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How to Tap into the U.S. Social Commerce Market Through Millennials and Gen Z With high social media use and a preference for shopping online rather than in-store, these two demographics hold the key to the US' social commerce market potential.

By Diane Wang Edited by Micah Zimmerman

Key Takeaways

  • Social commerce is booming in the US and other markets, with many young people keen to seize this social commerce opportunity to start their own businesses.
  • The US — with 90% social media penetration — is teeming with social commerce market potential.

Opinions expressed by Entrepreneur contributors are their own.

Millennials and Gen Z are two of the most important influential consumer groups globally as their spending power grows and they become the majority workforce demographic. In the US and China, two of the world's biggest consumer markets, these groups make up over 42% and over 38% of the population, respectively.

As the first generations to grow up with the internet, they are intimately familiar with the latest consumer trends. The result is that their shopping habits are shaping how we interact with brands and consume content for the next decade.

Founding my ecommerce company, DHgate and growing it over 19 years into a cross-border industry leader has put me in a unique position to watch how new lifestyle and shopping habits emerge. I have observed how spending time and money online has become deeply integrated into Millennials and Gen Z's lives, with many preferring shopping online over in-store.

In recent years, tech-savvy Millennials and Gen Zers have been spending more time on social media and making more shopping decisions motivated by influencer content. With easier and more diverse online shopping, shoppers gravitate toward more authentic recommendations to make purchasing decisions that align with their values. From tuning DHgate's business for a changing landscape, it is evident to me that social media plays an instrumental role in influencing shopping decisions.

Related: Move Over Boomers and Millennials — Here's How Gen Alpha's Top Entrepreneurs Are Printing Money

Social media and online shopping converging into social commerce

After DHgate launched in China, home to one of the world's largest Millennial and Gen Z demographics, I have seen these cohorts rapidly transform the ecommerce industry. As new social channels emerge, consumers quickly adapt features to fit their needs.

Social commerce has flourished in China, reaching a market size of over $215 billion. Social commerce is also booming in the US and other markets. Many young people are keen to seize this social commerce opportunity to start their own businesses.

Creator and entrepreneur Big Mouth is a great example. Although unfamiliar to the Western world, she's a superstar in Asia, selling millions of products through live shopping. While working with coffee company T97 as their marketing partner, she has helped them generate $150 million in sales in a single month, a significant portion of their $1 billion annual revenue. She is just one of a new wave of creators irrevocably changing the way creators collaborate with brands.

Livestream shopping and mobile commerce were two major points of the social commerce evolution in China. China leapfrogged the dial-up desktop era and went straight to mobile phones, today boasting 75.6% internet user penetration and 72% social media penetration.

This proliferation of smartphones and social media transformed China into fertile ground for social commerce, accelerating the sector's advancement faster than in other countries. Chinese Gen Z leads the way, who make up approximately 34% or 342 million of the country's online users shopping via social commerce.

Related: What Brands Need to Know About Social Commerce

Social commerce's potential in the untapped US market

The US — with 90% social media penetration — on the other hand, is still teeming with social commerce market potential as this form of shopping is underdeveloped compared to China.

In recent years, US Millennials and Gen Z have been driving the social commerce trend on platforms like Instagram and TikTok. 64% of Gen Z and 58% of Millennials enjoy social shopping for lifestyle inspiration, recommendations and following through with purchases.

During my recent US business trips, I saw that the younger generation is passionate about starting their own businesses, especially through social media. Social commerce notably lowers the barrier to entry to starting a business, cutting out many risks while also empowering entrepreneurs to kickstart their businesses more quickly.

As I spoke with young US creators and heard their concerns, I realized that the US social commerce market still lacked the diversity and dimension in social shopping that the Chinese market already had. Creators lamented using several e-commerce platforms to run different aspects of business operations, from creating an online storefront to sourcing from multiple suppliers.

Without more streamlined methods for social media users to shop or for creators to set up social commerce businesses, the US social commerce sector's growth is limited. Also, considering consumers' evolving social and shopping habits, this inspired me to create MyyShop, an extension of DHgate's philosophy of empowering entrepreneurs, as a unique one-stop and user-friendly solution for social commerce that plugs the gap in the US market and meets the needs of young, underserved communities.

Catering to modern entrepreneurs and creators of different sizes, MyyShop enables them to customize an online storefront, source for products, use AI to discover viral/trendy products and more. Creators earn commissions through product sales and can even create their own product lines with established cross-border supply chain partners.

For example, young LA-based creator Dayna Marie encountered unreliable platforms on her social commerce journey. It was only when she started using a solution like MyyShop, providing her access to a suite of e-commerce tools at her fingertips, that she could truly build a social commerce business and even create her own clothing line.

Related: Why Social Media Platforms Are Adopting Ecommerce as a Saving Grace

Meeting Gen Z and Millennials' shopping needs

Social media is the primary way for Gen Z and Millennials to discover new products through shoppable posts and in-app stores, as creators and influencers drive sales for brands. Nearly 80% of these demographics' shoppers in the US have bought a product inspired by creator content.

I find that US consumers are particularly savvy at shopping and finding recommendations from creators and influencers. Millennial and Gen Z consumers, in particular, look beyond just affordable and high-quality products. They prioritize brand authenticity and transparency and follow digital content creators with similar values and interests. This overlap creates closer connections between digital creators, brands and consumers.

It's only the beginning of social commerce, with expected sales to reach $107.17 billion by 2025. Millennials and Gen Z consumers will be driving that growth for years to come as they embrace the convergence of social content and ecommerce.

Diane Wang

Entrepreneur Leadership Network® Contributor

Founder of DHGATE Group & The Inner Mountain Foundation, TEDx Speaker

Diane Wang is founder, chairperson, and CEO at DHgate, a leading cross-border B2B e-commerce marketplace. Founded in 2004, DHgate serves 59.6 million buyers from 225 countries and regions by connecting them to 2.54 million sellers. In 2020, DHgate launched the social commerce SaaS platform MyyShop.

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