20100309.LCUNANAN-ThesisProposal | Social Networking Service | Communication

International Trends & The Future of Social Commerce

Thesis Proposal
by Louie Cunanan
Intern, Mangrove Capital Partners

a peek into the VC world






(matrix partners)



(accel partners & new entreprise associates)



(charles river ventures)



(split rock partners)






(montreal start-up)



(kleiner perkins)



(mangrove capital partners)



(kodiak venture partners)


what is social commerce?


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 ³advertorial 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


e-commerce + social media




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?



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



To identify dimensions of social commerce a. (consumer) trends b. (industry) players ² 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


Research Methodology

Qualitative Study
identify, explore, & predict


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

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


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

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


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


Analysis: Option 1
Technology Hype Cycle: Gartner Group, 1995


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

Social Network Storefronts (SNS)

Co-Browsing (CB) Ask-Your-Network (AYN)

Analysis: Options
Matrix Framework: trend tool
Trends/Models Evolution GB PS SNS CB / AYN

** ** x **

x ** x ??

** ** ** ??

x x



** ??

New / Future

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 ½100 million


Summary of Main Findings reinforcement of answers to the thesis problems

Layout Potential Research Areas nominate research angles for future studies


(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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