Shopping on Social Media Platforms Forecast To Reach $1.2 Trillion by 2025
Shopping on social media platforms is growing at a torrid pace — three times faster than traditional e-commerce platforms — and is on a pace to reach US$1.2 trillion globally by 2025, according to a study released Tuesday by an international professional services firm.
62 percent of this growth will be driven by Gen Z and millennial shoppers, reported Accenture, which defines social commerce as shopping on a social media platform where a person’s entire experience from discovery to final purchase can be performed on the platform.
Influence of Influencers
Social commerce may become mainstream for all shoppers, but right now, it’s primarily attracting younger shoppers. That’s partly because influencers are driving social commerce and younger adults and teens are much more likely to engage with and follow social media influencers.
Social media are often cited as a top channel for product discovery, as they have given rise to influencers as key components to generating awareness as part of a marketing strategy. This can help small businesses or lesser-known brands on the net. 59 percent) of social buyers are more likely to support small and medium-sized businesses through social commerce than when shopping through e-commerce websites.
Consumer Trust Issues
Consumers do cite trust as a critical barrier to purchasing on social media, and the platforms will need to solve for these barriers by improving merchandising capabilities and highlighting payment security.
Concerns voiced deal with proper purchase protection, proper returns, refunds, exchange policies, the authenticity of social sellers.
Trust is one area where traditional e-commerce players currently have an advantage over social commerce players.
Ad Scams
The quality of advertising on some social platforms can also be contributing to consumer skepticism about social commerce.
Too many ads, particularly on Facebook, are scams, that is training people not to buy off of these platforms. While Instagram and Facebook have limited or little trust as entities, social media influencers may be more trustworthy.
Some existing traditional e-commerce activity are likely to shift to social platforms. Social commerce has shown incremental growth over the past few years and is expected to continue to grow in the double-digits as the capabilities mature for end-to-end transactions. They’re already massive in China.
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