It looks like e-commerce is evolving in Los Angeles – Flip, the El Segundo-based video platform and e-commerce shop, acquired San Francisco online shopping marketplace Curated for $330 million in stock.
“In an age where most shopping platforms rely heavily on algorithms, our focus remains on creating a people-powered shopping experience that fosters genuine connections and personalized recommendations, ensuring our customers receive the best possible guidance and satisfaction,” Flip Chief Executive Noor Agha said in a statement.
Flip is part of an emerging branch of e-commerce known as “social commerce”, whereby brands sell items directly through social media instead of linking to websites or ordering platforms. Social commerce soared in popularity among Chinese super apps like WeChat and Alibaba. According to Statista, 84% of shoppers in China did so via social media in 2022. That same year, only 36% of U.S. shoppers could say the same.
But social commerce is gaining steam in the U.S. According to Pitchbook, social commerce funding peaked in 2021 at $96 billion. Flip has raised nearly $306 million since its inception in 2019, and other companies have popped up in the space, such as Santa Monica-based FLYR, West Hollywood-based Popshop Live and Los Angeles-based NTWRK.
“TikTok has changed the game because they’re the first good example of social commerce in the U.S.,” said Eric Dahan, chief executive of creator commerce agency Mighty Joy. “They took the playbook in China, and they applied it to the U.S.”
For the last 10 years, brands have targeted influencers with large followings to recommend products to viewers. Now, brands are seeing more success in organic recommendations from everyday creators.
That’s what Tiktok Shop capitalized on. In fact, Flip uses Tiktok as an example to describe its own venture as a scroll-through video shopping platform. Users caress handbags à la a QVC host, detailing features of the product and pointing to an add-to-cart button at the bottom of a screen. Users earn rewards by posting their reviews.
“When Facebook was still debating whether to throttle creators, TikTok fully embraced them because they understood the value from being in China,” Dahan said. “And so they built a whole affiliate platform on top of their shops business, and it’s doing extremely well.”
Flip also handles fulfillment on behalf of the brands. Unlike Tiktok Shop, which launched in the U.S. in 2023, companies on Flip are vetted for quality. The company has about 5,000 brands from kitchenware to jewelry, per Forbes.
Curated allows shoppers to access expert reviews on a variety of home and outdoor products, which Flip said allows users to research high-consideration purchases.
“Essentially what the platforms are all fighting for is to own the full customer journey from discovery down to purchase. And I think it’s existential because with cookies going away and tracking becoming more difficult off-platform, it’s really the only way to protect the ad business these companies have,” Dahan said. “By allowing customers to purchase directly on their platform, they can track the sale. TikTok owns the customer, they’re renting the customer out to the brands.”
When Aaron Levant pitched his social commerce platform, NTWRK, to investors, he said he was met with a lot of resistance.
“The number one thing I heard from people who turned us down was, ‘You’re just going to get beat by the social platforms.’ Clearly, there’s something about intentionality that’s important. If you go somewhere to watch a video and to have a sit back and relax, you may not be there to go shopping,” he said. “When people come to us, their first intention is shopping. And that is a moat around our business.”
NTWRK offers live streaming events that sell products exclusively to the platform. The company partners with celebrities and artists and has expanded to allow anyone vetted to sell on the platform.
Flip did not respond to multiple requests for comment.
