Bloomberg Línea — Whether for entertainment, social networking, communication, or even just reading the news, social networks are, for many people, the starting point for every day and everything we do, and buying and selling within social networks are expected to become much more frequent habits over the next few years.
So-called ‘social commerce’, or ‘s-commerce’, which involves the experience from the moment a product is discovered to the checkout within a social network, is one of the segments that has developed the most on all social platforms.
A recent survey by Accenture reveals that commerce within social networks will grow almost two and a half-fold over the next three years, from the current $492 billion to $1.2 trillion by 2026. This figure may still be considered low, but it already represents 16.7% of the $7 trillion transacted annually in traditional e-commerce worldwide. Furthermore, ‘social commerce’ is expected to grow three times faster than traditional e-commerce.
A few keys facts that point to s-commerce’s imminent take-off:
- 3.5 billion people use at least one social network
- On average, people spend two to four hours a day on social network platforms
- Social networks gained more than 300 million users between 2019 and 2020
China will continue to be the most advanced social commerce market, both in size and maturity, but the biggest growth will be seen in developing markets such as India and Brazil, where it is possible that e-commerce will be overtaken by social commerce, or ‘s-commerce’, by enabling greater participation from all spectrums of society.
In the United States, social commerce is expected to more than double to $99 billion by 2025, with the biggest opportunities in apparel, electronics and home decor.
“In order to understand social commerce, creators, retailers and brands will have to bring their products and services to the consumer, and no longer the other way around,” according to Oliver Wright, director and global consumer goods practice leader at Accenture. “This means working hand-in-hand across a dynamic ecosystem of platforms, marketplaces, social networks and influencers to share data, insights and capabilities, delivering the right incentives and the best consumer experience in an integrated digital marketplace,” he adds.
For Accenture, the expected growth is supported by the authenticity and trust that social connections provide to users, and which will be further explored in the businesses within each network. Platforms combine social experiences and traditional e-commerce transactions through a single purchase path, all activated on a single network.
While China leads the way in social commerce, some companies in the U.S. are making inroads into the sales channel. Apparel chain Express is empowering influencers and regular customers to become ‘style editors’, setting up store displays and being rewarded for attracting new customers and driving sales, while Nike has created its own social networking app that will bring together content about sports and style as well as productions by Generation Z users. In an environment of exchange and interaction, the brand will allow purchases to be made directly within the app.
Effects of the Pandemic
Another Accenture survey, released late last year, shows that the pandemic has forced people to adapt the way they relate and connect with relatives, friends and at work.
The survey revealed that 63% of respondents feel connected to friends and family, even virtually. In addition, 42% said they feel connected to virtual experiences, while another 49% said that virtual relationships allowed their communities to find new ways to support each other, and 62% said that the new way of connecting allowed them to get even closer to friends and family.