NEWS22 November 2021

Essence launches social commerce report

Asia Pacific News Retail Trends UK

UK/SINGAPORE – Global data media agency Essence has unveiledcreated its first social commerce report, which investigates the rapidly growing trend of consumers buying products and services directly on social platforms.

Conceptual image of female social commerce consumer

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.

According to the survey, 41% of respondents worldwide made purchases or intend to make purchases involving social platforms. China is the leader in social commerce, which is forecast to account for 13% of total e-commerce sales in 2021. Almost 80% of consumers in China purchased 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 aged below 25 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 ecommerce sites. Respondents in Japan recorded the highest average transaction value, between ¥11,001-55,000 yen ($96.74-$483.67 ) for social commerce, followed by the US, which had an average transaction value between $101 and $200. China, on the other hand, had a lower average transaction value of between ¥201-500 yuan ($31.48-$78.30 ).

The higher value transactions look to be driven primarily by men ( 35%) and by millennials aged between 25 and 44 ( 72%). Both the male and millennials are skewed towards higher value categories such as hardware, home cleaning, luxury and furniture.

The research indicates that most consumers enjoy a livestream 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 of technology and e-commerce at Essence, said: “We expect that the future of online shopping 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.”