Europe’s social commerce industry to reach $4.2 billion by 2028, report
Social commerce industry in Europe is expected to grow by 36.5% on annual basis to reach $67, 203.7 million in 2022.
The social commerce industry is expected to grow steadily over the forecast period, recording a CAGR of 36.0% during 2022-2028. The social commerce GMV in the country will increase from US$67, 203.7 million in 2022 to reach US$4, 24, 732.2 million by 2028.
The growing interaction of consumers with brands on social media platforms, coupled with shopping functionalities offered by Facebook, Instagram, and TikTok, have supported the rise of social commerce in Europe. With the trend gaining momentum in this region, social networking platforms, retailers, and tech giants have increased their investments in the social commerce space in the last eight quarters.
Fashion retailers are entering into the social commerce space of the United Kingdom
According to publisher's recent survey, nearly 25% of the shoppers purchased apparel, 20% of shoppers purchased beauty products, and around 19.5% of shoppers bought home electronics through social commerce in the United Kingdom. Notably, more than 50% of the population in the country depends on social commerce for buying fashion products. Consequently, more and more fashion retailers are entering this space to reach out directly to the customers and also prospective customers, where they spend maximum time.
London-based, Baukjen womenswear brand partnered with Curalate, a visual content monetization platform, to allow the 290,000 Instagram followers to upload their looks wearing its products with #BaukjenStyle. This enabled the shoppers to find products and styles online through intelligent image recognition technology, helping the brand engage with customers globally.
With successful customer acquisition, its sister brand, Isabella Oliver, also injected social commerce into its business model with Curalate to expand its market share in the country.
Similarly, fashion brand Isawitfirst partnered with the country's free live streaming social commerce app, OOOOO, to deliver a livestreamed interactive shopping experience for the customers.
Also, the beauty brand L'Oreal UK and Ireland partnered with TikTok to enable its customers in the United Kingdom to buy products from its beauty brands Garnier and NYX Professional Make-Up products through the TikTok app.
Over the last four to eight quarters, smartphone and internet penetration rates increased significantly in Germany, which has resulted in more and more online shoppers in the country. By 2025, Germany is expected to have approximately 69 million online shoppers. Notably, this growth in the number of online shoppers, as well as the number of social media users in the country, will keep supporting the growth of the overall social commerce market from the short to medium-term perspective.
A substantial increase in the number of active social media users is driving market growth in Germany
In 2019, the number of people active on social media platforms stood at around 31.5 million, representing nearly 45% of the total population. However, because of the global pandemic outbreak, the number of active users surged significantly in the country over the last four to eight quarters. According to the Q4 Social Commerce Market Survey, the number of active users increased to more than 65 million in 2021, which represents around 79% of the total population in the country.
Moreover, mobile adoption among consumers also became more prominent during the Covid-19 outbreak. As many as 64 million people access social media platforms through their mobile phones in Germany. This rise in mobile adoption among consumers has also supported the growth of social commerce over the last four to eight quarters. The publisher expects the trend to continue from the short to medium-term perspective, which will thereby keep supporting the overall market growth in the country.
Strategic partnerships are rising to tap the German social commerce market
Amid the growing trend of social shopping among consumers, social media platforms and e-commerce enablers are entering into strategic partnerships to provide businesses with the tools to bring their products online.
In April 2021, Pinterest entered into a strategic partnership with Shopify to enable merchants of Shopify to sell their products on the social media platform. Apart from Germany, the two firms have extended their partnership in 26 more countries, including Australia, Brazil, and the United Kingdom.
Under the strategic partnership, Shopify merchants advertising on Pinterest will now have access to dynamic re-targeting, allowing the merchants to re-engage with Pinners who have previously shown interest in their products on the social media platform. Besides, merchants will also have access to more social commerce tools launched by Pinterest on their platform.
As the online shopping method continues to gain momentum among consumers in France, big retailers are also looking to capitalize on the trend to further increase their sales numbers in the country. French retailers are conducting a number of live shopping events to gain increasing traction from social consumers in the country. Moreover, even global players are looking to enter the French social commerce industry in 2022 to capitalize on the growing social commerce trend and to gain market share.
Social commerce companies are focusing on promoting high-end products to gain more profit
While the social commerce sector is growing in France, consumers are still hesitant when it comes to purchasing products from social networking platforms. This behavior of the French consumer is also reflected in their spending on social media platforms. According to publisher's recent survey, nearly 80% of the French consumers who have made purchases from social media platforms buy for less than US$55.
The mistrust among the French consumers is one of the factors why consumers prefer buying low-priced products. Consequently, the publisher expects social media platforms to adopt strategic initiatives which can help them spread awareness and create trust among consumers, which can further help in increasing the overall transaction value and volume in the country.
Among the various platforms used by consumers to complete social commerce purchases, almost 75% of the consumers prefer Facebook. On the other hand, Instagram is preferred by approximately 25%, whereas Snapchat is preferred by 10.8% of the consumers in the country.