Impact of Social Media on e-Commerce: A Conceptual Study

Dewani Om Prakashlal

VPM’s R Z Shah College of Arts, Science & Commerce, Mulund (E), Mumbai-400081, India

Keywords: e-Commerce, Social Media, Marketing Strategies

Abstract: The purpose of this research is to study how social media is affecting the workings of e-commerce, the advent

of social media has changed the face of e-commerce and has made it more accessible. In the last decade social

media has gained radical attention from people around the globe, with the increasing use of social media sites

like Facebook, Twitter, Instagram, LinkedIn, YouTube almost everyone is using on or the other social media

to communicate. To promote and advertise the products instead of using older sources like TV or radio or

spreading the word in the community social media provides greater ease and convenience. Social media is

now spreading its roots in every aspect of life, it has overtook our daily source of entertainment. Social media

has so much hold on our life, with this increasing hold of social media on us has cajoled the major brands to

understand the online customer behaviour and efficient ways to use social media for their advantage. Brands

are aware about the customer interactions and transparency that comes with social media. This has changed

the scenario of e-commerce completely. The brands are at an advantage to increase their customers with

suitable marketing strategies, social media has helped maintaining transparency between brand and the

customers, it has helped the brands to communicate with their customers and understand their needs better.

Along with that social media has changed the way traditional e-commerce worked. This paper deals with

closely studying the changes in e-commerce and workings of social media commerce

1 INTRODUCTION

The exchange or buying and selling of commodities

on a large scale involving transportation from place

to place is known as commerce. When all this is done

electronically, it is known as e-commerce.

According to Philip Kotler-

E-commerce can be defined as a general term for

buying and selling process that is supported by

electronic means.

It is the activity of electronically buying or selling of

products on online services or over the Internet. there

are companies who have been using e-commerce only

to advertise and distribute their products widely, they

even have physical stores but to make their products

widely available from urban areas to remote, they use

e-commerce to widely distribute their products.

Whereas there are other companies who do not have

physical stores, their services are limited to online

purchase only, either way e-commerce has opened

doors for both big companies with online and offline

purchase options and small startups with online

services. This has proven to encourage the

establishments and growth of new startups they have

paved a way for the new era of startups by giving

them the facility of large scale reach and sell. Typical

e-commerce transactions include the purchase of

products or services. There are three areas of e-

commerce: online retailing, electronic markets, and

online auctions. E-commerce is supported by

electronic business. The motive of e-commerce is to

allow consumers to shop online and pay online

through the Internet, saving the time and space of

customers and enterprises, greatly improving

transaction efficiency, especially for busy office

workers, but also saving a lot of valuable time. With

the advent of social media, the use of e-commerce has

radically gained attraction. Billions of people around

the world use social media to share information and

make connections. On a personal level, social media

allows users to communicate with friends and family,

learn new things, develop your interests, and be

entertained. On a professional level, users can use

social media to broaden our knowledge in a particular

field and build your professional network by

connecting with other professionals in your industry.

At the company level, social media allows us to have

a conversation with the audience, gain customer

Prakashlal, D.

Impact of Social Media on e-Commerce: A Conceptual Study.

DOI: 10.5220/0012503800003792

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st Pamir Transboundary Conference for Sustainable Societies (PAMIR 2023), pages 797-801

ISBN: 978-989-758-687-3

797

feedback, and elevate brand. Social media has opened

new doors to market and promote e-commerce stores

to a broad audience. As e-commerce has helped us

connect to our closed ones it has also helped improve

company-consumer relations. This research was

undertook to understand the changing customer

behaviour and how social media is changing the face

of e-commerce, many brands are seen having social

media sites through which they advertise their

products and communicate with their customers. This

research will help study brand building in the

changing times of social media.

social media can be used for e-commerce to:

Attract new customers

Build brand awareness

Generate online sales

Another aspect that has boosted e-commerce and has

promoted it to broader audience is use of portable

devices like mobile phones which has made e-

commerce accessible easily at any time any hour.

Another aspect of e-commerce is m-commerce where

we have the ease of doing online transactions of e-

commerce on portable device like mobile phones, this

m-commerce has opened a whole new world to the

users of e-commerce. Shopping products is now one

click away, they can shop anywhere and anytime.

This m-commerce users show a exponential surge

during the COVID-19, as it helped maintaining the

safety norms. M-commerce is now gaining more

attraction than non-mobile commerce.

1.1 Objective of the Study

The main objective of this research is to study the

impact of social media on e-commerce.

To study how social media is changing workings of

e-commerce.

To study if e-commerce has seen any surge in sales

due to social media.

To study if the social media has helped with the

outreach of e-commerce.

1.2 Research Methodology

This study is a theoretical approach towards studying

the impact of social media on e-commerce closely.

The data has been collected from various journals,

papers, research papers and social media platforms.

Research gate and google scholar have also been used

for the study. The nature of the study is descriptive.

Various research papers have been read and reviewed

to collect the data.

