Rapid Growth of Social Media Commerce Amid Non-Face-to-Face Trend
35.5 Million Social Media Users in Korea
Activation of Platform + Commerce Type Businesses
[Asia Economy Reporter Koo Chae-eun] With the spread of the novel coronavirus infection (COVID-19), the non-face-to-face and untact trend has surged, leading to rapid growth in the social media online shopping market, including YouTube, TikTok, Instagram, and Facebook. It is predicted that massive social media platforms with billions of users worldwide will generate revenue by attaching commerce to their platforms.
According to the '2020 Social Media Status and Outlook' report published on the 27th by KT Economic Management Research Institute and DMC Media, social media platforms are significantly strengthening their competitiveness in online shopping.
Shopping on YouTube and TikTok
YouTube has introduced a 'Shopping Extension' as a pilot service in Korea. By clicking 'SHOP NOW' at the bottom of YouTube ads, product information and prices are displayed in a catalog format. TikTok also plans to pilot a 'Shop Now' feature that allows users to purchase products directly from influencer content. Facebook's 'Facebook Shops' is a service that allows anyone to open an online store for free. Once a page is created, it automatically links to Instagram. Instagram has recently added 'Gift Card' and 'Order Food' features, evolving into a platform more specialized in commerce.
The report stated, "As the e-commerce market grows due to COVID-19, the social media industry is actively expanding its portfolio as marketplaces," adding, "It will be necessary to observe what impact this will have on the domestic e-commerce market landscape in the future."
Rapid Increase in Active Social Media Users in Korea
The number of social media users is also rapidly increasing. According to Nielsen Korean Click data, as of March this year, the number of social media users in Korea increased by 15.2% year-on-year to 35.5 million.
Looking at monthly active users (as of June 2020), the ranking is Naver Band (16.92 million), Instagram (11.49 million), KakaoStory (9.96 million), and Facebook (9.85 million). Following these are Naver Cafe (5.1 million), TikTok (2.94 million), Daum Cafe (2.23 million), Twitter (1.99 million), Naver Blog (1.54 million), and Everytime (1.02 million).
The report added, "The COVID-19 pandemic has qualitatively changed our lives, especially with social distancing turning many aspects of life digital. In this situation, social media has rapidly emerged as an alternative for social communication and interaction, now also functioning as a shopping channel, and competition among platforms is becoming very intense."
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