In recent years, retail shopping has undergone a transformation, particularly with the rise of social media platforms such as TikTok pivoting into e-commerce.
Livestream shopping has emerged as a new phenomenon, blurring the lines between entertainment and purchasing experiences.
This innovative approach, involving interactive demonstrations and engaging hosts, is catching the attention of regulators and academics concerned about potential shopping addiction risks.
Notably, platforms like TikTok and Shein are increasingly employing tactics to entice users into continuous spending, sometimes leading to regrettable purchases.
Shopping addiction, or oniomania, is gaining attention worldwide as studies suggest that roughly 5% of individuals might be affected. This compulsive buying behavior extends beyond occasional impulse purchases, creating significant personal and financial distress. The allure of online shopping, boosted by social media's design to keep users engaged, makes resisting impulse buys even more challenging. The e-commerce forecast for this year highlights that around 6.6% of all online sales in the US will occur through social media, with the live-streaming trend gaining popularity.
The implications of this trend are multifaceted. Social media's influence can be powerful, driving dopamine-induced highs during purchases, followed by subsequent remorse. The community aspect, with users sharing their experiences and recommendations, adds to the purchasing pressure. Some brands exploit a "fear of missing out" by showcasing idealised customer experiences or offering limited-time discounts. China's lead in developing these social-commerce models, where online retailers flourished earlier than elsewhere, showcases the global potential and challenges of this evolving retail landscape.
Looking ahead, the situation presents a conundrum for consumers, businesses, and policymakers. As Chinese firms like Temu and Shein expand their reach globally, Western users are increasingly exposed to these tactics. TikTok's significant growth in its e-commerce operations in countries like the US and Europe underscores the spread of this retail innovation. The question of regulation looms, as any moves to add friction to the seamless shopping experience could face resistance. However, the complex interplay between exploiting consumer behaviour and enhancing user experience remains a delicate balance in this new era of retail.
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Bond: A fixed-income investment in which an investor loans money to an entity that borrows the funds for a defined period at a variable or fixed interest rate.
