As social commerce is seeing an upward trend across the world, the segment is expected to reach $1.2 trillion by 2025, up from $492 billion in 2021. More importantly, it is expected to grow three times as fast as traditional e-commerce, according to a report released by Accenture. The growth will be driven by gen Z and millennial social media users, accounting for 62% of global social commerce spend by 2025.
Social commerce is defined as the online sales channel where a person’s entire shopping experience, from product discovery to the check-out process, takes place on a social media platform. “Driven by mobile-first consumer preferences and the launch of new hyperlocal social commerce platforms, the emerging success of social commerce in India is a testimony to the power of people and communities,” said Anurag Gupta, managing director and lead, strategy and consulting, Accenture India, said.
According to Gupta, social commerce platforms need to offer consumers the right experience built around trust and satisfaction, as well as broaden their appeal through the use of local languages and video interfaces to cash in on the opportunity. Brands need to work with a thriving ecosystem comprising platforms, creators, influencers, resellers that helps users discover and evaluate potential purchases, Gupta noted.
Among the categories purchased via social channels, clothing is expected to lead the social commerce purchases accounting for 18% share globally by 2025, followed by consumer electronics at 13% and home decor at seven percent. In China,fresh food and snack items also represent a large product category. Although the beauty and personal care category accounts for a low share currently in terms of social commerce sales,it is predicted to capture over 40% of digital spend on average for this category in key markets by 2025.
Social commerce is more likely to be used by consumers in developing countries. Eight out of ten social media users in China use social commerce to make purchases for a given category, the report added. However, the majority of social media users in the UK and the US have yet to make a purchase via social commerce.
In India, as well as in Brazil and China, users care more about features that help them discover and evaluate potential purchases. On the other hand, the users in the UK and US market place more importance on pricing and discounts. Younger generations are more attracted to live streams and put more faith in buyer reviews but older shoppers emphasise security features and value brand familiarity.
Furthermore, individual and small brands stand to benefit from the growth of social commerce as more than half (59%) of social buyers surveyed said they are more likely to support small and medium-sized businesses through social commerce than when shopping through e-commerce websites. 63% of the surveyed respondents are more likely to buy from the same seller again. The study was conducted via an online survey of over 10,000 social media users in China, India, Brazil, the US, and the UK.
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