Review of Literature-

E. Taiebi Javida, M. Nazaria and M. R. Ghaelia in

their research paper Social media and e-commerce:

A scientometrics analysis(February 2019) have

made an attempt to study effect of social media on e-

commerce based on scientometeric indicators.

P. Sri Jothi, M. Neelamalar and R. Shakthi Prasad

(March 2011) in their research paper ―Analysis of

social networking strategy in developing brand

communication, have conducted research on various

social media sites like twitter, Facebook, orkut to

study how brands use these sites to advertise and

promote their brands and how they use it to

communicate with their customers better.

Dr. Manohar Singh , Gobindbir Singh in their

research paper Impact of social media on e-

commerce talk about how its important for resorting

to social media marketing instead of traditional

marketing for brand building.

Umair Akram, Anjum Safia, junwu chai and

Adasa Nkrumah in their research paper The Impact

of Social Media Characteristics on E-Commerce

Use Behavior Among Youth in Developing

Countries studied the customer behaviour pattern of

youth of developing countries and how social media

influences it.

Shahir Bhatt and Amola Bhatt (2012) in their

research paper Factors influencing Online

Shopping: An Empirical Study in Ahmedabad

conducted research on the factors influencing online

shopping of customers with respect to Ahemdabad.

2 TYPES OF SOCIAL MEDIA

PLATFORM

2.1 Facebook

Quite popular among millennial Facebook is one of

the largest social networking site, according to

Facebook statistics it has around 2 billion active users

daily as of 2023. Facebook has helped connect people

from all over the world. It has feature of creating

Facebook page for brands, it has proved to be really

helpful in promoting and advertising products and

also gaining the trust of the customers.

2.2 Twitter

Elon Musk’s twitter is a popular medium for sharing

opinions, as of 2023 with 396.5 million active

users.one can express their views and opinions in

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form of short text message, it also supports images

and videos. It is a great platform for rand to address

customer grievance, establish communication

channel between brand and customers and maintain

transparency. The customers can directly address the

brand by just mentioning username of the brand in the

tweet.

2.3 Youtube

The most famous video-sharing platform that has

over 2 billion users. Users can watch videos, even

share comment, like subscribe and even upload their

own videos. There is a concept of paid partnerships

where brands can collaborate with the trending

youtubers to promote and advertise their brands

which increases brand outreach.

2.4 Instagram

Instagram is a visual social media platform that is

totally based on photos and videos posts only. It is

also owned by Facebook with over 500 million daily

active users, instagram is quite popular among

youngsters. Brands can use this photo sharing

platform to their advantage, with the feature of paid

partnerships with influencers it can help promote

brand and also establish a relation to their customers

with the features of direct message, live broadcast and

photo and video sharing. They can check their post

reach and pay instagram to advertise their posts. By

posting stories brands can involve their customers in

making. The in-app shopping has also done

multitudews to boost the e-commerce customers.

Instagram has proved to be aid for new startups to run

buisiness withot having physical stores.

2.5 Linkedin

LinkedIn is a social networking site that is dedicated

for business and employment-oriented services.

employers can create a profile for their company and

search or browse for employees online. They can

check the resume of the employees and their past

working experiences. LinkedIn allows members that

may be workers as well as employers to create

profiles in an online social network which may

portray real-world professional relationships.

3 HOW IS INSTAGRAM

CHANGING THE FACE OF E-

COMMERCE

Recently, Instagram has gained quite a popularity

among people, with introduction of new features and

constant updates it has made way to everyone’s

devices. Instagram has recently introduced reels

(short videos) which is main attraction for most

people these days, if used properly the reel feature can

help increase the brand outreach. Instagram is very

business friendly with its options of creating a

business profile and viewing insights and profile

visits, with its feature of promotions it helps the brand

to reach its targeted audience, allowing brands to

collaborate with the influencers and thereby

marketing the product.

In the eCommerce industry, Instagram is a game-

changer. Virtually every notable eCommerce

building platform enables you to incorporate an

Instagram feed into your online store. There are over

1 million monthly advertisers and 8 million company

profiles on the marketplace. Instagram is quickly

becoming the social media universe's hub in 2021.1

Thanks to the 'Checkout on Instagram' feature, it has

also become the focal point of all mobile eCommerce

transactions. The Checkout on Instagram has proven

successful with eCommerce companies, creating a

one-of-a-kind start-to-finish shopping experience.

Instagram added the shoppable post option back in

March 2018, allowing users to purchase products

directly from the app. The Instagram user was

redirected to the brand's website, where they were

occasionally required to register or create a new

account. After browsing a product from a brand's

shopping post, the user sees a "Checkout on

Instagram" option. They merely need to select the

size or colour before closing the cart, and then they'll

be taken straight to payment without ever leaving the

Instagram app. The buyer's journey from product

discovery to purchase has been substantially

simplified, because of Instagram. As a result, the

entire process of becoming inspired to receive the

item will be considerably more straightforward and

quicker. This could be a critical step in closing the

eCommerce mobile divide. Additionally, Shoppable

Instagram posts are a terrific method for businesses to

exhibit products and increase sales visually, users

may also move from inspiration to purchase without

leaving the Instagram app.

