Online shopping has been popular ever since we have the internet. It's so easy to buy products without ever leaving the comforts of your home. But there is a new way people are now buying online. And that's through the various social media platforms instead of buying from traditional websites. Social commerce is the intersection of social media and e-commerce, where businesses leverage social platforms to engage with customers, drive sales, and enhance the shopping experience.

In this week's talk, Amit and Rinat talk about Social Commerce, what it is, how we can use it, some examples and a lot more!

Hi, everyone. Welcome to Tech Talk, a podcast where Amit and I we talk about various tech related topics. We don't just talk about gadgets and very detailed tech we also talk about all aspects of technology and how it relates to social and commercial side of things and ethical responsibility and all everything that's related to it. Today, we're gonna talk about something called social commerce. I'm very excited to talk about it because I have no knowledge about it at all. Curious to know more from Amit, thank you for suggesting it Amit this topic. I know we have talked about e commerce and we are always interested about how tech relates to commerce all together. So I imagined social commerce would be a very sort of thought provoking topic to talk about.

Well, it's not as thought provoking as you make it sound. And the funny thing is that you already are familiar with it. You are just thinking in the wrong direction. So let's start with the basics. So again, thanks a lot for the introduction. So we have already covered a podcast on E commerce and just wanted to revise what e commerce is for the benefit of everyone. When we do shopping, we normally go to a physical store and we buy a product. So that's normal commerce. So you buy you pay for goods or services and you buy it. So that's something physical, something tangible you go to a shop. Now suppose the shopping online, then you buy it using a credit card or a debit card online. So that's e commerce, electronic commerce. Anything that's done online, is essentially ecommerce. So now what is social commerce? So social commerce is nothing but commerce that you drew on social media platforms? So you shop on Facebook, you shop on Instagram you shop on Tik Tok? So that's social commerce. And why is it popular? What does it mean? Why is it I mean, why people are so excited about it, et cetera, et cetera, is what we will talk about in this podcast. So Rinat, I think that makes sense now. It has got nothing to do with charity.

Yes, no, now it's all making a lot more sense now. But again, I would challenge Why is it called Social Commerce because social just the word social should sort of relate to the social side, doing everything together. You know, helping out your neighbors and stuff like that. And social media commerce, so it probably would have been a descriptive name, but hey, however, sort of

Yeah, I think you have a good point. But I think in the charitable sector, you as you as you mentioned, if you want to do something for social, you normally don't charge money. And even if you do you try the commerce through an online portal. So that's still essentially ecommerce. So the social part is not like targeting just social applications. It's social media applications. So that's why it's social commerce. I could be wrong, but that's how the word has picked up. And now it's across all platforms. And I think the pioneer in this would be the meta platforms or even Pinterest, I think Pinterest was the first but meta platforms which includes Facebook, Instagram, and WhatsApp. They are quite pioneer in this field now because they are doing a lot of push in these products to enable people to shop from their platforms. So let's rewind a bit. So let's look at shopping. So shopping was predominantly done physical stores, then it moved online, so people could now sit on the computer and buy product and the same website you could open any mobile phone. So now you could shop on your mobile phone by going to a website. But imagine Nike is a shoe company and you buy Nike shoes, but instead of going to a store, you buy it online, you can use coupon codes. You can use some discount codes etc from some places, and you can buy a good pair of Nike shoes. Now imagine Nike has a Facebook page. And Nike also has an Instagram page. And Nike also has a YouTube channel so we are forgetting YouTube. YouTube, we don't consider it completely social but it is still a part of social because a lot of users are still logged in specially premium users. So anyway, so if you're a Nike customer who has a Facebook and Instagram platform, now you have a page, a business page on these platforms and through that business page, you're promoting goods and services. So now you want people to come and buy your product. Now there are two ways to do it. One you click a link and you go to their website and you buy it. The other thing is, you click a link and you stay in the app and you buy the product inside the app. The main thing is where would that scenario occur? That scenario would occur when you're on a mobile phone. It doesn't matter if you're on a computer or a laptop. But when you're on a mobile phone, you don't want to leave the app and then come back again. So a lot of these, a lot of these social media apps now have something called the in app browser. So the browser actually opens inside the social media app. So if you click on a link in Facebook, it doesn't open your Android browser or iOS browser, like Safari, Android you have Chrome or Samsung, It doesn't open. I mean, it might be opening it. But what it does is it opens a browser inside the Facebook application, the Instagram application, TikTok, LinkedIn applications and through that, you now then buy a product.

