Social media shopping to reach $1.2 trillion globally by 2025
A new study of social media users in the UK, US, China, India, and Brazil by Accenture has revealed that global shopping via social media platforms, is set to grow three times as fast as traditional e-commerce as brands continue to widen their investments into social media marketing and advertising campaigns.
Accenture’s report, 'Why Shopping’s Set for a Social Revolution,' which surveyed 10,053 people, estimates that social commerce will eventually account for 17% of all e-commerce spend by 2025. With the market for online social commerce set to grow from $492 billion to $1.2 trillion by 2025, growth is predicted to be driven primarily by Gen Z and Millennial users who will account for 62% of global social commerce spend.
The report states that just under two thirds (64%) of social media users surveyed made a social commerce purchase in the last year, which Accenture estimates to reflect nearly two billion social buyers globally. A social commerce purchase refers to the entire shopping experience, from product discovery to checkout, taking place on a social media platform.
Robin Murdoch, Global Software and Platforms Industry Lead at Accenture, said in the report: “The steady rise in time spent on social media reflects how essential these platforms are in our daily life. They’re reshaping how people buy and sell, which provides platforms and brands with new opportunities for user experiences and revenue streams."
Accenture also found that clothing is set to be the top social commerce category globally by 2025 (18% of all social commerce), followed by consumer electronics (13%) and home décor (7%). Beauty and personal care, although smaller in terms of total social commerce sales, is predicted to quickly gain ground on e-commerce and capture more than 40% of digital spend on average for this category in key markets by 2025.
59% of social buyers surveyed said they are more likely to purchase from small and medium-sized businesses through social commerce than when shopping through e-commerce websites. Furthermore, 44% are more likely to buy a brand that they have not previously encountered while 63% said they are more likely to buy from the same seller again, showing the benefits of social commerce in building loyalty and driving repeat purchases.
Oliver Wright, Global Consumer Goods and Services Lead at Accenture added: "Getting social commerce right will require creators, resellers and brands to bring their products and services where the consumer is, and will be, rather than the other way around. It means working together within a dynamic ecosystem of platforms, marketplaces, social media and influencers to share data, insights and capabilities to deliver the right incentives and best consumer experience across an integrated digital marketplace."
However, half of the social media respondents indicated their concern that social commerce purchases will not be protected or refunded properly. The concern makes trust the biggest barrier to social commerce, a familiar barrier which e-commerce faced at its beginning.
Wright added: "Those who have yet to use social commerce say one reason they are held back is their lack of trust in the authenticity of social sellers, while active social commerce users point to poor policies on returns, refunds and exchanges as an area for improvement. Trust is an issue that will take time to overcome, but the sellers who focus on these areas will be better positioned to grow market share."