Essence Report Helps Brands Unlock Potential Of Social Commerce
Global data and measurement-driven media agency Essence today unveiled its first-ever social commerce report, which investigates the rapidly growing trend of consumers buying products and services directly on social platforms.
The report illustrates the significant opportunity brands have in social commerce, with three out of four people surveyed saying they are likely or highly likely to buy through social media in the future. Social commerce is forecast to account for 13% of total e-commerce sales in China this year.
According to the Essence survey, 41% of respondents worldwide made purchases or intend to make purchases involving social platforms. While social media platforms have always provided an environment for buyers and sellers to interact, the survey demonstrates a shift towards organised commerce on platforms. Increasingly, social commerce enables discovery, browsing and purchasing to take place on one platform without the need to interact with any external websites or applications. Ultimately, it creates a seamless experience with fewer clicks and higher potential revenue and conversion rates.
China, unsurprisingly, is the leader in social commerce, which is forecast to account for 13% of total e-commerce sales in 2021. According to the Essence survey, almost 80% of consumers in China purchase items on social media. Singapore, India and Indonesia followed with 50%, 49% and 48%, respectively.
France, Germany and Japan showed the lowest purchasing intent via social platforms at 22%, 27% and 24%, respectively. But despite that low percentage, interest in social commerce is growing in Germany. Almost half (44%) of Gen Z customers in Germany indicated that they purchased or intend to purchase using social platforms.
In most countries, the average transaction value on social commerce is higher than the average transaction value on e-commerce transactions. Respondents in Japan recorded the highest average transaction value, between JPY11,001 and JPY55,000 (USD96.74 to USD483.67) for social commerce, followed by the United States, which had an average transaction value between USD101 and USD200. China, on the other hand, had a lower average transaction value between CNY201 and CNY500 (USD31.48 to USD78.30).
The higher value transactions look to be driven primarily by men (35%) and by millennials in the 25 to 44 age segment (72%). Both the male and the 25 to 44 age segments are skewed towards the purchase of higher-value categories such as hardware, home cleaning, luxury and furniture.
Live Shopping and Streaming
Social innovations have propelled the growth of virtual shopping. Live shopping and conversational commerce experiences increase the propensity to buy on social media. Four out of five respondents are likely to buy on social media if they have watched a live stream or participated in conversational commerce. Livestreaming has emerged as a major factor in luxury social e-commerce.
While the use of live streaming in e-commerce was primarily centred in the Asian market, it is now commonplace worldwide. Luxury brands including Hermès, Louis Vuitton and Burberry all launched their Fall or Winter 2021 shows by live streaming worldwide. Brands such as L’Oréal are also driving growth in the luxury beauty segment, partly because social media enables the brand to interact with consumers, influencers, beauty advisers and salespeople on the same platform. These innovations and collaborations are driving sales of luxury items both online and offline.
The research indicates that most consumers enjoy the live stream shopping experience, with almost half (43%) of respondents claiming to have enjoyed it and 39% of respondents highly enjoyed it. These statistics held up not only in China but also in other markets where social commerce is still in its infancy. Globally, 85% of the respondents who watched shopping live streams report that they are more likely to purchase via social media.
Aniket Basu, Senior Director, Technology and Ecommerce, at Essence, said: “We expect that the future of online shopping - and not just social commerce - will be discovery-driven. Customers tend to be exposed to new and innovative products as they browse more on social media or encounter algorithmically mediated recommendations from friends and family on social platforms. Ecommerce is maturing as a field, with social media giving brands and retailers new ways to reach audiences and new growth opportunities. In this environment, social commerce serves as a key future-proofing method for the next five years and beyond.”
Read the full report here.