Social media shopping is set to explode in popularity the next few years, and it could open up new avenues for smaller businesses.
According to a new report from consulting group Accenture, social commerce is estimated to grow three times faster than traditional e-commerce in the next four years.
Social commerce is estimated to become a $1.2 trillion global market by 2025, accounting for 16.7% of total e-commerce spend, according to Accenture.
Social media shopping includes anything from in-app purchases made on platforms such as Facebook or Instagram on a brand or influencer’s page or via livestream shopping channels, for example.
According to Accenture, unlike traditional e-commerce shopping, social commerce actually levels the playing field between online giants such as Amazon and smaller brands because it gives these smaller businesses easier access to more customers.
“Any brand, large or small, can sell via social commerce, and any individual can now become or create a ‘brand’ of their own and reach a market directly,” Accenture’s experts wrote in the company’s recent “Why shopping’s set for a social revolution” report.
“This has hugely positive implications for small businesses and entrepreneurs as they are able to reach potentially massive markets that were simply not available to them before,” the report said.
Accenture’s survey of more than 10,000 global social media users found that 59% said they were more likely to buy from smaller brands when shopping on social media versus standard online browsing. Almost half of respondents (44%) said they are more likely to buy a brand that they’d never heard of via social shopping channels.
“The math is changing dramatically,” the report said. “Rather than a handful of big retailers and brands selling to mass markets of millions, we’re now seeing millions of individuals and smaller businesses selling to one another within a vast social commerce ecosystem. The result is that big brands will continue to face growing competition from thousands of smaller businesses.”
China is currently the most advanced market in this area in terms of size and maturity and is paving the way for others. Accenture expects developing markets such as India and Brazil to see the most growth in this market over the next few years.
The trend for shopping on social media has grown during the pandemic as more consumers were trapped at home and unable to visit stores. Experts say that social commerce is expected to become the new baseline in digital shopping.
“For all intents and purposes, it becomes the next shopping mall,” Rob Garf, vice president of industry insights at Salesforce’s retail and consumer goods division, said at Insider’s IGNITION: A Retail Revolution panel in November 2020. “Don’t sleep on it,” he warned.
In a conversation with Insider in May 2021, Suketu Gandhi, a partner at management consultancy firm Kearney, said that the need for a more interactive and personal shopping experience online is driving change.
“The website is dead. It’s so unimaginative and boring right now so there has to be a replacement,” he said, commenting on the potential for the growth of livestream shopping in the US, which is still in its infancy.
Source:
Hanbury, Mary. “More Consumers Are Shopping on Social Media Platforms like Facebook and TikTok, and It Could End up Benefiting Smaller Brands.” Business Insider. Accessed January 21, 2023. https://www.businessinsider.com/social-media-shopping-growth-benefits-smaller-brands-accenture-2022-1.
Personal Analysis:
This move might have both beneficial and harmful consequences. From a positive standpoint, smaller and local businesses would have the opportunity to market their product among monopolistic brands and companies. Furthermore, it may reduce carbon emissions from transportation by encouraging shoppers to support local businesses. Online shopping also could create unique, personalized, and interactive experiences for customers, which may be more practical.
On the other side, online shopping makes it easier than ever to order goods from anywhere globally, which would negatively impact air pollution. It may also encourage consumerism culture because everything is more accessible than ever before.
