Online social media and social networking site logos displayed on a smartphone screen in Bath, UK, August 1, 2023.
Matt Cardy | Getty Images News | Getty Images
Gen Z, typically born between 1997 and 2012, leads other generations in discovering, rating, and purchasing products online, with 45% purchasing via social media, the report says. Indicated.
Many social media sites have introduced e-commerce features to their platforms, offering alternatives to popular online shopping sites such as Lazada and Shopee. For example, users can make purchases directly from the TikTok Shop or Facebook Marketplace without ever leaving the application.
According to a report published last year in Research and Markets, shopping on social media is contributing to the social commerce industry and is expected to grow significantly in Singapore over the next five years, reaching $6.99 billion by 2028. Estimated.
A 2023 study by British analytics firm YouGov found that Gen Z prefers to shop on TikTok and Instagram rather than Facebook, which is popular with older generations.
In Southeast Asia, more than 15 million businesses use TikTok to promote their work to an audience of 325 million monthly users, the content platform said in a release.
According to TikTok’s 2022 report, videos that use entertainment and information value to drive online purchases (also known as “shoppertainment”) have now created a market worth $500 billion on the platform.
TikTok says such strategies allow businesses to attract buyers by creating fun, authentic, and inspiring content that meets customers’ emotional needs.
Lawrence Loh, professor of strategy and policy at the National University of Singapore’s (NUS) Business School, said the emotional engagement of ‘shoppertainment’ appeals to Gen Z, who are attracted to products that offer authenticity. This is because they prefer to buy from content creators who provide them with support.
“Compared to other generations, they like to know the reality of what they’re buying,” he says.
Creators promoting products can also appeal to Gen Z’s trustworthiness by leveraging the live streaming capabilities of social media platforms.
Tracy Lo, senior lecturer in communications management at Singapore Management University (SMU), said that unlike the static shopping experience of e-commerce websites such as Lazada or China’s Taobao, TikTok’s live streamers can stream three or four at a time. Chat with time viewers.
It’s like getting a recommendation from a friend, she said, and helps buyers gain user trust more than the brand. “Especially when it comes to products that are more personal or intimate, like cosmetics or health, you want someone who has a high level of trust,” she says.
Wu Zhuan, who frequently shops online, said it was her first time creating social media. Watch creators test out specific cosmetics during live streams and buy them via TikTok.
“I applied this product on my face and found that it actually works,” said the 22-year-old Singaporean.
Wu said she plans to use TikTok to purchase cosmetics in the future.
According to Statista’s e-commerce database, influencers with 1,000 to 10,000 followers who create content (also known as nano-influencers) account for the largest share of TikTok and Instagram accounts.
According to NUS’ Loh, these smaller influencers are attracting Gen Z shoppers because they offer niche recommendations that cater to Gen Z’s selective tastes.
Gen Z is digitally savvy and relies heavily on social media nano-influencers to guide their purchasing decisions, he said. “They want to find something that matches their attitude and preferences.”
In contrast, millennials born between 1981 and 1996 prefer big brands and macro-influencers such as celebrities and athletes, he said.
Gen Z is vocal and acts as an opinion leader.Many influence the shopping habits and lifestyles of parents and grandparents
Lawrence Law
Professor of Strategic Policy, Business School, National University of Singapore
Traditional e-commerce sites are starting to imitate social media by expanding the reach of influencers, according to SMU’s Loh, using smaller influencers to spearhead local campaigns to attract Gen Z. It is said that it is used for
“Shopee has featured young local artists in many of its campaigns in Singapore, rather than someone like Cristiano Ronaldo,” she said.
Social media commerce makes it even more convenient for Gen Z to follow influencer recommendations by combining information search tools with direct purchase capabilities.
For example, Instagram’s “shoppable posts” feature allows businesses to tag products directly in photo or video posts, and users can be directed to a checkout page with just a few taps.
“It’s a one-stop shop for Gen Z because they don’t have to use any additional platforms,” she told CNBC. “The fewer hoops a person has to jump through, the more likely they are to close the sale.”
Generation Z has become an increasingly important consumer segment as their purchasing power has steadily increased over the past decade. The median salary for graduate students in Singapore will be S$4,200 ($3,181) in 2022, up from S$3,700 in 2020, according to Meta’s Digital Consumer Report.
SMU’s Mr Low said young shoppers had more disposable income and had “no qualms” about spending it on certain products.
“It’s not quite there yet, but there’s a lot of potential there…give them a few more years to see their income increase,” she said.
Gen Z not only has money, but they also have social influence. NUS’ Mr Low said these were young people who had the power to influence the purchasing decisions of other generations.
He added: “Gen Z is vocal and acts as an opinion leader. Many have influenced the shopping habits and lifestyles of their parents and grandparents.” He noted that some people are starting to use the same platforms their generation is using to shop.