There are so many times when you spend hours browsing shopping websites but aren't tempted to click that buy button. Yet, when you see the same product stylishly showcased in an Instagram post, you give in. That's the persuasive power of social media, or “social commerce” in industry terminology, which is the buying and selling of products directly on social media platforms such as Facebook, Instagram, Twitter and Pinterest, among others.
The global social commerce market is currently valued at $492 billion and in the next three years it is going to grow exponentially, as findings from a new Accenture study released this week explain. It is expected to grow three times as fast as traditional e-commerce to $1.2 trillion by 2025. Who will primarily drive this growth? Gen Z and millennial social media users, who will account for 62% of global social commerce spend by 2025.
The study, titled ‘Why Shopping’s Set for a Social Revolution’, looks into the social commerce sector, analyzing everything from market size and growth to generation demographics and leading product categories. Research for this report was conducted via an online survey of over 10,000 social media users in China, India, Brazil, US and the UK.
Social commerce is a situation where a person’s entire shopping experience — from finding a product to completing the check-out process — takes place on a social media platform. According to the report, just under two thirds (64%) of social media users surveyed said they made a social commerce purchase in the last year. Around 3.5 billion people use social media worldwide – that’s 44% of the global population. On an average, consumers spend two and a half hours a day on social platforms and as we’ve experienced over the years, for many of us, social platforms are the starting point for everything we do online - be it news, entertainment or basic communication.
With more access to technology features such as augmented reality, gamification and live streaming, the next big candidate to benefit from social platforms is commerce. As the authors of the study explain, people want to buy products and services “based on recommendations and inspiration from people they trust”. These could be family and friends or authentic influencers they follow on social media.
According to the study, nearly eight out of 10 social media users (79%) in India use social commerce to make purchases. But almost half of consumers in India are still making more impulse purchases than planned buys. Users from India, the findings add, are also more than twice as likely to sell on social platforms compared to users in the US and UK.
So, who's going to be buying what? The study found that by 2025 the highest number of social commerce purchases globally are expected in clothing (which will account for 18% of all social commerce by 2025), followed by consumer electronics (13%) and home decor (7%). Fresh food and snacks will also represent a large product category (13%), although the sales of such items are nearly exclusive to China, the findings say. Beauty and personal care, although smaller in terms of total social commerce sales, is predicted to quickly gain ground on e-commerce and capture over 40% of digital spend on average for this category in key markets by 2025, the study adds.
While consumers in developing countries are more likely to use social commerce, almost half of social media users surveyed for the study, however, indicated they are concerned that social commerce purchases “will not be protected or refunded properly”. The trust element, the study explains, is very important to older shoppers, who prioritize security features and value brand familiarity. The younger generations, meanwhile, are attracted to livestreams and put more faith in buyer reviews before purchasing a product.
Interestingly, more than half (59%) of social buyers surveyed for the study said they were more likely to support small and medium-sized businesses through social commerce than when shopping through e-commerce websites. To add to that, 63% of the consumers said they are more likely to buy from the same seller again.
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