Social commerce

Social commerce (소셜 카머스) is a part of electronic commerce based on social media.

Social commerce involves using social media like Facebook, Twitter, etc., online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services. More succinctly, social commerce is the use of social network(s) in the context of e-commerce transactions.

Key words
social commerce, social media, SNS, electronic commerce, collaborative activity

History
The term social commerce was introduced by Yahoo! in November 2005 to describe a set of online collaborative shopping tools such as shared pick lists, user ratings and other user-generated content-sharing of online product information and advice.

The concept of social commerce was developed by David Beisel to denote user-generated advertorial content on e-commerce sites, and by Steve Rubel to include collaborative e-commerce tools that enable shoppers "to get advice from trusted individuals, find goods and services and then purchase them".

The social networks that spread this advice have been found to increase the customer's trust in one retailer over another.

Current status
Today, the area of social commerce has been expanded to include the range of social media tools and content used in the context of e-commerce, especially in the fashion industry.

Examplary social commerce includes:
 * customer ratings and reviews;
 * user recommendations and referrals;
 * social shopping tools (sharing the act of shopping online);
 * forums and communities;
 * social media optimization;
 * social applications; and
 * social advertising.

Technologies such as Augmented Reality have also been used with social commerce, allowing shoppers to visualize apparel items on themselves and solicit feedback through social media tools.

6 C's of Social Commerce
Discussed at the 2011 BankInter Foundation for Innovation conference on Social Technologies were the 6 C's of Social Technologies.
 * Content – The basic need to engage with customers, prospects and stakeholders through valuable published content on the web. Early examples of this were the brochure sites for organizations and this has matured into a vast and growing body of material being published in real time onto the web. Google is the organization that has been at the forefront of indexing and making findable content on the web.
 * Community – Treating the audience as a community with the objective of building sustainable relationships by providing tangible value. Early incarnations of Community were mobilized through registration and engaged via email programs, this evolved into online forums, chat-rooms and membership groups where users were able to interact with each other, an early example being Yahoo! Groups. Social Networks are the latest incarnation of community and of the many networks Facebook is the leading organization providing the platform for interpersonal interactions.
 * Commerce – Being able to fulfill customers' needs via a transactional web presence, typically online retailers, banks, insurance companies, travel sales sites provide the most useful business-to-consumer services. Business-to-business sites range from online storage and hosting to product sourcing and fulfillment services. Amazon emerged in the 90's and has gone on to dominate the B2C commerce space extending its services beyond traditional retail commerce.
 * Context – The online world is able to track real-world events and this is primarily being enabled by mobile devices. An online bill payment via Google Checkout or a checkin at a physical location via Facebook or Foursquare links a real world event to an online data entity such as a business or a place. This is a vital element to Social Commerce where the data is now available to organizations wishing to provide products and services to consumers.
 * Connection – The new online networks are defining and documenting the relationships between people – these relationships may originate in the physical world or online and may manifest in the other as a result of a connection in the first. LinkedIn, Facebook, Twitter are prime examples of online networks – Professional, Social and Casual. The relationships, the scope of those relationships and the interactions between individuals are a basis for the actions of Social Commerce.
 * Conversation – The Cluetrain Manifesto noted that all markets are conversations – this may now be reversed for Social Commerce to say that all conversations are markets. A conversation between two parties will likely surface a need that could be fulfilled, thus providing a potential market for supplier organizations. The challenge is for suppliers to be able to tap into those conversations and map those into the range of products and services that they supply. Simple examples of such 'conversations that indicate demand' are where people place objects of desire on their Pinterest board or a 'Like' of an item inside Facebook.

Using this structure, organizations wishing to transcend the notions of 'Social Media' (defined as the interaction pathways) and move to true 'Social Commerce' must aim to leverage 'Context, Connection and Conversation'

Legal issues
Since iPhones and other smartphones ushered in social commerce in Korean, SNS-based group purchase has emerged as a major retail channel in Korea, achieving rapid growth since 2010. The social commerce market, which was only 50 billion won ($46 million) in 2010, is expected to reach 3 trillion won by the end of this year.

Legal issues relating to social commerce center on fairness, transparency and quality of goods and services traded through non-face to face relationship. Some have suspected that social commerce companies have exaggerated discount rates and used counterfeit goods. To protect customers, the Korea Fair Trade Commission (KFTC) asked social commerce businesses like Coupang, Ticket Monster and Groupon to refrain from exaggerating discount rates and the number of purchasers.

Against this backdrop, on September 25, 2013, the KFTC revised the Voluntary Compliance Guidelines for Social Commerce Businesses to require them:
 * to disclose how social commerce companies calculate discounts;
 * to restrain from exaggerating the number of purchasers;
 * to adjust the 70 percent refund policy for unused coupons;
 * to provide information about applying for refunds and when to expect to receive them;
 * to stop manipulating and exaggerating the number of purchasers for products sold in a limited time;
 * to allow a third-party organizations like the Korea Association for the Protection of Intellectual Property to inspect the products in order to prevent counterfeit goods;
 * to display the original prices of products at offline stores and department stores
 * state whether the price includes tax and service charges;
 * to disclose the use period for vouchers and coupons on the product sales page; and
 * to shorten the goal for resolving consumer complaints from 72 hours to 48 hours.

The KFTC expects that the revision of the guidelines would contribute to the sound development of the rapidly growing social commerce market by enhancing consumer confidence and improving the reliability of information.