Shop As You Scroll: Is America Finally Ready to Embrace Social Commerce?
The current state of social commerce, the rise of Chinese ecommerce apps, and their potential to reshape online shopping
It’s no secret that the ecommerce players in the U.S. have tried repeatedly to replicate the kind of social media-driven ecommerce experiences popular in China and other Asian markets. Now after a decade of thwarted efforts and false starts, it seems that a new wave of social commerce innovations is emerging to convince Americans to shop where they scroll. This is partly thanks to the aggressive push of Chinese ecommerce apps, such as Shein and Temu, into the U.S. markets, and the corresponding responses from American competitors.
The Status Quo
The U.S. social commerce market is projected to grow steadily by 6.6% year-over-year in 2024 and surpass $101 million by 2025, per eMarketer’s latest estimates. Short-form, shopping-related video content has become ubiquitous on social networks. Platforms like Meta’s Facebook and Instagram, as well as YouTube and TikTok, have solidified their positions as frontrunners in the social commerce space. Over 60% of Amercians have made a purchase of Facebook in the last 12 months, a separate eMarketer survey found.
Interestingly, TikTok edged out Instagram for the second spot. This is noteworthy, considering TikTok only officially launched TikTok Shop, its ecommerce hub, in the U.S. about a year ago, yet hardly surprising given the app’s massive and highly engaged user base. A recent survey by Morning Consult revealed that TikTok Shop is particularly popular with younger consumers, with roughly 40% of Gen Z and 37% of Millennial users have made at least one purchase on TikTok Shop, compared to just 14% of its Gen X users.
The latest data from Bizrate Insights found that TikTok is behind Facebook, Instagram, and YouTube, purchases through TikTok more than doubled from 8% in August 2023 to 18% a year later, highlighting its rapid adoption as a social commerce platform. Despite the overall growth across platforms, however, the majority (55%) of Americans reported not making any social media purchases as of August 2024, the survey found.
Yet, with Chinese social and ecommerce apps shaking up consumer expectations around online shopping, social commerce is rapidly maturing as Meta, Amazon, TikTok, and other players develop the capabilities to operate a retail ecosystem within their own four walls, further disintermediating the relationship between consumers and retailers.
Learning the Chinese Playbook
Chinese ecommerce apps like SheIn and Temu have been shaking up consumer expectations around online shopping. Companies like Temu and Shein have captured a significant market share by offering innovative shopping experiences that are app-based, entertaining, and highly deal-driven.
Unlike traditional Western retailers, these Chinese-origin apps are challenging the middlemen of traditional retail, connecting shoppers directly to manufacturers in China and delivering deep discounts in the process. This strategy not only brings budget-conscious consumers a wide range of affordable products but also introduces a new level of convenience and engagement that is especially appealing to younger generations.
In addition, these companies leverage technology to enhance their operations. Their algorithm-driven approaches enable them to respond quickly to consumer trends and shifts in demand. Customer data is used to personalize recommendations, prioritizing product discovery over product search. Together, Chinese social commerce players are driving U.S. consumer expectations toward a more social and discovery-oriented shopping experience.
In response, U.S. retailers, especially Amazon, are quickly learning from the Chinese playbook and adapting to compete in this new environment. For example, Amazon has announced a new online marketplace that will directly compete with Temu, focusing on low-cost fashion and household items from Chinese merchants.
Live commerce also remains an area of untapped potential in the U.S., especially considering the format’s enduring popularity in China and other global markets where social commerce has taken a foothold. Meta’s exit from the livestream shopping in early 2023 underscored the challenges faced in adapting this model for American consumers.
However, in recent months, some live commerce platforms are starting to gain momentum in the U.S., with Whatnot, a livestream marketplace initially focused on collectibles including sports cards, sneakers, comics, and vintage clothing, leading the charge. It works like a hybrid of eBay and TikTok Shop; Shoppers can follow their favorite sellers and chat with them via livestreams, where they can bid on an item or buy it immediately. In October, the company reported it has surpassed $2 billion in annual gross merchandise volume in 2024 to date, suggesting that there may still be hope for live commerce in the U.S., especially among niche audiences. Some of Whatnot’s early success can be attributed to its customizable loyalty program, which has shown that creating engaging, gamified experiences may hold the key to keeping U.S. consumers interested in live commerce.
Another key learning from the Chinese entrants is the need to develop more entertaining, creator-driven, shoppable content on social media and elsewhere. American shoppers are highly engaged with creator content on social media. A recent study by Sprout Social found that 49% of all consumers make monthly purchases because of creator content, with 30% trusting the creator they follow, more today than they did just six months ago.