Yes, this is actually I mean, I've obviously leaving it for all these you know, more than a year now these things started happening slowly, slowly within all of these platforms, but it's good to sort of put some spotlight on it. So we know, you know, as consumers, we're more aware of what is actually happening because we keep browsing in mobile phones whenever we click on a link and I have noticed it like I think, I mean, relatively I don't know when it actually started but I think more or two years ago, but maybe it started a long time ago. I had noticed that it is somewhat different and sometimes you have to log in again because I thought I was already logged in my Samsung browser in Facebook, but you know, I click on a link and send in messenger but I still had to log in and I was like, why am I having to log in and then I noticed that oh, this is actually a different browser altogether. So the cookies are not even shared between them. So yeah, these are these are interesting developments that are happening very slowly and a lot of the times we don't notice and it doesn't sort of it is making our lives easier. In a way but it still is important for us, you know, everyone audience, me and you, you know, consumers to be aware of how these changes are happening and how we're going to be spending more and more money on online but yeah, as you explained this, you know, social commerce or social media commerce, I immediately thought of Facebook or meta because pay per click or ad revenue could only make you so much and that's the main source of income for meta. And I would imagine they would be you know, would have the highest invent incentive to monetize their highly, you know, used platform. And how could they do it, they now have that way of sort of in app or in browser sort of purchasing, you know, I don't know if Facebook marketplace would be part of that. But you can go to as you said my key brand page and make a purchase of their products right there. And then you can do it on YouTube, and all the sort of social media platforms who are all fighting for attention from people they don't want you to leave their app but they also want it to be in the consumers to have that sort of interaction if they want to purchase something they don't want to block it. So how what is the solution? This is what we've kind of come to them with the advantage of tech. Very interesting. Indeed.

Yes. So I think you have rightly described these platforms want people to stick to their app. So like Facebook wants people to be logged into Facebook Instagram wants people to be logged into Instagram, WhatsApp Pinterest, Snapchat, Tiktok. They all want the users to stay on their platforms. No one. Good.

Quick sidenote, Pinterest isn't it? It's not P-interest.

Pinterest, sorry. I don’t Use that app a lot so. Thanks. It's Pinterest. I've been not been interest. Anyway, so I think the whole idea is that these apps want you to stay on them. Now, the main when these social media apps were created, their source of revenue was advertisements. So in order for people to for companies like Facebook, and say Instagram, and Snapchat and Tiktok, Pinterest, they all had to make sure that the users are able to see the ads. So in order for people to come on the platform, and then see the ads that's how the companies start making money. Now, you have a threshold of ads that you can show, you have a threshold of number of users who are using the platform. So how do you make people to stay on the platform even more? So you've already introduced the social aspect where I can see your profile, I can see the photos, I can see your videos, I can see what you're posting about. So I'm constantly engaged with you. And I'm not just engaged with you. I'm engaged with like 700 people. So I have a feed now. I can constantly see that. So I'm already engaged. Then I'm like, Okay, now I'm already on the social media platform where all my friends are. I want to now I love Nike, I wear their shoes. So by the way, disclaimer, we are not promoting Nike in any way. It just an example. So let's say that I love Nike sport shoes, and I post a picture of the Nike shoes, and you then quickly click on it and you say, oh, Nike shoes, because you've never heard of those shoes, and you try to go to their Facebook page. And then you try to look at the things and then you want to buy something. So now you go outside the platform. So these companies, social media platforms thought, Okay, why do you want to send people outside the platform? Why can't we make people buy the same thing inside the platform? So that's where the commerce started. kicking in. So that's where, Facebook marketplace came, Instagram reels cam, TikTok videos coming, and then influencers, user generated content. So these are all the topics that you keep hearing about, but these are all the things that evolves slowly and gradually. So that people could stay inside the social media app, and then buy a product. And most of the social media apps have lost their original purpose. So now you do. I mean, you might go to Instagram to checkout your people, people whom you follow, but most of the times you would go on Instagram, to look at the recommendations. And while you're looking at the recommendations, you click on something and you get a sponsored content, or you get a sponsored video, and if you click on the video, they will normally be a Buy Now button and you click on Buy now and you could quickly buy something very easily. The other thing is like a people, people like us we are we can be considered as influencers because we are trying to influence people into learning about technology. We are not there yet. We are not making a lot of money. Actually we are not making any money. But the good thing is that now if we recommend a product, people might actually try to google it, try to look for it, and then try to maybe buy it and we are just recommending it because we like because we've used it and we like it. So now this is us. It says a social recommendation people whom you follow are recommending you so it's kind of like influencer marketing. So suppose I have 10,000 followers. I can I can now promote a product of a brand because it's now a free marketing for them because they don't have to spend a lot of money on marketing. They just pay influencer, an influencer, just post about this product. on their platform and a million users or 10,000 users can quickly see and buy it. So there are these all these things that you have Facebook Live, you have Instagram Live, you have TikTok live. So all these means that you can now directly engage with the influencer or a celebrity in real time. And they are trying to promote a brand or something. And now you in that live video session or anything, you can then buy a product. So the whole aspect of like going onto social media platform to actually engage with users has now taken a backseat. And it's more about okay, what can I find? What can I buy, how quickly can I buy etc, etc. And these platforms are pushing it in that direction. If you look at Instagram, it was all about photos. Then it became videos because TikTok came into the picture. The videos became reels the reels have now gone into like live streaming and Insta Live, etc, etc. So it's a whole new level and same with Facebook, you have Facebook marketplace. You have Facebook business page, your Facebook shopping page. So these are all taking even in WhatsApp, you can actually host on your if you have a business account or WhatsApp business account in your description. They can click a link they can see a list of products and they can actually buy those products from inside WhatsApp.