Following data proves the fact that Instagram has

made shopping online more convenient-

Impact of Social Media on e-Commerce: A Conceptual Study

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Last year Instagram announced that 140 million users

tap on product tags in shopping postings each month

Today more than 80% users follow brand or a

company account

Approximately 70% Instagram users claim to have

discovered a product through their feed.

Instagram has made impulse buying more favourable

with these features. One of the important point is that

brands have created a sense of community on

Instagram, communicating with their customers,

understanding their needs, showing their behind the

scenes it creates a trustworthy environment. Another

practices popular over Instagram is brands

collaborating with the influencers to promote their

products and services. This helps to promote the

product to larger group of people. In the real world,

we might tell our closest friends, family, and co-

workers about a product we enjoyed.

This type of word-of-mouth marketing has previously

been demonstrated to be effective, However, when

we combine word-of-mouth recommendations with

the influencer marketing realm of Instagram, we have

a much more effective instrument to elicit an impulse

purchase. And the power of an influencer’s comment

or feedback can be a significant game-changer.

Instagram has also added this feature where brands

can promote their post to the targeted group of

audience which attracts more customers, the post

usually appears in the audience’s feed as sponsored.

Brands can create a business profile and keep a track

of insights and reach. On top of that Instagram

algorithm is like a catalyst, Our Home feeds are

personalised to our likes and dislikes, thanks to the

already established and super-savvy Instagram

algorithm, which surfaces stuff the algorithm thinks

we'll like most to the top of our Home feed. We're

entering a curated, personalised, shoppable location

to apply that concept to the new Instagram Shop feed.

Users can "Browse Shops," "Explore Guides," "See

Editors Picks," and "Shop Collections" in the new

shopping location, making finding inspiration and

shopping straight in the Instagram app much more

manageable. All these factors have made e-commerce

more convenient.

4 FINDINGS AND SUGGESTIONS

4.1 Global Marketing Reach

In the past, a business’s reach was limited by the

number of people able to physically enter through a

store’s front doors. Social media has opened new

doors for e-commerce a brand on a social media

networking site doesn’t need a physical store,

customer’s reach is over the globe, products directly

reach the customer. The rise in internet usage and the

growth of social media have made it easier for e-

commerce business owners to reach a diverse new

mix of customers. A brand can promote themselves

globally with just an account on any social

networking site.

4.2 Ease of Ordering Products

Customers can order products from anywhere, just a

few clicks away. And with emergence of in-app

shopping there is a surge seen in the purchase on

social media. And several small businesses have

setup their profile on Instagram where customers can

directly order through them by contacting them on

Instagram no need to visit physical stores.

4.3 Lower Operating Cost

Anyone with a social media account is all set to run a

business, instead of traditional commerce where a

person needs physical store to set up a business, this

has reduced unnecessary expenses and lower

operating costs. No need of hiring employees and

renting space or warehouse internet is the store where

customers can visit anytime and purchase anytime

4.4 Direct-to-Consumer Access

Social media has allowed brands to directly

communicate with their customers and vice versa

without involvement of third-party this has helped to

establish trust between brand and the customer

thereby increasing the chances of frequent purchases.

Also preventing third party mishaps.

4.5 Raised Brand Awareness

Social media has allowed the brands to customize

their portrayal catering the needs of target audience,

following trends and enlightening posts about the

brand has helped build brand awareness. Making their

social media profile aesthetically pleasing along with

display of their brand products and services has

helped brands to attract targeted audience.

4.6 The Emergence of in-Shop

Shopping

Many social media platforms have introduced in-app

shopping, providing users with the opportunity to

make purchases from the comfort of the app.

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Snapchat’s partnership with Verishop has allowed

them to produce “Verishop Mini”, an in-app shopping

service that lets users find and buy beauty and fashion

products. They’ve also introduced an augmented

reality tool, enabling shoppers to virtually try the

products before buying, making it so much easier for

customers to discover their next purchase. Facebook

and Instagram are two other platforms that have

introduced in-app shopping features.

4.7 Increased Brand Engagement &

Improved Customer Loyalty

Being active on social media is also important for

brands, being available on social media profile to

address customer grievances is key to not losing

customers, this develops trust between brand and

customers and thereby encouraging frequent

purchase from the brand and improved customer

loyalty.

4.8 Easy for Consumer and Company

Social media has made it much easier for users to

purchase online. With ads that send customers to a

product directly, it’s become so quick to go from

searching to purchasing in just a few clicks or taps.

Snapchat has also introduced an in-app feature, where

users can ‘snap’ a photo of a barcode and get sent to

the product’s page on Amazon.

5 SUGGESTIONS

With the growth of impact of social media on our

daily life and specially e-commerce brands are

suggested to make themselves available on the social

networking site to promote the brand and address the

customers.

It is suggested for brands to make in-app shopping

available.

To increase the reach of the brand, brands are

suggested to follow and stay updated with the recent

trends.

Brands are suggested to use social media to their

advantage by maintaining transparency and

establishing relationship with their customers.

Brands should try to understand online customer

behaviour and try to cater their needs to increase

customer loyalty.

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