images and videos.
When a user connects to the internet, a world full of possibilities is available on his/her fingertips. Perhaps, the greatest advantage that e-commerce businesses gain from social media is the integration and compatibility among the platforms.
The provision of targeted audience is yet another advantage of social media marketing for e-commerce websites. Users on social media interact with certain content, photos and videos which is analyzed and advertisements are then displayed according to a user’s interests. This results in a higher click through rate (CTR) and eventually leads to a higher sales rate (Kaur, 2016). For example, a user looking at reviews of mobile phones might see advertisements related to Mobile phones and its accessories available on different stores.
E-commerce businesses can create their business page on social media platforms. These business pages can then be used to share and promote content, share offers and promotions, take valuable feedback from customers and respond to queries. Through social media, businesses can develop a bond with its customers. According to research (CX Sales, 2021), business that have popular social media pages are more reliable and trustworthy for customers. In other words, brand development and recognition on social media is directly responsible for generating leads and revenue in e-commerce businesses.
Businesses share catalogues and links to product and service pages with catchy content, images and videos to influence customers. Social media marketing has become vast and highly diversified. Actors and social media influencers become brand ambassadors of certain products to share and promote content. With their huge fan base and followers, they are able to persuade many people to buy from a particular brand (Big Commerce Essentials, 2022). Businesses link their e-commerce stores on social media pages and share links to their products/services for customers to visit. Product and service reviews are also conducted by popular artists for promotion.
Freedom of speech and sharing one’s own unbiased views has strengthened consumer power. Honest reviews and feedbacks help people build a relationship of trust towards businesses online. Since online businesses are not present physically to be inspected, customers can analyze them through their social reputation (Meredith, 2020). Metrics like how quickly does a page respond to messages, how many likes and dislikes it has, how have people rated the business are some of the ways in which social media rates businesses.
Powerful Social Media Channels for E-commerce Businesses
While there are numerous Social Media platforms, perhaps some stand out when it comes to benefitting e-commerce industry. Following are some social media platforms and how they benefit e-commerce:
a. Facebook
With 2.9 Billion MAUs (Monthly Active Users), Facebook is the most popular social media application. It has become a very important tool for marketing. Almost half (47.87%) of traffic directed to e-commerce sites through social media is through Facebook which is the highest for any social media platform (Clement, 2021). Facebook allows businesses to create pages, shops and events to sell their products directly on Facebook. Businesses feature a Facebook “Like” button on their websites for users to engage with their Facebook page (Geron, 2015) E-commerce sites also host product reviews and feedbacks on their pages to get insights from customers. Shops created on Facebook are automatically configured on Whatsapp and Instagram.
b. Instagram
The photo sharing application has made a huge impact on people’s social lives. From sharing stories, pictures and videos, Instagram has become a fashion statement and trend setter (Bhattacharya, 2022). All celebrities, influencers, blogs and businesses share posts on Instagram making it a lively social media platform. Instagram allows businesses to set up their shops directly on Instagram and experience in app shopping.
c. YouTube
YouTube is video streaming platform with over a billion users. The platform allows e-commerce businesses to direct traffic to their websites in two ways: 1) Through ads between videos and 2) Through reviews and promotional videos (Patel, 2021). YouTube ads direct a large amount of traffic towards e-commerce websites. vloggers have a huge fan base and large amount of followers and subscribers. vloggers have become so influential that they are able to easily persuade their users to buy their advertised products. Through their unique way of selling especially through humorous statements, influencers and vloggers have been able to make content viral. According to statistics, Youtube accounted for 24.46% or 551.31 million users directed to e-commerce websites in 2020 and ranked second after Facebook (Clement, 2021).
d. Twitter
Twitter is another social media platform created in 2006 for connecting people. It used the idea of verified accounts and tweets to gain popularity among the masses. While other social media platforms were covered in spams, Twitter used its algorithm to stand out among popular people who wanted to share their thoughts. Twitter now has 330 Million MAUs. People can share their thoughts in tweets, share images and videos and drop links to their business or other sites. The high large user network allows twitter to attract consumers for businesses. According to a report in 2020 by Statista (Clement, 2021)s, Twitter holds the third position accounting for 9.7% (218.66 Million) of the total pool of users directed to e-commerce websites through social media.