Oh, I didn't I didn't know that.

I've seen that. So all these platforms, social media platforms where you are revered we are trying to engage with people whom you know you want to follow are now trying to sell you a particular item. So if you like say follow a celebrity, say Tom Cruise or say Steven Spielberg or someone and they're trying to promote some content. So that's again, this and we actually forgot about Twitter, Twitter. I mean you I mean, it's a you can say that it's part of the social commerce there is no like, tweet live or something like that. And there is no Twitter videos, but you can still see sponsored contents through advertisements, and someone can still recommend you products like okay, hashtag Nike hashtag this…. And through that hashtag, they're actually promoting that content. So maybe you can’t buy directly from Twitter, but you can still engage. So I think the whole thing is buying by staying inside the app. But now why is it so popular? Why e commerce is not that popular compared to social commerce? And why all these platforms are targeting these users? Firstly, you have to understand who's buying so the millennials or Gen Z whatever you call it, they are buying and where are they? They're on mobile phones. What are they doing on their mobile phones? They're constantly on social media apps. So these are the people who want to buy something because they get the prints very easily. And they're constantly talking to each other and they are thinking about okay, if he has that. It might be good. I need to have it. How can you quickly buy that and you go on recommendation. So if Rinat recommends me that okay, I have a road bike, and I like the sound coming from his video and audio. So I will say okay, I want to buy the Rode mic or I want to buy the camera that he has. Just because I know you and I follow you. And I trust that you have invested in something good quality. So now just by interacting with you, I want to buy something of value off of something that's valuable to for me, but through the social media. So this user engagement is quite popular because if you go to a Nike website, you will not see any social media recommendations.

Or Adidas…ha ha ha… just leveling the playing field

or any other brand I have a new Brooks shoe so if anyone who runs they can go to their website anyways. But the idea is how often would you go to their website and buy something? Because most of the time you would go to Instagram you would see somebody wearing that shoe and then think about buying it rather than going to the website and then researching about it and then going to 10 different websites and then researching more and then trying to buy the product. So it's all about how can I buy quickly and most of the people now buy based on recommendations based on referrals. So shopping is now happening.

