Did pandemic isolation fuel the rise of social commerce?

Did pandemic isolation fuel the rise of social commerce?

Staff Writer
Staff Writer
Pinduoduo Content Team
January 18, 2021

Social commerce could be the next big shopping trend globally after the interactive format got a boost from the pandemic and its pioneering success in China, the world’s biggest e-commerce market.

“There is a quiet revolution happening in social commerce that a lot of us aren’t talking about yet,” Jason Davis, associate professor of entrepreneurship and family enterprise at Insead, said in an interview with Rishaad Salamat and Haslinda Amin on Bloomberg Television.
“This trend really took off in the pandemic as so many of us have been stuck at home and craving social interaction that the idea of shopping with others has really taken off.”

Read: The rise of social commerce in China

He cited the example of Pinduoduo as one of the pioneers of social commerce, which he defined as “any form of e-commerce that leverages social interaction to convince us to buy things.” One in four respondents in a McKinsey & Co. China survey published in September 2019 said they had made a purchase directly through a social channel, an increase of 3.6 times from two years before.  

Pinduoduo’s model of social commerce differs from those of internet platforms in the West, which are dependent on influencers to drive sales, Davis said.

“What’s interesting is that vendors are not reliant on those people (influencers),” he said. “Whereas if you look at Instagram the influencers are the most prominent people, even more prominent than the brands.”

Read: Is the Pinduoduo model right for Southeast Asia e-commerce?

Pinduoduo’s success with the social commerce model has inspired major Chinese online marketplaces to copy the company, as well as those in Southeast Asia, according to Tech in Asia.

“This new form of e-commerce has captured a sizable portion of the market, the report said. “It’s also generating buzz in Southeast Asia, with prominent players like Shopee and Lazada as well as startups like Ezbuy testing the waters.”

The report noted Pinduoduo’s pioneering of the team purchase model, in which groups of people can band together to purchase an item at a lower price. Social sharing is encouraged and helps the e-commerce platform learn about the users and their social networks to make better recommendations in the future.

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