Essence’s Social Commerce Report said that while the use of live streaming in e-commerce was mainly focused on the Asian market, it is now common around the world. Luxury brands like Hermès, Louis Vuitton and Burberry have all kicked off their fall or winter 2021 runways by broadcasting live worldwide.
Brands such as L’Oréal are also driving growth in the luxury beauty segment, in part because social media allows the brand to interact with consumers, influencers, beauty consultants and sellers on the same platform. . These innovations and collaborations are driving sales of luxury items both online and offline, he added.
The report, which studies the growing trend of consumers to purchase products and services directly from social platforms, illustrates the significant opportunities that brands have in social commerce. With three in four respondents saying they are likely or very likely to buy through social media in the future. Social commerce is expected to account for 13% of total e-commerce sales in China this year.
Essence conducted a survey of 2,200 people (aged 18 to 45) in 11 countries about their thoughts and opinions on social commerce. This survey took place in July 2021.
The report adds that 41% of people polled globally have made purchases or intend to make purchases through social platforms. While social media platforms have always provided an environment of interaction for buyers and sellers, the survey demonstrates a shift towards organized commerce on the platforms. Increasingly, social commerce allows discovery, browsing, and shopping to take place on a platform without the need to interact with external websites or applications. Ultimately, this creates a seamless experience with fewer clicks and higher potential revenue and conversion rates, he added.
Research indicates that most consumers enjoy it, with almost half (43 percent) of respondents saying they enjoyed it and 39 percent of respondents greatly appreciated it. These statistics have held up not only in China, but also in other markets where social commerce is still in its infancy. Globally, 85% of respondents who have watched live broadcasts of shopping say they are more likely to buy through social media.
Not surprisingly, China is the leader in social commerce, which is expected to account for 13% of total e-commerce sales in 2021. Almost 80% of Chinese consumers have purchased items on social media. Singapore, India and Indonesia followed with 50 percent, 49 percent and 48 percent, respectively.
France, Germany and Japan posted the lowest purchasing intentions via social platforms with 22%, 27% and 24% respectively. But despite this low percentage, interest in social commerce is increasing in Germany. Almost half (44%) of Gen Z customers in Germany said they had bought or intended to buy through social platforms.
In most countries, the average value of social commerce transactions is higher than the average transaction value of 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 value transactions between USD101 and USD200. China, on the other hand, had a lower average transaction value between CNY201 and CNY500 ($ 31.48 to $ 78.30).
Higher value transactions appear to be driven primarily by males (35%) and Millennials in the 25-44 segment (72%). Both males and 25-44 year olds are geared toward purchasing higher value categories such as hardware, household cleaning, luxury goods, and furnishings.
Aniket Basu, Senior Director of Technology and Ecommerce at Essence, said: “We expect the future of online shopping – and not just social commerce – to be discovery driven. Customers tend to be exposed to new and innovative products as they browse more on social media or come across algorithmic recommendations from friends and family on social platforms. Ecommerce is maturing as a field, with social media providing brands and retailers with new ways to reach their audiences and new opportunities for growth. In this environment, social commerce is a key method of sustainability for the next five years and beyond. “