That is that is good point that I think you know, there could be so many negative or controversial thing to say about this this progression. Or advancement you know, there are many ways people are being manipulated, that data is being collected etc etc. But I think one thing that could be looked at as a as a positive thing that is happening is that we're starting to get micro influencers So the whole point of you know, the more distributed wealth is that we don't have we don't want like these mega celebrities becoming influencers and yeah, I mean they could be you know, just the regular person you know the gallery guy next door and became you know, like made himself made rich person by becoming influencer. But so much better than that is micro influencer who has on the few, you know, a few 10s of 1000s of followers and they have more genuine interaction with their followers. They're covering and niche topics and making some income out of it and also doing genuine you know, sort of product reviews and recommendations, etc. So this is that that's a lot more sort of, sort of genuine, is the only one I could think of and the wealth is not now again because of like millions and millions of followership not one or a few people are getting again, you know, disproportionately rich, rather, there are more influencer with modest amount of followership. So the wealth is again distributed more and more in this way. So I think that's the that's one of the positive, maybe only few positives, but this is one of the very few positives that I can think of. In with this kind of advancement in commercialization of our time.

Yeah, I think one of the key things for this change was the advent of the mobile phone, smartphone, and cheap internet cheap data, which was available across so now you connect a lot of people and people who are poor can also now come online, and they have ideas and they can have their own viewership, as you mentioned, like even poor people can now participate in this kind of commerce and they can now start trying to influence people online and I've seen many influences like that. I mean, you can't call them influencer. They but they have a following. So they are not they don't brand themselves as influencers, but they have a following because they are very unique. And it provides a very unique perspective into their lives and what they do, etc. So I've seen such kind of platforms, sorry. So people on these platforms. Now, another thing that's driving this growth in this space is also because of the user data. So as you mentioned, the data is quite powerful. So now imagine I go and buy a Nike shoe. Say Adidas, I go and buy Adidas shoe, online and now when I go to the website, I will enter my details like name, address, email address, and phone number, and I'll give my billing details and then I'll check out and I'll buy the product and leave. Now. The people who are actually monitoring the analytics on the website, they cannot see what's my age, what's my buying preference, where I'm I mean, they have to their address, they can decide where I'm living, but they don't know what I like what I don't like I just bought a shoe. And these are my details. These are not enough. Now imagine that same person now goes on Facebook, and that person from Facebook buys product on the social media on Facebook itself. Now the business knows not just my name, phone number and email address. They also know what I like what I don't like whom I follow who might not follow. So now they can target me. So this is now targeted, advertisements or targeted marketing etc. So now they have more control over home that are targeting and what they are targeting. So they are like okay, for the age group between 20 and 30. We will target these products but for 30 and 40 will target something else. And that's again, very specific and very niche because now they have the data from the social media platforms. So it's a way where you can engage so it's a it's a good thing because I don't want to see products which are meant which are not for my age group or which are not for my taste. So I want to buy something which I like so it's in a way it's

there is absolutely benefit intended. As much as we always go against that okay, why did you big be so creepy and get my data and give me personalized ads that actually they are Good,

exactly

what we want to we want to make. What we want to buy so yeah there is benefit, undeniably benefit

Undeniably, you end up actually buying the product. So now you follow an influencer so I follows Elliot Kip Joe gay is a marathon is one of the world's best marathon runners. He wears a Nike shoe and I if I want to become I mean, if I follow him, I want to buy a Nike shoe or the shoes that he's actually wearing. It will not suit my running style or my photo or anything but I still want to buy it. And it's that aspirational thing. And just because I like I might see advertisement of elite keeps Yogi wearing that shoe on my social media feed. And that's how you get targeted. It's I mean you can say that it's a bit creepy, but in a way you are being served what you like you're not being served what you don't like, like follow I don't follow say swimmers, so I should not be recommending I should not be recommended swimming products. So something like that. I'm just giving an example. I love swimming. But yeah, but just giving an example you know,

You know, and this also this actually this example actually makes me think of the negative side of this, whole thing as well. Because I'm always being sort of displayed products and content of the things that I am it's not just a I mean we know about the term echo chamber, you know, when you go on YouTube, you just keep seeing the content you're like etc. But now it's you know, multifaceted echo chamber where even the things in marketplaces that you would buy would be I mean, obviously, as you mentioned, we like swimming actually. But say you didn't you know in real life you didn't know how to swim, but it's something that would you would have been inspired if if you had, you know, maybe the reason you don't like swimming is because the water isn't always cold. And then maybe you would have been inspired if this new technology swimming close that came out that keeps you warm. But you never actually saw that ad because it wasn't relevant to you so you never actually took up surfing so you never actually came out of your comfort zones because of the lack of you know, the sort of the variety in the content that one was usually getting in 90s or 2000s those in those times, you would go outside and you know, go outside to buy a pair of shoes and then there are other shops right next to it and you would, you know, end up browsing other products that you didn't think about that you

That's not happening now. So negative to that as well as much as we want to either highlight the positives, but yeah, those are two sides of the coin.

