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Facebook Dominates Social Commerce Thanks to Marketplace, But Is It Sustainable?

It has been a few years since social media platforms like TikTok started to enter the world of ecommerce, but none have seen the level of success that Facebook has managed to obtain. Facebook was the first social media site to successfully close the discovery to purchase loop, thereby creating a distinct ecosystem for customers to find, vet and purchase products in. Much of this success can be attributed to Facebook having its dedicated Marketplace because of the fact that this is the sort of thing that could potentially end up facilitating C2C commerce as well some major brands and companies.

Facebook now has just under 63.5 million social commerce users in the US. It is estimated that this userbase will grow to just under 70 million by 2025, or 69.4 million to be precise. Its fellow subsidiary Instagram does quite well too with 41 million users, and TikTok has seen soaring growth too although its 23.7 million American social commerce users falls well short of its Meta owned rivals.

In spite of the fact that this is the case, TikTok will quickly close the gap if current predictions hold out. By 2025 its growth rate is expected to bring it up to 37.8 million users. By comparison, Instagram is expected to have about 47.5 million social commerce users by 2025, which will reduce the deficit to under 10 million from 18 million.

However, TikTok’s growth rate is expected to plateau, so it might not surpass Instagram in the near future. Interestingly, most of Facebook’s social commerce success comes from C2C purchases. That is quite different from the B2C appeal of TikTok, so these figures might not reveal the true nature of the industry.

Facebook is relying on the current period of high inflation which is driving C2C purchases. Once inflation settles down, we might notice a decline in the number of social commerce users it has. This could give TikTok the opening it needs to rise to the top of social commerce. It will be interesting to see where the industry goes from here, because TikTok is the most unpredictable of the lot.


H/T: Insiderintelligence

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