Global social commerce market to hit $1.2 trillion by 2025: Accenture

That’s three times faster than traditional ecommerce is expected to grow over this period, the report stated. By 2025, social commerce is expected to account for 17% of all ecommerce spending, up to 10% currently, it added.

Social commerce refers to transactions that take place entirely within the context of a social media platform, meaning that click-through ads that take users to a brand’s own website don’t qualify. The trend is being driven primarily by Gen Z and Millennial consumers, who are expected to account for 62% of the spending, said the report.

Titled ‘Why shopping’s set for a social revolution’, the report was based on an online survey of 10,053 social media users in China, India, Brazil, the US and the UK from August 12 to September 3, 2021. It also involved in-depth interviews with shoppers and sellers from those five markets in May and June.

Fastest growth in India

The report said that though China would remain the most advanced market both in size and maturity, the highest growth would be seen in developing markets such as India and Brazil. “In these markets, social commerce has the potential to leapfrog ecommerce as new business models allow for greater participation in digital commerce across all spectrums of society,” it said.

Accenture said that India’s social commerce market is expected to grow at a 59% compound annual growth rate to $17 billion in gross merchandise value by 2025. Brazil’s market will grow at 30% CAGR to $5 billion over the same period. China’s social commerce market will grow at 26% to more than $1 trillion, while the US market will grow at 25% to just under $100 billion, less than a 10th of China’s.

Who’s buying what?

The report said that by 2025, the highest number of social commerce purchases globally are expected in clothing (18% of all social commerce by 2025), consumer electronics (13%) and home décor (7%). Fresh food and snacks are also a large product category (13%) although nearly entirely limited to China.

Accenture predicted that beauty and personal care, although a small portion of the social commerce market, is predicted to quickly gain ground on ecommerce and capture, on average, over 40% of digital spend for this category in key markets by 2025.

Other key findings

• 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 are yet to make a purchase via social commerce.
• 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.
• Almost 60% of social buyers said they were more likely to buy from a small business when shopping through social commerce versus online. And 44% said they were more likely to buy a brand that they had not previously encountered.
• Half of social media users surveyed said they were concerned that social commerce purchases would not be protected or refunded properly, making trust the biggest barrier to adoption, as it was for ecommerce in its early days.
• Trust is more important to older generations than younger generations. Older shoppers emphasise security features and value brand familiarity while younger generations are attracted to livestreams and put more faith in buyer reviews.