Yeah, actually, it's something like reinforcement, right? So you have a certain views, and you keep reinforcing that same view. And the algorithm learns that and it keeps recommending the same thing again and again, think that your beliefs are not true. And because you're constantly getting fed by that whole thing. So let's take for an example, I talked to you about a Star Wars series, a Mandalorian. It's currently running Season Three on Disney plus. And we were just talking about it. My Google Home speaker is next to me. I'm pretty sure that it's listening. What I'm saying even though I've not asked it to listen, because I've not engaged I have not said those keywords. Now, and it has it has occurred many times now or you're chatting about something with your friend on WhatsApp, and you certainly get a recommendation on Instagram. How are they doing that? So they are human may not be doing it. But there is an algorithm that's going through everything and they recommend based on your conversations based on your chats based on what you're talking and always listening.

WhatsApp do boast about end to end encryption. I would be very disappointed if that happens out of WhatsApp.

It does it does I mean try something and I've seen the recommendations coming in your feed. I've once I talked about Mandalorian to my personal trainer, and the next thing is and we were doing we were on a video call. And the next thing he tells me that he is seeing Mandalorian on his Instagram feed

okay, but then there's always gonna be that question I mean if I type something on WhatsApp, is it my Samsung keyboard that's also listening. I mean, then if I say something here with you in zoom I don't know if Alexa is also listening or which electronic smart device is actually doing the spying. You know, you're surrounded by spies. You can never tell.

I mean, see the thing is that spying is okay. But if you do something with that information, then it's wrong. I mean, okay, a lot of companies are collecting the data. They will eventually collect it and we are giving it to them for free because they are giving us these amazing applications. So in case we don't give them what happens, someone else will collect. So somebody's always collecting it. Now that equation is what do they do after collecting that data? Do they sell it to prove the product good, because we are we are benefiting from it. But if they sell that data to target us to take money from our pocket, etc, etc, then that could be considered as a negative connotation of this whole thing. But again, again, you're benefiting from its. After selling data to someone they target you with a specific ad. And you found that ad beneficial to your tastes.

But the problem is this is not consented client business transaction, I didn't consent to that benefits. In return off my data. So you know, when you have a business transaction, you have both parties needs to be fully aware of what they're giving, you know, usually money and what they're getting, usually product but in this scenario, it's not consented.

We're getting a product or service or some application, and we're getting it for free. So even like Google Maps, if you use it uses a lot of recommendations, right? It tracks the history, the historical data, what you're searching for, and then it starts recommending YouTube also does that it tries to recommend videos that you constantly watch and based on that it will tell you or the it will recommend videos based on the video that you're currently watching. Not currently watching so if you're watching, say a warren buffett video, it will give you some Warren Buffett videos on the site and some videos of channels that you already like. So the algorithm works in mysterious ways.

Yes, unpredictable in some sense, but it works.

So that’s how These companies are making billions and billions of dollars. But the key thing to connect everything is a smartphone. And that's why it is now very, very crucial that shopping has now shifted from buying on a website to buying from a social media app because of the smart phone.

So this makes me think what happens to the payment gateway and all the other things shopping cart and all of that.

They're still there. But they're integrated now into the social media application.

So they're collecting even more data as we go through the buying process.

Yeah, which card do you use etc? Yeah.

Yeah. And But that aside, you know, like the individual websites like, say, for Adidas or you know, whichever company if you go to their website and then make a purchase, you know, you add something in their shopping trolley. They can analyze how many people have what product in their shopping trolley and didn’t finish their order. Or how many people came back and then they also have collaboration with other payment gateway providers like WorldPay or stripe, etcetera. So all these things are now being again concentrated with Facebook and Tik Tok and Instagrams. So what mean, that means is that less diversified, but less diversification of my money is there's less like fewer companies are getting the money before there was the website the actual seller and then the payment gateway would get some money in the credit card company would get some money, you know, the delivery company, The card board box creator, seller but you know right now the payment gateway and everything, you know the web designers would get some money for creating there. Now all of these are becoming obsolete. So it's again becoming more concentrated and tiktok and Facebook are becoming…..

