49% of consumers in India purchased items on social media: Essence

A considerable majority of people are likely to buy through social media in the future, says the first-ever social commerce report by Essence.

The data and measurement-driven media agency has unveiled its report which investigates the rapidly growing trend of consumers buying products and services directly on social platforms.

The report illustrates the significant opportunity brands have in social commerce, with three out of four people surveyed saying they are likely or highly likely to buy through social media in the future. Social commerce is forecast to account for 13% of total ecommerce sales in China this year.

According to the Essence survey, 41% of respondents worldwide made purchases or intend to make purchases involving social platforms. While social media platforms have always provided an environment for buyers and sellers to interact, the survey demonstrates a shift towards organised commerce on platforms. Increasingly, social commerce enables discovery, browsing and purchasing to take place on one platform without the need to interact with any external websites or applications. Ultimately, it creates a seamless experience with fewer clicks and higher potential revenue and conversion rates.

Global trends

China, unsurprisingly, is the leader in social commerce, which is forecast to account for 13% of total ecommerce sales in 2021. According to the Essence survey, almost 80% of consumers in China purchased items on social media. Singapore, India and Indonesia followed with 50%, 49% and 48%, respectively.

France, Germany and Japan showed the lowest purchasing intent via social platforms at 22%, 27% and 24%, respectively. But despite that low percentage, interest in social commerce is growing in Germany. Almost half (44%) of Gen Z customers in Germany indicated that they purchased or intend to purchase using social platforms.

Transaction Value

In most countries, the average transaction value on social commerce is higher than the average transaction value on ecommerce 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 transaction value between USD101 and USD200. China, on the other hand, had a lower average transaction value between CNY201 and CNY500 (USD31.48 to USD78.30).

The higher value transactions look to be driven primarily by men (35%) and by millennials in the 25 to 44 age segment (72%). Both the male and the 25 to 44 age segments are skewed towards the purchase of higher value categories such as hardware, home cleaning, luxury and furniture.

Live shopping and streaming

Social innovations have propelled the growth of virtual shopping. Live shopping and conversational commerce experiences increase the propensity to buy on social media. Four out of five respondents are likely to buy on social media if they have watched a livestream or participated in conversational commerce. Live Streaming has emerged as a major factor in luxury social ecommerce.

While the use of live streaming in ecommerce was primarily centred in the Asian market, it is now commonplace worldwide. Luxury brands including Hermès, Louis Vuitton and Burberry all launched their Fall or Winter 2021 shows by livestreaming worldwide. Brands such as L’Oréal are also driving growth in the luxury beauty segment, partly because social media enables the brand to interact with consumers, influencers, beauty advisers and salespeople on the same platform. These innovations and collaborations are driving sales of luxury items both online and offline.

The research indicates that most consumers enjoy the livestream shopping experience, with almost half (43%) of respondents claiming to have enjoyed it and 39% of respondents highly enjoyed it. These statistics held up not only in China, but also in other markets where social commerce is still in its infancy. Globally, 85% of the respondents who watched shopping livestreams report that they are more likely to purchase via social media.

Essence's Senior Director, Technology and Ecommerce, Aniket Basu said: “We expect that the future of online shopping - and not just social commerce - will be discovery-driven. Customers tend to be exposed to new and innovative products as they browse more on social media or encounter algorithmically mediated recommendations from friends and family on social platforms. Ecommerce is maturing as a field, with social media giving brands and retailers new ways to reach audiences and new growth opportunities. In this environment, social commerce serves as a key future-proofing method for the next five years and beyond.”

Top 5 Highlights per Market (Source: Essence social commerce survey 2021)

United Kingdom:

• Apparel (23%), beauty (20%) and home electronics (20%) were the most purchased categories.
• More than 50% of the respondents purchased between GBP31 and GBP100.
• 52% participated in live shopping and conversational commerce, and 85% of those people enjoyed the shopping experience.
• 7 out of 10 respondents are likely to buy on social media.
• More people (53%) are still transacting using traditional ways of credit card/debit card/bank transactions/cash on delivery, versus 47% who are using new payment methods of digital/mobile wallet.

