The pandemic has already changed the way we shop. E-commerce and contactless payments have become a way of life whether or not we prefer in-store browsing over online shopping.
In the backdrop of the Omicron variant topping infectivity charts everywhere, a new study led by Accenture has predicted that shopping on social media will reach a global market size of $1.2 trillion by 2025, growing three times faster than the rate at which traditional e-commerce grew.
The report, "Shopping Set for a Social Revolution,” examines the social commerce opportunities via an online survey of over 10,000 social media users in China, India, Brazil, the US and the UK. Social commerce means a person’s entire shopping experience—from product discovery to the check-out process—takes place on social media platforms like Facebook and Instagram. This can range from being directed to a Marks & Spencer sale on a Facebook feed to stumbling onto a niche, small-time ice-cream company on Instagram.
Just under two thirds (64 per cent) of social media users surveyed said they made a social commerce purchase in the last year, which Accenture estimates to reflect nearly 2 billion social buyers globally. Growth is predicted to be driven primarily by Gen Z and Millennial social media users, accounting for 62 per cent of global social commerce spending by 2025.
"We designed and fielded an online survey of 10,053 social media users in China, India, Brazil, the U.S. and the U.K. The online study was conducted between August 12 and September 3 2021. We also conducted in-depth interviews with shoppers and sellers from those same five markets between May 26 and June 2, 2021," says a spokesperson from Accenture.
While China will remain the most advanced market both in size and maturity, the most growth is expected to be seen in developing markets like India and Brazil. Other key insights include how nearly eight out of ten social media users in India use social commerce to make purchases. While India is a mature market, almost half of its consumers make more impulse purchases than they do planned ones. Also, users from India are more than twice as likely to sell on social platforms compared to users in the US and UK.
The report found that by 2025 the highest number of social commerce purchases globally are expected in clothing (18 per cent of all social commerce by 2025), consumer electronics (13 per cent) and home décor (7 per cent). Fresh food and snack items also represent a large product category (13 per cent) although sales are nearly exclusive to China. Beauty and personal care, although smaller in terms of total social commerce sales, is predicted to quickly gain ground on e-commerce.
“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 & Consulting, Accenture in India.
“To take advantage of this growing opportunity, it will be crucial that these social commerce platforms offer consumers the right experience built around trust and satisfaction, and broaden their appeal through the use of local languages and video interfaces," said Gupta.