Subject category:
Strategy and General Management
Published by:
INSEAD
Version: 12/2020
Length: 20 pages
Data source: Published sources
Abstract
Social commerce is a new trend in e-Commerce that leverages individual relationships and affiliations to drive growth in online sales. The case compares two companies, Pinduoduo and Facebook/Instagram, and their different social commerce business models, notably social network based vs social group based models. Social network platforms (like Facebook/Instagram in the US) generate supply-driven commerce ecosystems that leverage the social graph of individual relationships to drive sales through highly-connected influencers in an ad-based business model. Social group platforms (exemplified by Pinduoduo in China) generate a demand-driven commerce ecosystem based on rich, gamified interactions that don't depend on prior relationships in a direct sales business model. The case describes the recent evolution of social commerce such as the launch of Facebook Shops and Instagram Shops that resemble Pinduoduo's model.
Industries:
Other setting(s):
2016-2021
About
Abstract
Social commerce is a new trend in e-Commerce that leverages individual relationships and affiliations to drive growth in online sales. The case compares two companies, Pinduoduo and Facebook/Instagram, and their different social commerce business models, notably social network based vs social group based models. Social network platforms (like Facebook/Instagram in the US) generate supply-driven commerce ecosystems that leverage the social graph of individual relationships to drive sales through highly-connected influencers in an ad-based business model. Social group platforms (exemplified by Pinduoduo in China) generate a demand-driven commerce ecosystem based on rich, gamified interactions that don't depend on prior relationships in a direct sales business model. The case describes the recent evolution of social commerce such as the launch of Facebook Shops and Instagram Shops that resemble Pinduoduo's model.
Settings
Industries:
Other setting(s):
2016-2021