China has firmly established itself as the global leader in social commerce, a segment in which consumers browse and purchase directly through social media and content creation platforms.
According to McKinsey & Company’s “State of the Consumer 2024: What’s New and What’s Next” report, China has been at the forefront of this trend for several years, with its market outpacing India’s. Emerging markets such as Brazil, Saudi Arabia, and the UAE are rapidly catching up, with consumers in these regions consistently spending more on social media purchases compared to their counterparts in Europe and the US.
McKinsey’s report highlights the stark differences in social commerce adoption and spending patterns across regions. In China and India, the social-commerce markets have evolved significantly, leveraging vast user bases and sophisticated platform integrations.
Meanwhile, emerging markets like Brazil, Saudi Arabia, and the UAE are seeing rapid growth, driven by increasing smartphone penetration and social media usage. These markets are close behind China and India, indicating a broadening of social commerce adoption beyond Asia.
In contrast, Western markets have struggled to achieve similar levels of success. Efforts to expand social commerce in the US and Europe have faced numerous challenges, possibly due to premature market entry and less integrated social media ecosystems. Despite these obstacles, the US social commerce market is projected to grow substantially.
McKinsey forecasts that the market will expand to $145 billion by 2027, up from $67 billion today. This growth is primarily driven by Gen Z and millennials, who are four times more likely to make social media purchases than older generations. Over one-third of Gen Z and millennial respondents reported purchasing on social media in the past three months, underscoring the demographic's pivotal role in driving this trend.
Social commerce titans: Douyin, Xiaohongshu
China’s social commerce titans, Douyin and Xiaohongshu, have demonstrated remarkable performance during major shopping events, such as the recent 618 Shopping Festival. Douyin, the China-market version of TikTok, launched its e-commerce arm two years ago and has quickly become a formidable player.
During this year’s 618 Shopping Festival, the platform recorded a total livestreaming duration of 40.5 million hours, while short videos featuring shopping cart links garnered 115.1 billion views and 183 live broadcasts, each achieving sales exceeding $1.37 million.
Xiaohongshu, another key player, also posted impressive results. During the 618 period, the platform’s livestreaming sessions saw a 5.4-fold increase in order volumes compared to the previous year, and GMV from in-store broadcasts grew five times higher. Xiaohongshu's monthly active users reached 312 million in 2023, a 20% year-on-year increase, demonstrating its rapid user base expansion and growing influence.