Social Media Factors influencing the boost of E-commerce
a. COVID-19
After the pandemic broke out at the end of the year 2019, people were restricted to their homes and social media usage increased. A surge in social media usage (about 61 percent during pandemic) caused ecommerce industry to grow significantly while the brick and mortar retail sales dropped significantly as stores closed down and quarantines were imposed (KANTAR, 2020). According to (KANTAR, 2020), messaging across social media platforms Facebook, Instagram and Whatsapp increased by 50% during the pandemic. Another study (Absolunet., 2020) shows that 87% of the e-commerce shoppers are influenced by social media.
b. Social Influence
Statistics show that the decision of more than 16% online buyers is influenced directly by social media while almost 45% make decisions after reading comments and feedbacks for a particular product or service. Promotional offerings through social media affects 44% of the online buyers while making decision to purchase online (Builderfly, 2021). The statistics show that while social media may not directly affect a buyer’s decision significantly but advertising and marketing through social media has become a very strong aspect of E-commerce industry.
c. Provision of feedback, queries
Customers are encouraged to rate and review the products/services on social media. Social media users actively take part in providing feedback with their comments, opinions and experiences. This allows businesses with valuable feedback to improve services and products. Positive feedback also encourages other users to overcome reluctance in buying a product/service from a website. (Brand Dignity, 2014)
d. Enhanced virtual experience
Social media has allowed E-businesses to provide a more enhanced virtual experience through honest reviews, providing videos, specifications and feedbacks. Users are now more comfortable to shop online as significant information is available.
e. Cost effective solution to promote on social media
Social media marketing is a cost effective solution as compared to other traditional means of marketing. Many of the tools available on social media networks are free of cost like creating business pages, sharing posts, creating promotional offers, creating shops etc. Another important aspect of social media marketing is targeted advertisements and large pool of users available.
f. Brand awareness
Social media creates brand awareness and increases customer purchasing power. Viral marketing and gaining customer trust through word of mouth increases brand awareness. Businesses with greater brand awareness are more trusted by customers and convert leads to sales at a greater ratio. Gaining customer trust and overcoming reluctance is the key to e-commerce sales (Brafton, 2016).
Conclusion
Social Media plays an important role in e-commerce industry. It shares a significant portion of online users directed to e-commerce sites and provides a cost effective solution and valuable tools for promoting product and services online. Powerful social media platforms also provide e-commerce solutions in-app and give cost-effective solutions for promotion of products/services. The e-commerce industry is replacing the brick and mortar stores. The COVID-19 pandemic paved way for the boom of e-commerce industry as consumers were confined to their homes. Social media platforms like Facebook, Twitter, Instagram, TikTok and YouTube have gained unprecedented popularity. They have become sources of traffic towards e-commerce websites where sellers can advertise their products and set up shops. Social media influencers (bloggers and vloggers) and celebrities also play a significant role in branding and promotion of products. Hence, social media has a significant impact on e-commerce industry and e-commerce is heavily reliant on social media for gaining popularity and sales.
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Download the PDF :https://networkconference.netstudies.org/2022/wp-content/uploads/2022/06/Ali-20550064_-Conference-Paper-1.pdf
Ali 20550064_ Conference Paper 1
Hi Uzair,
Your paper has pointed out really well and has provided enough evidence of what is social media, the top used social media apps, how e-commerce uses social media platforms, and the current size of social media users. Your paper has shown the positive effects of social media impacts on e-commerces, what would you say are the negative effects of social media impacts on e-commerces? who is getting impacted by these negative aspects and how to solve this issue? Are there any customer privacy laws being breached by e-commerces from using social media platforms?