In light of this growing consumer demand for shoppertainment, Amazon is set to launch its own version of Shark Tank on Prime Video with a distinct twist — in addition to a panel of business experts, the entrepreneurs will also be judged by 100 regular Amazon shoppers to see if their products are worth investing in. If their products are picked, Amazon will sell them in a special section of its online store. The inclusion of everyday Amazon shoppers as judges is a smart conceit that adds a layer of authenticity and relatability for the viewers.
This is the type of shoppertainment content popular in East Asian markets, but with a reality TV game show twist, a formula that’s proven to be engaging for audiences and lucrative for platforms. By blending entertainment with commerce, Amazon allows viewers to not only watch the pitches unfold, but also potentially purchase the featured products right from Amazon. If successful, this could usher in a new wave of shoppable content, as other streaming platforms look to merge content and commerce in similarly creative ways.
Expert-led or crowdsourced curation could also be an interesting counter-move that U.S. retailers can play against the uneven product qualities common on the Chinese shopping apps. Rather than relying solely on automated recommendations, curated platforms emphasize quality and trust, which appeals to consumers seeking a more personalized and selective shopping experience.
For example, Flip, a social commerce platform that recently acquired the curation-focused company Curated, aims to stand out by meticulously selecting its brands through a rigorous vetting process. This strategy contrasts sharply with TikTok Shop’s broader, algorithm-driven approach, where the focus is on scale and rapid discovery of trending products. As a result, the Flip app, which has been downloaded by over 5 million users, now features more than 5,000 carefully chosen brands. By prioritizing quality over quantity, Flip offers a shopping experience that feels more like a boutique marketplace than a mass-market bazaar, positioning itself as a trusted destination for discerning shoppers.
One last intriguing development is the offline extension of traditionally online platforms. Shein, known for its data-driven approach to fast fashion, recently hosted a pop-up event in London, creating an immersive retail experience complete with beauty services and hands-on shopping. Such events not only bridge the gap between digital and physical shopping but also provide brand exposure and direct consumer engagement, blurring the lines between social commerce and traditional retail.
The Uncertain Future
Yet, the rapid expansion of these Chinese-origin social commerce giants has brought scrutiny from regulators in the U.S. While TikTok is still facing a potential U.S. ban for national security concerns, Shein and Temu are both facing challenges related to the “de minimis” loophole, which has allowed them to avoid import duties on small-value packages. A crackdown on this policy could potentially drive up their prices and disrupt the low-cost advantage they have built. Moreover, last month, two commissioners of the U.S. Consumer Product Safety Commission (CPSC) urged the agency to investigate Temu’s and Shein’s safety practices, particularly over “deadly baby and toddler products.”
Overall, this growing regulatory tension underscores the growing influence these platforms wield, as well as the political complexities of their operations given their ties to China. Ironically, there’s some in-fighting within the Chinese apps too, as Shein clearly recognizes Temu as a direct competitor, and has sued Temu for copyright infringement in August, accusing the company of stealing trade secrets and masquerading “as a legitimate ecommerce marketplace.”
Should the Chinese-origin apps get weakened or banned by U.S. regulators, Meta and YouTube would become the obvious beneficiaries given their audience size and shoppable ad products in place. Yet, Amazon is the one that is most likely to replicate the same business model predicated on straight-from-China, low-cost goods, thanks to its robust logistics infrastructure and resources. In fact, a partnership between Amazon (back-end operations) and Instagram or YouTube (front-end discovery) would theoretically make the most sense, as they work together to deliver a full stack shopping experience.
In conclusion, social commerce in the U.S. is at a pivotal moment. With Chinese-origin platforms pushing the boundaries of how products are discovered, marketed, and sold, the entire retail landscape is being reshaped. Their emphasis on personalization, algorithmic-driven recommendations, and seamless integration of entertainment into shopping resonates well with younger consumers, creating a potential roadmap for the future of ecommerce.
As traditional players like Amazon adapt to these changes and newcomers like Flip carve out their niches, the U.S. social commerce market is likely to see an acceleration in innovation. The key to success in this space will be in creating immersive, engaging, and value-driven experiences — something that Chinese platforms have already mastered and American companies are racing to replicate.
Ultimately, the trajectory of social commerce in the U.S. will heavily depend on regulation decisions. Any actions taken — such as closing the “de minimis” loophole that exempts low-value imports from tariffs — could disrupt these platforms’ business models and reshape the competitive landscape. Thus, the future of social commerce in the U.S. hinges not just on consumer adoption and innovation, but also on how the regulatory environment evolves in response to the growing influence of these global players.