United States:

• Apparel (30%), beauty (26%) and household items (24%) were the most purchased categories.
• More than 57% of the respondents purchased between USD100 and USD200.
• 66% participated in live shopping and conversational commerce, and 88% of those people enjoyed the shopping experience.
• 66% respondents are likely to buy on social media.
• More people (67%) are still transacting using traditional ways of credit card/debit card/bank transactions/cash on delivery, versus 33% who are using new payment methods of digital/mobile wallet.

Australia:

• Apparel (19%), grocery (19%), food delivery/takeaway (22%) and household items (19%) were the most purchased categories.
• Similar % of the respondents are spending on average on a single transaction on social media: AUD10 to AUD50 (25%), AUD51 to AUD100 (28%) and AUD101 to AUD200 (28%).
• More than 50% participated in live shopping and conversational commerce but 80% of those people enjoyed the shopping experience.
• 71% of respondents are likely to buy on social media.
• More people (74%) are still transacting using traditional ways of credit card/debit card/bank transactions/cash on delivery, versus 26% who are using new payment methods of digital/mobile wallet.

China:

• Apparel (64%), grocery (64%) and food delivery/takeaways (61%) were the most purchased categories.
• Almost 50% of the Chinese respondents purchased above CNY200.
• Shopping experience was enjoyed by 9 out of 10 Chinese consumers who participated in live shopping and conversational commerce (a growing trend in the region).
• 93% of respondents are likely to buy on social media.
• Higher preference to pay via new payments methods of mobile payment (75%) and digital wallets (39%).

India:

• Beauty (39%), food delivery/takeaway (30%) and grocery (29%) were the most purchased categories.
• 52% of the respondents are spending between INR1,000 and INR5,000 on average on a single transaction on social media.
• Live shopping (39%) and conversational commerce (49%) are gaining popularity in India, as 9 out of 10 people enjoyed the shopping experience.
• 88% of the respondents (highest after China) are likely to buy via social media.
• A growing preference for newer payment methods such as digital wallets (30%) and mobile payments (34%).

Indonesia:

• Apparel (49%), food delivery/takeaway (33%) and beauty (32%) were the most purchased categories.
• 63% of the respondents are spending between IDR100K and IDR500K on average on a single transaction on social media.
• Conversational commerce (61%) is predominantly popular in Indonesia.
• 74% of the respondents are likely to buy via social media.
• A growing preference for newer payment methods such as digital wallets (30%) and mobile payments (34%).

Japan:

• Apparel (16%), household items (13%) and grocery (12%) were the most purchased categories.
• Similar % of the respondents are spending on average on a single transaction on social media: JPY1,000 to JPY5,500 (29%), JPY5,501 to JPY11,000 (25%) and JPY11,001 to JPY55,000 (31%).
• Live shopping (24%) and conversational commerce (41%) are still gaining ground in Japan, as 75% of the respondents who participated in these social formats enjoyed the shopping experience.
• 74% of the respondents are likely to buy via social media.
• Credit card/debit card is the preferred method of transaction on social media (21%).

South Korea:

• Grocery (27%), apparel (26%) and beauty (25%) were the most purchased categories.
• Amongst the social consumers who purchased luxury goods in South Korea, 29% buy mostly clothing items.
• Live shopping (59%) is preferred in South Korea, as 75% of the participants enjoyed the shopping experience.
• Social commerce is yet to be adopted, as only 53% of the past purchasers are likely to buy using social media.
• Credit card/debit card is the preferred method of transaction on social media (33%).

Singapore:

• Food delivery/takeaway (31%), apparel (28%) and grocery (27%) were the most purchased categories.
• 62% of the respondents purchased items between SGD51 and SGD200 on social media on average on a single transaction.
• High number of past social media purchasers used live shopping (32%) and conversational commerce (50%), and 8 out of 10 people enjoyed the shopping experience.
• 66% of the respondents are likely to buy via social media.
• 37% of the respondents still use credit card/debit card for social media transactions, as newer payments of digital wallet (25%) and mobile payment (25%) pick up.