Social media has changed the way of communication and information exchange while e-commerce was a big inno- vation in retail business. The merge of social media and e- commerce has created social e-commerce which is a new phenomenon in retail business during past few years. More and more companies develop social e-commerce and there is a need to study this phenomenon in more depth. The purpose of this master thesis is to analyse   and   explain   the   phenomena  of   social   e- commerce and show the reasons behind the decision to develop this   strategy   in  retail  companies.  Social  e- commerce is studied  from strategic renewal perspective and main focus lies on factors which are considered while developing the strategy of social e-commerce. Method: Social e-commerce is a new and not much studied phe- nomenon, therefore, an inductive approach and case study research method were chosen for this re- search. Five retail companies were chosen as case studies. During the research process secondary and primary data were collected. The main source of information for the case studies was semi-structured in-depth interviews. Conclusion: The authors have found that interviewed companies per- ceived the implementation of social e-commerce as a pro- active behaviour with great potential capabilities for their business such as gaining market share, brand awareness, building relationships or increasing the length and level of interactions. Also, the study of four main elements of so- cial e-commerce from strategic renewal perspective re- vealed the motives, social media decisions, challenges and outcomes to incorporate social e-commerce.