Business on social media
It is already clear that the business world has been dramatically changed by the increasing use of the Internet. Certainly, social media companies are themselves big business, but how much of an impact does social media really have on the rest of commerce?
Strong ties, weak ties
Prior to the rise of social media, there was already an argument about how we use different kinds of relationships for practical purposes. For example, Mark Granovetter drew a contrast between what he called ‘strong ties’, referring to close social relationships (such as those between family and close friends), as against ‘weak ties’ (which refers to looser networks between individuals). Through his work, Mark Granovetter showed how it is often the weak ties which provide access to broader and more diverse sources of information, which may be important in, for example, hearing about a new job opportunity. But, does this ‘weak ties’ theory apply to social media?
From the evidence of our fieldwork, it seems that social media has helped people to extend and maintain these weak ties. In some cases we can also see how these have been exploited for commercial purposes. For example, Facebook in Turkey gives visibility to small businesses such as musicians, local restaurants, and private schools and, in some cases, makes particular forms of business viable that might not have been otherwise. In our Asian field sites (India and China) there is an evident trend towards using personal networks of both strong and weak ties to create entrepreneurial activism through social media. In south India, we found that educated young mothers now run part-time businesses on WhatsApp including providing home-based tuition for children. Similarly, in our industrial Chinese fieldsite, social media is increasingly seen as a promising tool for developing small-scale local businesses.
Moreover, in China the main e-commerce websites, such as Taobao are increasingly adopting certain social media features. On Taobao, buyers and sellers chat directly together. Prices can be set individually for a specific customer, allowing for online haggling. This is distinct from the equivalent non-Chinese sites such as Amazon or e-Bay, where personal identifiers tend to be removed in business transactions. Also, there is a stronger development in China of monetisation of social media platforms. These factors all suggest that we should see social media as simply part of a new fusion of personal, commercial, and communicative developments.
In terms of selling products through social media, indirect personal recommendations on social media have some discernible influence over what people buy. Around 20%  of people in our nine fieldsites reported that they bought something because they saw one of their friends with it on social media. Our evidence for the impact of social media is much less clear, however, when it concerns impersonal commerce. Indeed it is possible that here we find some negative effects.
In our English fieldsite almost all the small businesses had tried to use social media, such as Facebook, but unless there was a strong personal element, use of many of these social media platforms was not sustained. For many social media companies their business model relies on targeted advertising. But in this English fieldsite there was less concern with surveillance by the state as an abstract problem, compared to an anxiety over surveillance by companies which has been exacerbated by this practice of targeted advertising. For a company to show that they know how old you are, or that you have cancer, was a striking indication of active surveillance which then caused considerable concern.
There is also another side to this question which involves de-commodification. The history of the internet is full of examples where people have replaced purchasing with free distribution, such as of music and films. Social media is important in this respect because it has the potential for favouring social forms of exchange such as sharing, in the place of commercial forms such as buying. Although there has been much interest in this topic, including new developments such as ‘couch surfing’ and the Open Access movement, none of these new developments were particularly evident in our field sites.
So as we move across the different field sites, we can see a general conclusion which is that because these are social media, they tend to have more impact on businesses that are themselves social, based on personal contact. We also see a significant distinction between societies where people prefer to keep commercial relations and personal relations entirely separate, as opposed to places such as China, where giving money has always been viewed as the natural way of expressing love and affection. Since the entanglement of the social and the commercial is felt to be more natural, this makes the direct use of social media within commerce also more acceptable. For example, the tradition of giving money in a red envelope for significant family events has now been extended through WeChat’s virtual red envelope.
Have you ever experienced targeted advertising in your use of social media and what do you think of it? Do the examples given here make you feel that social media is useful for businesses?
- Data collected from a total of 1199 respondents across all nine field sites.