Report: Social commerce appetite firming up

Essence report shows shopping through social media channels is growing in popularity locally and globally and could be worth more than ecommerce transactions

Seven in 10 Australian consumers are likely to buy through social media channels, with livestreams and conversation commerce proving strong prompters for purchase, a new report indicates.

According to the latest global Essence report, Social commerce: Meeting customers where and how they shop, 75 per cent of global consumers surveyed are highly likely or likely to buy from social channels in future, including 71 per cent of Australian consumers.

The report also showed 41 per cent of global consumers had made purchases or intended to make a purchase through social media channels, with four out of five citing livestreams as well as conversational commerce as key mechanisms for instigating a purchase.

In Australia, 50 per cent of respondents had participated in live shopping and conversational commerce, with 80 per cent enjoying the shopping experience. Those who had made a purchase via social channels came in just under 35 per cent.

Locally, top items either purchased or intended for purchase via social channels are food delivery/takeaway (22 per cent), apparel (19 per cent), grocery (19 per cent) and household items (19 per cent).

Another notable finding of Essence’s report is that social commerce is bringing in higher average order value than more traditional ecommerce channels in many countries. For example, in Japan, where consumers were shown to be spending the most on social channels, the average value was US$96.74 (AUD$133.93) – US$483.67 (AUD$669.63). In the US, average orders socially came in between US$101 - $200.

In Australia, the majority of single transactions on social media were spread between AUD$10-$50 (25 per cent), $51 - $100 (28 per cent) and $101 - $200 (28 per cent). For the most part, local consumers are using credit cards, debit cards or bank transactions (74 per cent) compared to 26 per cent of people using new payment methods such as digital / mobile wallets.

As to top motivating factors influencing consumer decision-making in social commerce, ratings and reviews topped the list (36 per cent), followed by promotions and discounts (36 per cent) and product pages (35.5 per cent).

Read more: Are shoppable livestreams the next wave of ecommerce innovation?

However, the report authors were quick to point out the social commerce experience needs to be as seamless and omnichannel as other digital retail experiences. Across the purchase journey, other factors driving sales on social platforms include the convenience of social media, shipping options, ads, payment options, brand or seller awareness, engagement before sales and promotion by influencers.

Globally, China was the clear leader in social commerce, and forecasts suggest social channels could account for 13 per cent of total ecommerce sales this year. According to the Essence survey, almost 80 per cent of consumers in China purchased items on social media.

Singapore, India and Indonesia followed with 50 per cent, 49 per cent and 48 per cent, respectively. By contrast, France, Germany and Japan scored the lowest purchasing intent via social platforms at 22 per cent, 27 per cent and 24 per cent, respectively.

Across global figures, consumers 25 to 44 years’ old were the biggest social shoppers (72 per cent). Both men and the 25 to 44 age segments are skewed towards the purchase of higher value categories such as hardware, home cleaning, luxury and furniture.

But even as digital channels gain traction, Essence’s report showed 77 per cent of consumers continue to enjoy the in-store experience. This figure echoes a report released this week by Monash Business School’s Australian Consumer and Retail Studies (ACRS), which found 50 per cent of consumers prefer physical stores as their primary shopping channel.

A survey of 1500 A/NZ consumers by Emarsys released last week also found 55 per cent of post-pandemic shopper prefer in-store shopping over online.

The Essence report is based on a survey of 2200 consumers between 18 and 45 years of age in 11 countries including Australia. It was conducted by Dynata in July 2021. Essence is part of the GroupM business.

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