Hi Min,
Thanks for comment. Moving on, Digital marketing uses the term BIG Data. This is the data collected from all the activities that any user does online. Through this, marketers can analyze the trends and behavior of the users. This allows them to effectively market their products. For this purpose, social media applications wish to track your data and also ask you to share your personal information. However, it is not done without consent and social media applications always show disclaimer or ask for user’s consent before tracking or obtaining personal data. I would say, the best way to save yourself from such issues is to read any disclaimer or terms of agreement carefully and always double check before you allow any app to track your information. As for the negative aspects, every product or service made can be used positively or negatively. However, it depends on the user how he would handle it. As for businesses, social media has proved to be a very powerful tool but for teenagers, it has proved somewhat troublesome with addiction and inappropriate conversations and content sharing. Currently, good social media applications follow strict community guidelines. However, there are still scams and schemes active on social media that only one can avoid through common sense and awareness only.
Hi Uzair,
Thank you for answering my questions, you have pointed out good aspects of the impact of social media on e-commerce.
Hi Uzair,
Nice paper! It is true that e-commerce has experienced a boost through social media platforms and has even eased life since things or shopping can be made through these e-commerce platforms. But do you think it is a reliable platform for users be it for brand promotion, shopping, and so on? why?
Hi Pierrine,
Appreciate your comment, To answer your question there are numerous applications of social media. And like any other digital platform, social media is vulnerable to spam and cyber attacks that put people’s security and personal information at risk. While social media platforms have taken measures to reduce spam activity, they have also promoted awareness programs for users to avoid being victim to cyber attacks and scams. Since social media has such an enormous user pool, it is very effective for businesses to promote their brands using the various promotional tools made available. As for shopping, not only do social media platforms allow businesses to link their e-commerce stores social media account and share links of products listed on their store, but also allow in-app shopping. Sharing on social media also allows e-commerce stores to rank better on search engines and reach out to more people! It can be thought of as the most powerful tool for brand promotion, shopping and other activities.
Hello Uzair,
Thanks for answering my question and good job!
Hey Uzair,
This paper written by you is an excellent effort which covers multiple aspects of e-commerce and its impact on the society. However, I feel that e-commerce give more advantage to technologically advanced economies as it offers open competition, thus squeezing the opportunities for underdeveloped/developing economies.
Hi Sumeri,
Open competition may have its pros and cons but, technology has made our world a global village, interconnecting us so closely that distance and boundaries no longer matter. While, underdeveloped/developing countries may face issues in the global market, this has been a great opportunity for them. Due to poverty, these countries have less buying power and are more than glad to tap into the bigger and powerful markets. Here they have the opportunity to sell their cheaper products (mostly due to low labor costs) and earn revenue in foreign currency which benefits them and their country alongside as well. According to a recent news report, Pakistan has become the third largest seller on Amazon after US and China with 1.2 million registered vendors. This shows the power of e-commerce even in developing countries.
Hello Uzair, great effort in dividing your paragraphs into those sections, so helpful, very informative, and well detailed. I also agree that social media changed e-commerce for the better and helped boost businesses online and made online shopping easy, but perhaps also include the negative impacts of social media on e-commerce.
Hi Hiba,
According to my knowledge and research, social media has not impacted e-commerce in a negative way. It can be thought of as a tool to help boost e-commerce. The negative impacts can be bad reviews, fake news and debranding. However, all of these are part of the game and good businesses know how to avoid such impacts and use social media effectively to boost their business online.
Hi Uzair,
The paper is wonderfully written. I really like how you took each social media platform and given details about them individually. Yes, I do agree how COVID-19 has greatly impacted social media in relation to e-commerce but what I would like to know is: If Covid-19 did not take place will a boom in social media presence take place and how will that influence e-commerce and up and coming business’s?
Hello Sazim,
Thankyou for going through my paper. In response to your question, if COVID-19 did not spread and create specific circumstaces of confining people to their homes, social media and e-commerce would still get popular, but in a longer period. COVID-19 acted as the perfect catalyst for social media and e-commerce. Infact, during the pandemic, people realized that almost everything could be done online from working to shopping. However, even if the pandemic did not occur, the trend of rising user base of social media every day would have continued. Hence, we would reach this point of social media interaction at a later time.
Hi Uzair,
Your research paper on the impacts of social media on e-commerce is insightful as it provided a detailed view of how various social media benefitted e-commerce. I completely agree that social media has been a very crucial tool for the e-commerce businesses.