The Rise of Social Commerce

Since its launch in September 2023, the TikTok Shop marketplace has emerged as a formidable player, boasting major sales figures and capturing the attention of millions of users worldwide.

In November, YipitData found that people spent an estimated $363 million on TikTok Shop in the US, up from $260 million in October. That’s a $4 billion annual gross merchandise value run rate, only months after its launch.

So why has TikTok Shop done so well? It’s interesting that as television shopping dwindles in popularity, this new, arguably similar version is thriving. In this article, Propeller will explore how TikTok Shop is transforming eCommerce. Learn about the integration of shopping features directly into its platform and the implications for traditional retailers and eCommerce giants.

What is Social Commerce? 

Social commerce describes the selling of products and services directly through social media. With social commerce, the entire shopping experience happens on the same app. That means customers move from product discovery and research to checkout, all on one platform.

Social commerce has become an unstoppable force, making its mark across all major apps: Instagram, Facebook and now TikTok. The birth and growth of social commerce dates back to the early 2000s, with Yahoo! And Facebook introducing it to the world.

Facebook launched its marketplace in 2016, and welcomed a new wave of commerce: now known as social commerce. With Facebook Marketplace, brands can list their products and enable shoppable capabilities, making it possible for users to purchase goods directly within the platform.  It has been so successful that in 2024, over 485 million, or 16% of active users on Facebook, log in for the sole purpose of shopping on Facebook Marketplace.