Cathie Boismanaged investment company Ark Invest said on Monday that he estimates social commerce is likely to reach nearly $ 3 trillion over the next five years, up from around $ 390 billion now, and that it should put pressure on traditional e-commerce sites such as Amazon.com Inc (NASDAQ: AMZN).
What happened: The analyst of the popular investment company Nick grous believes that social commerce offers the convenience of online shopping with the network effects of social media, and is a rare ‘win-win-win’ for consumers, platforms and retailers, threatening the once-linked ‘convenience’ divide to Amazon and rivals.
“What once defined the Amazon divide – one-click checkout and fast shipping – is now ubiquitous thanks to third-party solutions like Shopify,” Grous wrote in a note, saying Ark wonders if TikTok, Instagram and similar social media platforms “will threaten the ‘Amazons’ of the world.”
“Plus, like it or not, social media sites can use treasure troves of data to personalize our shopping experiences.”
According to Grous, social platforms are likely to earn either directly, through sales commissions, or indirectly, through advertising which in turn is likely to put pressure on traditional e-commerce sites.
The Arche thesis: Forecasts follow social media giant TIC Tac announces a partnership with the Canadian e-commerce player Shopify Inc (NYSE: SHOP) to introduce in-app purchases and a host of other e-commerce features to its popular short video platform.
TikTok is not the only one, as there are many other social media companies that have entered ecommerce already.
Facebook Inc (NASDAQ: FB), Instagram, TikTok, Snap Inc. (NYSE: SNAP) Snapchat and Pinterest all have access to millions, if not billions of customers, historically limited in reach to the world’s largest companies.
Price action: Amazon shares closed up 2.15% at $ 3,421.57 on Monday.
Read more : Facebook has set big ambitions for the digital wallet, but Ark says the plan looks easier in theory than in practice