<SOCIAL
COMMERCE>
Social commerce is a new
word used in electric business which means ‘social network + commerce’. Social
commerce is an internet site that sells products or services at a very cheap
price with the concept of daily deals and group buying through social networks.
These days, social networking service (SNS) is widespread through almost every
people. Many people rely on social networks to guide their purchase decisions
and share their purchases on social networks. Because of this trend, social
commerce is rising up and influencing the way we spend for online shopping. It
has many good points and bad points both for buyers and sellers.
^ A front page of ‘Coupang’, a famous social commerce
site in Korea.
We can think about good
points of social commerce in the aspect of consumers. There are three good
points for consumers. The first point is that they can buy products or services
at extremely cheap prices. Because people buy products through group buying, they
can get a huge discount. When you go to the sites, you can easily see words
saying ‘50% off’ or even bigger discounts.
Also, the range of
products or services they offer is very large. Especially, consumers can buy
coupons for services such as restaurants, nail shops, hair shops, resorts,
airplane tickets, travel package, etc. It is very good for consumers because
original online shops do not sell coupons for restaurants or hair shops.
Finally, buyers can
easily get information they need through SNS. As I said, many people rely on
social network when they make purchase decisions. Through SNS, people can get
reliable information from their friends. Not being misled by exaggerating
advertisements, people can get real facts from their friends’ posts about their
purchases.
There are also three
good points of social commercial for sellers. First, social commerce can make
them get profits in short time through their low-price high-volume policy.
Because of group buying, the price is very low, and those daily deals of
low-price make them more appealing and time-limited.
Next, social commerce
can be a start point for new enterprises to enter the market. Originally,
market entry is very difficult for new enterprises because early promoting
costs a lot and it is very hard to make people interested about new brand or
new product. Social commerce makes these things easier for starters. Because of
the cheap price, they can draw people’s attention.
Lastly, marketing price
is very low because consumers themselves promote the products or services they
have bought through SNS. With minimum marketing expense, the effects of viral
marketing through social network can be very powerful.
From these good points,
you might think that social commercial is perfectly good for us. However, there
are also several bad points. The bad points of social commercial for consumers
are like these.
Firstly, some products
or services offered by social commerce have low quality. Especially, some
services shops discriminate ordinary consumers and consumers who bought coupons
through social commerce. Also, some restaurants lower the prime costs of their
foods for coupon users.
^
Result of a survey conducted by one TV program
Secondly, social
commerce can promote impulsive purchase. Because of daily deals, consumers tend
to buy products in a hurry even though they don’t need them.
The last point is that there
are many restrictions for consumers. The time able to get a refund or exchange
is too short for consumers. Also the restrictions for coupon use are too
inconvenient. Many coupons have very short term of validity or have too many
conditions for the use.
In another aspect, there
are three bad points for sellers who do their businesses in social commercials. First, it is becoming too
competitive. There are too many competitors at social commerce sites. Making
differences between those sellers is very difficult. Because of this, many
sellers cannot survive.
Also, for service
industry, except for big franchise enterprises, most of small service shops can
earn loss. Selling products can earn profit because they can sell as many
products as possible at low price. However, small service shops cannot have too
many people in their shops because they have limited space.
Third, the commission
fee for entrance in social commerce site and the exceptionally low price seller
have to offer can be a burden for them. Although they can earn profit once they
draw consumers’ attention, it is not easy.
Well, how do you think
about social commercials? In my opinion, social commercial can be very helpful
for both buyers and sellers only if it is used well. Special cautions for this are
mandatory for both buyers and sellers who use social commerce.
The
caution for buyers is that they have to be really smart consumers. They should
check if the discount rates of daily deals are exaggerated. The discount might
be bigger or similar at other kinds of shopping malls. They should also check
the conditions for using coupons or the refund policies of products. Plus,
consumers should think over whether they really need that product or service.
The
suggestion for sellers is that to be a successful seller in social commerce,
they should be different, trustworthy, and continuous. The low-price can be a
good weapon when compared with other shopping malls, but when compared with
other sellers in the same social commerce, it is not a good weapon. This is
because all sellers offer their products or services at very low price. To be
successful, they should be different, not only in the aspect of price, but also
in other aspects such as qualities or services. Also, they have to be
trustworthy to their customers. Once consumers begin to trust one seller in
social commerce, they will post them in their SNS, and the marketing effect
will be powerful. The sellers who earned credit should continuously keep the
quality of their products or services.
In
conclusion, because social commerce can be a double-edged sword, consumers and
sellers both should be aware of the cautions that I stated above.
Three images : above
Two videos :
(A
discussion about social commerce’s good and bad points)
(Three
tips for social commerce success.)
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