Global social commerce, i.e. shopping via social media platforms, will grow three times as fast as traditional online retail by 2025. According to a report by the consulting firm Accenture, its volume is expected to grow from $492 billion to $1.2 trillion.
Already today, 10 percent of all online purchases are made through social commerce, and in the next three years that number is expected to climb to 17 percent. This growth will be primarily driven by Gen Z and Millennial social media users, adds Accenture, who will account for about 62 percent of global social commerce spend by 2025.
The Accenture report ‘Why Shopping’s Set for a Social Revolution’ shows that 64 percent of 10,053 social media users surveyed in the UK, US, China, India and Brazil said they had made a purchase on social media in the past year . This means that the entire shopping experience, from product discovery to checkout, took place on one social media platform. Accenture estimates that there are almost two billion users of social shopping worldwide.
Robin Murdoch, Global Software and Platforms Industry Lead at Accenture, said in a statement: “The pandemic has shown just how much people are using social platforms as an entry point for everything they do online – news, entertainment and communication.”
“The steady increase in time spent on social media shows how important these platforms are in our daily lives. They are changing the way people buy and sell, giving platforms and brands new opportunities for experiences and revenue streams.”
Social commerce is projected to reach $1.2 trillion globally by 2025
The report finds that the most important category of social commerce in 2025 is expected to be clothing (18 percent of all social commerce up to that point), followed by consumer electronics (13 percent) and home textiles (7 percent). The beauty and personal care category, while smaller as a percentage of total social commerce sales, is expected to rapidly outperform traditional e-commerce, averaging more than 40 percent of digital spend for this category by 2025 across major markets .
Accenture also adds that people in developing countries are more likely and more likely to use social commerce. Eight out of ten social media users in China use social commerce to make purchases in a specific category, while the majority of social media users in the UK and US have never made a purchase through this channel.
The report also states that customers in China, India and Brazil place more value on features that help them discover and evaluate potential purchases, while people in the UK and US place more value on prices and discounts.
Oliver Wright, Accenture’s head of consumer products and services, said, “Social commerce is a leveling force fueled by the creativity, ingenuity and power of people. It empowers smaller brands and individuals, and forces big brands to reassess their relevance to a market of millions.
“To get social commerce right, creatives, resellers and brands need to bring their products and services to where people are and will be, not the other way around. It means collaborating within a dynamic ecosystem of platforms, marketplaces, social media and influencers to share data, insights and skills to provide the right incentives and the best shopping experience in an integrated digital marketplace.”
However, half of the social media users surveyed said they are concerned that social commerce purchases are not properly protected or refunded, “making trust the biggest barrier to adoption, as it is for consumers.” Online retail was in its infancy,” explains Accenture.
Trust is more important for older generations than for younger constituencies, the report explains. Older shoppers value safety features and brand familiarity, while younger generations are drawn to live streams and trust reviews more.
Wright adds, “Those who are new to social commerce cite a lack of confidence in the authenticity of social media merchants as the reason for their reluctance, while active social commerce users cite a lack of policies for returns, refunds, and exchanges as an area for improvement.”
“Trust in this area is an issue that will take time to overcome, but those who focus on these areas will be better positioned to increase their market share,” the expert said.
This article was previously published on FashionUnited.uk. Translation and editing: Barbara Russ.