The battle for Gen Z social shoppers – BBC News

Shopping behavior has not been the same since the Covid pandemic and the resulting lockdowns.

For many, especially younger shoppers, it saw the boundaries blur between social media and e-commerce.

Unable to shop in person, and with TikTok downloads skyrocketing, a trend that would later be described as a cultural phenomenon began: #TikTokMadeMeBuyIt.

The hashtag, where users post what they have purchased thanks to product recommendations on the app, has now been posted more than seven billion times.

For Lilia Souri and AJ Pulvirenti, who co-host the marketing podcast “Gen Z on Gen Z,” TikTok is winning with their generation.

“It’s become one of the biggest because of how advanced the algorithm is, and because before TikTok Shop even existed, we saw shopping behavior happening on TikTok as a whole,” says 27-year-old Lilia Souri.

“You can buy a product directly on the platform and then continue scrolling, in a cycle of viewing, shopping and repeating,” adds her co-host AJ Pulvirenti (25).

Social shopping is a large market and growing rapidly. In 2023 it was worth $570 billion (£446 billion) worldwide, and is expected to be worth more than a trillion dollars by 2028, according to Statista estimates.

Although TikTok is one of the major players, its position seems vulnerable. TikTok could be banned in the US unless it is sold by Chinese parent company ByteDance.

So where would that leave social shopping?

If you look at the number of buyers, Facebook still has the largest presence in social shopping, according to Jasmine Enberg, chief social media analyst at E Marketer.

Most transactions take place on Facebook Marketplace, “one of the few places Gen-Z and young people still go on Facebook,” she adds.

But if you look at the percentage of users who actually buy something, TikTok leads the way, Ms. Enberg said.

Data from a US-based e-marketer shows that 40% of TikTok users in the US will make at least one purchase on the platform this year, across both Facebook and Instagram.

“It is a very important activity on the app, especially for its users,” says Ms Enberg.

Not to be left out, Amazon added a Consult-a-Friend feature last year, allowing customers to ask friends for advice while scrolling through the app.

Gen Z podcaster AJ Pulvirenti is skeptical about these new features.

“If a platform is just trying to replicate something from another platform and doesn’t offer anything particularly new or intriguing, people won’t feel inclined to switch from something they’re used to,” he says.

A recent study from market research firm Data.ai found that Generation Z spends about two hours a day on TikTok, compared to just under ten minutes on Amazon.

Perhaps the experiences of TikTok in Indonesia can provide some useful lessons.

In 2021, it became the first country to pilot the app’s e-commerce service, becoming one of the largest markets for TikTok Shop.

But with local trade suffering due to the pandemic, the government introduced rules to protect local retailers last October, forcing TikTok Shop to close.

It was a big blow for 26-year-old entrepreneur Evo Syah.

“It’s hard for me, but what can I do?” he says, recalling the difficult decisions he had to make.

“I just start my business for a year, and then they shut me down,” he says.

But two months after its shutdown, TikTok agreed to invest $1.5 billion in Tokopedia, Indonesia’s largest e-commerce platform, meaning sellers like Evo Syah and millions of others could return to the app.

The 26-year-old said he has “never felt happier”. But not everything went back to normal.

“Before the TikTok store closed, I was able to sell around 20 million rupiah ($966) every day. But after the store reopened, it was only 10 million rupiah ($483),” he says.

Mr Syah sells most of his products via livestreams, a sales method that has become hugely popular in Asia but has failed to take off in Britain and the US, according to Ms Enberg.

“Indonesia has a very different trading landscape than the US,” she says.

However, in both Indonesia and the US, TikTok Shop has been crucial for many small and local sellers, she adds.

“Many of them don’t really have another place as powerful as TikTok.”

Looking ahead to a possible US ban, Ms Enberg says it would trigger a wave of social shopping.

“Instagram Reels is the most natural solution for many displaced TikTok users. But we will probably also see a rise in new apps.”

Generation Z podcast hosts AJ Pulvirenti and Lilia Souri agree: “In a world where TikTok might be banned. This behavior will still exist and will still flourish,” says Lilia.

“In a world where this can happen. I think this next big thing has yet to be created,” AJ adds.