52% of Indians spend up to 5K on single transaction on social media: Essence report

Global data and measurement-driven media  agency Essence today unveiled its first-ever social commerce 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). 

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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. Livestreaming has emerged as a major factor in  luxury social ecommerce.  

While the use of livestreaming 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. 

Aniket Basu, Senior Director, Technology and Ecommerce, at Essence, 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.” 

Read the full report here.

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.