Social media shopping to hit $1.2trn within three years - Accenture report
Shopping via social media platforms has long been talked about as the future of fashion retail and now a new study from Accenture says the $492 billion global social commerce industry is expected to grow three times as fast as traditional e-commerce to reach $1.2 trillion by 2025.
This growth will be driven mainly by Gen Z and Millennial social media users, accounting for 62% of global social commerce spend by 2025. Although the remaining 38% means that older generations can’t be ignored.
The Why Shopping’s Set for a Social Revolution report comes as the firm’s research shows that 64% of the 10,000+ social media users surveyed said they made a social commerce purchase in the last year. That means the entire shopping experience — from product discovery to checkout — took place on a social media platform. And Accenture said that 64% figure translates into nearly 2 billion social buyers globally.
The top social commerce category globally is expected to be clothing in 2025 (18% of all social commerce by that date), followed by consumer electronics (13%) and home décor (7%). The beauty & personal care category, 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 also said consumers in developing countries are more likely to use social commerce and do so often. Eight out of 10 social media users in China use social commerce to make purchases for a given category, while the majority of social media users in the UK and US have yet to make a purchase via the channel. However, as we’ve seen with things like livestream adoption, this could quickly change as consumers discover the potential of new shopping channels.
The report also said shoppers in China, India, and Brazil care more about features that help them discover and evaluate potential purchases, while those in the UK and US place more importance on pricing and discounts.
“The pandemic showed how much people use social platforms as the entry point for everything they do online — news, entertainment and communication,” said Robin Murdoch, global Software & Platforms industry lead at the company. “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.”
It added that while this development is key for large businesses, it also means that individuals and smaller brands can benefit. Some 59% of social buyers surveyed said they’re “more likely to support small and medium-sized businesses” through social commerce than when shopping online in general. And 63% are more likely to buy from the same seller again.
That said, there are hurdles to jump too as half of social media users surveyed are concerned that social commerce purchases won’t be protected or refunded properly, “making trust the biggest barrier to adoption, as it was for e-commerce at its beginning”.
Trust is a big issue and is more important to older generations than younger shoppers. Older shoppers emphasise security features and value brand familiarity while younger generations are attracted to livestreams and put more faith in buyer reviews.
With all of this in mind, Oliver Wright, global Consumer Goods and Services lead at Accenture, sees huge potential in the channel and called social commerce “a levelling force that is driven by the creativity, ingenuity and power of people”. He said it “empowers smaller brands and individuals and makes big brands reevaluate their relevance for a marketplace of millions of individuals”.
But he added that getting it right will mean creators, resellers and brands will have to “bring their products and services where the consumer is and will be, rather than the other way around”.
They will also have to work 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”.
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