International Trends &

The Future of Social Commerce

Thesis Proposal
by Louie Cunanan
Intern, Mangrove Capital Partners
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a peek into the VC world

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thisnext.com

$1.2m
(anthem)

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buywithme.com

$5.5m
(matrix partners)

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groupon.com

$30m
(accel partners &
new entreprise
associates)

5
blippy.com

$1.6m
(charles river
ventures)

6
alvenda.com

$5m
(split rock
partners)

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powerreviews.com

$4.9m

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beyondtherack.com

$2m
(montreal start-up)

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onekingslane.com

UNDI$CLO$ED
(kleiner perkins)

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 kupiVIP.ru

$20m
(mangrove capital
partners)

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ideeli.com

$20m
(kodiak venture
partners)

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what is social commerce?

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 A subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying
and selling of products and services.

 The Shoposphere and Pick Lists are examples of social commerce. We believe the community of shoppers is one of the best sources for product information and
advice

 Subset of “advertorial content”, where content is the advertising… generated by a friend [wishlists... giftlists... picklists... tags... recommendations]… to provide
consumers with rich social context and relevancy to the purchases which they are making

 Creating places where people can collaborate online, get advice from trusted individuals, find goods and services and then purchase them.

 Social input in online shopping services [that] augments the experience e.g. social shopping: Sharing the act of shopping itself with others; ...a subset of social
commerce as a whole

 Creating new and more meaningful ways for retailers to interact with customers [through] search, communication and community

 Strategy of connecting customers to customers online and leveraging those connections for commercial purpose

 Customers having the means to interact with one another in order to make better buying decisions.

 A trusted environment where friends, family and acquaintances dynamically contribute content to the referral and sale of goods and services though positive and
negative feedback, reviews, ratings and testimonials regarding their experiences past & present. In short, social commerce is a trusted environment of which
prospective consumers make buying decisions based on the advice of a network of friends and family, not strangers they don’t know or trust.

 Subset of e-commerce in which the active participation of customers and their personal relationships are at the forefront.

 Conducting commerce using social networks or monetizing social media sites…applications transform[ing] a profile page on a social network into an online store,
complete with payment processing or buying and selling stuff online with friends helping

 Emerging trend in which sellers are connected in online social networks, and where sellers are individuals instead of firms. The distinction between social shopping
and social commerce is that while social shopping connects customers, social commerce connects sellers.

 The Fifth Era of Social Media: Brands will serve community interests and grow based on community advocacy as users continue to drive innovation in this direction.

 Working with or using your social graph, which is defined as your followers or your friends, and allowing them to help you make buying decisions.

 Enabling consumers to browse, view, and add products to a shopping cart, within the context of a social site, like Facebook or a blog

 Connect and foster active participation with customers to help improve your customer experience… including ratings and reviews, blogs, micro-blogging as well as
forums and communities or the concept of word of mouth in the context of e-commerce

 Social Commerce rises through trusted advice in conversations and word-of-mouth among your friends and relations in social networks, blogs, and communities,
helping to make shopping decisions and transactions

 The ability of two or more people to collaborate online, to share opinions and influence each other’s buying decisions

 Social Commerce is about customers having the means to interact with one another in order to make better buying decisions
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e-commerce + social media

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 Problem

 What’s the future? What would social commerce be like in 2-

3 years?

 How is it expected to evolve?

 How can we identify potentially successful start-ups /

platforms to invest? How can we profit from them?

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 Motive

 To provide a framework for investment decisions

for mangrove: to help identify potentially successful start-
ups / platforms to invest

 To forecast how social commerce is expected to evolve in 2-3

years timeframe
for mangrove: monetization and/or profit maximization
opportunities

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 Purpose

 To identify dimensions of social commerce

a. (consumer) trends
b. (industry) players – existing and new entrants
c. eco-system

 To explore international trends and key success factors

 To predict future business model of social commerce in the

next 2-3 years

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Research Methodology

Qualitative Study
identify, explore, & predict

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 Related Literature

E-Commerce Models  affiliate, community, subscription,

utility
5 Era of the Social Web  era of social relationships, social
functionality, social colonization,
social
context, social commerce
Social Commerce  models: social shopping, ratings &
reviews,
recommendations and referrals,
forums &
communities, social media
optimization,
social ads & applications 21
 Related Literature

Global Marketing  Internationalization strategy,

Hollensen
Business Cases  prevalent (mature or dominant)
markets
Academic Journals  (not comprehensive)
Journal of E-Business
Int’l Journal of Electronic Commerce
MIT Review
Research Papers on European
Conference

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 Data Collection

Secondary Data
statistical information, reports, academic journals, &
conference and summit reports

Last 3 years
(when social commerce started)

Europe, UK, US, & Russia

Japan, Korea, India, China and/or Middle East

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 This study will NOT look into

 proven & existing e-commerce models

 information and trends PRIOR to the birth of social media /

social commerce

 a deep understanding of sociological or psychological (online)

behaviors of consumer

 brand management strategies

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 Analysis

Trendspotting approach + Cross-section Analysis

macro trends which can be analyzed
per country, per region, per cluster, per model
impacts on underlying structure

Matrix of Social Commerce Trends

evolution, consolidation, emrging, new/future

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 Analysis: Option 1

Technology Hype Cycle: Gartner Group, 1995

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 Analysis: Options
4-Fielder: Models & Markets
Group Buying (GB) Private Shopping (PS)

Co-Browsing (CB)
Social Network Storefronts (SNS) Ask-Your-Network (AYN)
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 Analysis: Options
Matrix Framework: trend tool

Trends/Models GB PS SNS CB / AYN

Evolution ** x ** x

Consolidation ** ** ** x

Emerging x x ** **

New / Future ** ?? ?? ??

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 Criteria

Product/Service vs. Feature

main qualifier: focus on product/service

What’s the revenue model used?

transaction-based, premium services, ad-based

Revenue Potential
Over €100 million

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 Conclusion

Summary of Main Findings

reinforcement of answers to the thesis problems

Layout Potential Research Areas

nominate research angles for future studies

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 Timeline

Mar (9th) Thesis Problematization Presentation

Revision of Thesis Outline
Confirmation of Thesis Proposal
Review of Related Literature
Apr Data Collection
May Data Analysis
Start Draft
June Draft Revisions
Peer Review and Preliminary Evaluation
July Final Revisions
Final Preparation for Thesis Defense
(14th) Thesis Defense
thank you.

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