In Singapore's online shopping industry, Gen Zers are at the forefront, driving trends such as livestreaming and 'shoppertainment.'

• With the increasing use of social media for selling merchandise, online shoppers in Singapore are discovering new buying experiences, and Gen Zers are driving this trend.
• The spending power of Gen Zers has been steadily increasing over the past decade, making them an increasingly important consumer segment. In 2022, Singapore's median graduate salary was S$4,200, up from S$3,700 in 2020, according to Meta's digital consumer report.

In Singapore, as businesses increasingly use social media for sales, Gen Zers are driving the trend of exploring new online shopping experiences.

A 2023 report by Meta and Bain & Company found that 72% of Gen Zers in Singapore prefer online shopping.

A report revealed that Gen Zers, born between 1997 and 2012, are the leaders in discovering, evaluating, and purchasing online, with 45% of them doing so through social media.

Social media platforms like TikTok and Facebook Marketplace now offer e-commerce features, allowing users to shop directly within the application without having to leave.

The social commerce industry in Singapore is expected to experience significant growth over the next five years, reaching an estimated $6.99 billion by 2028, as a result of shopping on social media, according to a report from Research and Markets.

Social media appeal

A 2023 survey by British analytics firm YouGov revealed that Gen Zers prefer to shop on TikTok and Instagram over Facebook, which is more popular among older generations.

Over 15 million businesses in Southeast Asia utilize TikTok to market their products to a monthly audience of 325 million users, according to a statement from the content platform.

According to a 2022 report by TikTok, the market value of videos that combine entertainment and informational content to drive online purchases, commonly referred to as "shoppertainment," has reached $500 billion.

TikTok stated that businesses can attract customers by creating entertaining, trustworthy, and motivating content that fulfills their emotional requirements.

Gen Zers are drawn to the emotional engagement of "shoppertainment" because they prefer to purchase from content creators who offer a sense of authenticity with their products, according to Lawrence Loh, professor of strategy and policy at NUS Business School.

He stated that compared to other generations, they are more forthright about their purchasing decisions.

Using livestreaming functions on social media platforms can help creators appeal to Gen Zers' preference for credibility while promoting products.

Unlike the static shopping experience of e-commerce websites such as Lazada or China’s Taobao, TikTok’s livestreamers engage with their audience for three or four hours at a time, according to Tracy Loh, senior lecturer of communication management at Singapore Management University (SMU).

"Gaining more user trust is more effective when it comes from a friend's recommendation, especially for personal or intimate products like cosmetics or health," she said.

Wu Zu An, a frequent online shopper, made her first social media purchase via TikTok after watching a creator test a particular cosmetics product out during a livestream.

The 22-year-old Singaporean could see that the product worked once she applied it to her face.

From now on, Wu intends to utilize TikTok for shopping cosmetics.

‘One-stop shop’

According to Statista's e-commerce database, the majority of accounts on TikTok and Instagram are nano-influencers with 1,000 to 10,000 followers who produce content.

Niche recommendations catering to Gen Zers' selective preferences are what attract small-scale influencers, according to Loh from NUS.

Gen Zers are heavily influenced by social media nano-influencers when making purchasing decisions, as they seek products that align with their values and tastes.

He stated that millennials born between 1981 and 1996 tend to prefer big brand names or macro-influencers such as celebrities or sports personalities.

SMU's Loh stated that traditional e-commerce sites are adopting social media strategies by increasing their influencer base, utilizing smaller-scale influencers for local campaigns, and targeting Gen Z consumers.

Instead of using global celebrities like Cristiano Ronaldo, Shopee is now featuring younger, local artistes in its Singaporean campaigns, according to her.

Gen Zers can easily purchase products recommended by influencers through social media commerce, which integrates search tools with direct purchasing capabilities.

The "shoppable posts" feature on Instagram enables businesses to tag products directly in their photos or videos, allowing users to quickly access the checkout page with just a few taps.

Gen Zs can complete their shopping needs in one place, as it eliminates the need to go to additional platforms," she said to CNBC. "The fewer steps a person has to take, the more likely they are to make a purchase.

Why Gen Zers matter

The spending power of Gen Zers has been steadily increasing over the past decade, making them an increasingly important consumer segment. In 2022, Singapore's median graduate salary was S$4,200, up from S$3,700 in 2020, according to Meta's digital consumer report.

According to SMU's Loh, young shoppers are becoming more financially secure and have no reservations about spending their money on specific products.

She stated that although it has not been fully realized, there is significant potential, so give it a few more years for their income to increase.

Loh from NUS stated that Gen Zers not only possess financial resources but also wield social influence, as they have the ability to impact other generations' purchasing decisions.

Gen Zs are skilled communicators and often serve as role models for their elders, impacting their shopping habits and lifestyles. Some older Singaporeans have even adopted the same shopping platforms as Gen Zers.