The social commerce market is set to more than double from the current $492 billion to $1.2 trillion over the next three years, according to a new study by IT consulting firm Accenture.
The $1.2 trillion projected will account for 16.7% of the $7 trillion e-commerce total spend expected by 2025.
The study, which covered 10,000 users from India, China and Brazil, the US and UK, added that while China will remain the largest market for social commerce, India and Brazil have registered the highest growth. "In these markets, social commerce has the potential to leapfrog e-commerce as new business models allow for greater participation in digital commerce across all spectrums of society,” the report noted.
Anurag Gupta, Managing Director and Lead - Strategy & Consulting at Accenture in India said the emerging success of social commerce in India is driven by mobile-first consumer preferences and the launch of new hyperlocal social commerce platforms.
Gupta added that brands will need to work with a “thriving ecosystem”, which includes platforms, creators, influencers, and resellers who help users discover potential purchases. According to him, social commerce platforms will have to offer consumers the “right experiences built around trust and satisfaction” and “broaden their appeal” by including video interfaces and local languages”.
This thinking is in line with moves made by platforms like InMobi-owned Glance and Roposo, and other short-video apps like Moj, Bolo Live (formerly Bolo Indya) and more. Roposo pivoted to a live commerce model in October 2021, shifting focus from the short-video market. E-commerce platform Flipkart also partnered with Moj in the same month to introduce commerce through videos. Social commerce startup Meesho also neared $5 billion valuation in September 2021 with a $570 million fundraise.
To be sure, Accenture also noted that social buyers are more likely to support small businesses than large brands. Over 59% of the surveyed users said they could buy from SMBs through social commerce. And 63% said they are more likely to make repeat purchases from the same seller.
That said, there are advantages to traditional e-commerce too. “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 eCommerce at its beginning,” the report said.
Clothing, consumer electronics and fresh food and snacks were the most common social commerce purchases. The report, however, noted that these purchases were “nearly exclusive” to China. The beauty and personal care segment are expected to “quickly gain ground” and capture 40% of digital spends in this category in the next three years, the report added.