But that's an evolution like if you consider a smartphone its consolidation of Walkman or camera. Credit card because you have a wallet, a navigation device, a music system, a calculator. So it's a consolidation of many devices. So it'd be so and it has obliterated all these companies in one single shot because it has now so useful. So similarly with these powerful apps. You're right. I mean, some of the developers and other things were developing websites, they may not be needed, but there is still a requirement because a lot of people still buy from shops. There are not many people who buy who are on social media platforms. There is a specific age group that is very active on social media platforms, and that is why and their spending power is quite high. So that is why this is now very important. But that doesn't mean that the websites are not important. The payment gateway providers are not important. And these are all integrated. So it's not like Facebook is just providing a platform to enable you to target a customer so that they can buy your product. It just another way to target a customer through PDR like broadcast a radio, through music videos, through videos sources like television ads, or through print media, say newspaper ads, etc. So it is just another way for you. So Nike is not going to suddenly stop and just focus only on social media. No, they are going to sell it from all different platforms because there

This is an added channels for selling in that case Yeah, that's not a bad thing at all. Actually that's even better because the more people involved on more jobs, etc.

Exactly. It's not going away but yes, you're right. There is a consolidation because there are only certain social media apps that are very powerful. And they are the reason they are powerful is it's a network effect. The majority of the people wherever they are, they will go there. So like when WhatsApp introduced their privacy policy or updated their privacy policy. Suddenly everyone went to signal but most of the users were on already WhatsApp. And nobody wanted to install another app and go and use signal. So what happened? Eventually people move to signal but all those people again came back to WhatsApp, because all the users were on WhatsApp. So it's a network effect as well. So wherever the maximum number of users are, you will tend to use that platform. So orkut was very powerful, very popular, but Orkut was very popular only in certain countries. And then Facebook kicked off. And Facebook took away all the users from orkut to its own platform. It's a company how they do their business and it's like evolution, right it's like things and

evolution also capitalism.

Capitalism but It happens right because the technology develops you have that means so why not promote it that way? It convenience as well. I don't have to go through to 20 different apps to buy something I can have just I don't have to even go to Amazon now. I can just buy something from Facebook. So imagine that, but it doesn't mean that Amazon is not popular. Amazon is still popular. It has its own purpose.

Actually, yeah, being honest. I've never actually been even though I knew this existed, but I've never actually gotten through the shopping process, the journey of buying something through the app, so always just look and listen to everything. I just end up going back to Amazon and see the most popular one over there.

Because Amazon provides you that say same day delivery service, they provide you better, they have more reviews, etc. So on social media platforms, sometimes when you click on something, it's sometimes difficult to see the reviews, because it's maybe hidden inside the comments. So pros and cons of different platforms, and then you think what are the next step? So the next step is the evolution from E commerce. Social Commerce is V commerce virtual Commerce on metaverse. So we talked about VR AR metaverse. So now imagine you have the currencies web 3.0 decentralized economy, but people are still going to buy something but they are going to now buy in a virtual world. So that virtual commerce

That would be another interesting topic for us to cover as it progresses as we track it. But yeah, this was actually quite an eye opening and I actually also thought provoking even doubtful in the beginning, but no, this was actually a good conversation to have a lot to learn about and a lot to think about as well and hopefully audiences felt the same way. And then any comments or any sort of views perspective that you guys might have listening to us, please do reach out and share with us? Maybe we'll share those or reply or comment on those, you know, future podcasts, as well as also feel free to contact us giving us more topics to talk about or if you want to come to our show as a guest you're more than welcome. So all of our contact details are in whichever platform you're viewing, so please feel free. This was actually a really good topic, Amit, thank you for coming up with it. And yeah, very much enjoyed talking about it.

Thanks a lot Rinat. And I hope our audience now understands what social commerce is, and they are more mindful. I mean, I'm not saying be careful. Just be mindful of what you're doing online, and how these platforms influence you. So thanks.

Absolutely, Thank you all