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Shopping’s social revolution: Social media spending expected to reach $1.2T globally by 2025

by | Jan 17, 2022 | Public Relations

In the pandemic age, digital shopping has become even more ubiquitous in almost every household, and social media is playing a big part. New research from professional services firm Accenture finds that the $492 billion global social commerce industry is expected to grow three times as fast as traditional e-commerce to $1.2 trillion by 2025—driven primarily by Gen Z and Millennial social media users, accounting for 62 percent of global social commerce spend by 2025.

According to the report, Why Shopping’s Set for a Social Revolution, social commerce means a person’s entire shopping experience—from product discovery to the check-out process—takes place on a social media platform. Just under two thirds (64 percent) of social media users surveyed said they made a social commerce purchase in the last year, which Accenture estimates to reflect nearly 2 billion social buyers globally.

Shopping’s social revolution: Social media spending expected to reach $1.2T globally by 2025

“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 Accenture, in a news release. “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.”

While the opportunity is significant for large businesses, individuals and smaller brands also stand to benefit. More than half (59 percent) of social buyers surveyed said they are more likely to support small and medium-sized businesses through social commerce than when shopping through ecommerce websites. Furthermore, 63 percent 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.

Shopping’s social revolution: Social media spending expected to reach $1.2T globally by 2025

“Social commerce is a leveling force that is driven by the creativity, ingenuity and power of people. It empowers smaller brands and individuals and makes big brands reevaluate their relevance for a marketplace of millions of individuals,” said Oliver Wright, global consumer goods and services lead at Accenture, in the release. “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.”

Shopping’s social revolution: Social media spending expected to reach $1.2T globally by 2025

Half of social media users surveyed, however, indicate they are concerned that social commerce purchases will not be protected or refunded properly, making trust the biggest barrier to adoption, as it was for e-commerce at its beginning.

“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,” said Wright. “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.”

Shopping’s social revolution: Social media spending expected to reach $1.2T globally by 2025

Who is buying what?

Accenture’s report found that by 2025 the highest number of social commerce purchases globally are expected in clothing (18 percent of all social commerce by 2025), consumer electronics (13 percent) and home décor (7 percent). Fresh food and snack items also represent a large product category (13 percent) although sales are nearly exclusive to China. Beauty and personal care, although smaller in terms of total social commerce sales, is predicted to quickly gain ground on e -commerce and capture over 40 percent of digital spend on average for this category in key markets by 2025.

Among the study’s other findings:

  • Consumers in developing countries are more likely to use social commerce and do so often. Eight out of ten social media users in China use social commerce to make purchases for a given category, while the majority of social media users in the U.K. and U.S. have 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 U.K. and U.S. place more importance on pricing and discounts.
  • Trust is more important to older generations than younger generations. Older shoppers emphasize security features and value brand familiarity while younger generations are attracted to livestreams and put more faith in buyer reviews.

Shopping’s social revolution: Social media spending expected to reach $1.2T globally by 2025

Download the full report here.

Accenture Research conducted a series of studies on social commerce to better understand the nature of this opportunity. We designed and fielded an online survey of 10,053 social media users in China, India, Brazil, the U.S. and the U.K. The online study was conducted August 12th – September 3rd, 2021. We also conducted in-depth interviews with shoppers and sellers from those same five markets between May 26th and June 2nd, 2021.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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