PayPal Study: 38% Of Online Shopping Purchases Made Via Social Mobile

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Social media is now a significant ecommerce force, according to new research from PayPal.

The PayPal mCommerce Index 2019, released today, reveals that businesses that sell on social media platforms see an average of almost 2-in-5 (38 per cent) sales being made via social channels.

Social commerce has grown rapidly in Australia with almost a fifth of (18 per cent) of surveyed businesses now selling via social media, an increase of 38 per cent YoY (13 per cent in 2018), with an additional 21 per cent of businesses indicating they intend to sell via social channels within the next six months.

Australian consumer adoption of social commerce is higher than business adoption, with more than a quarter (27 per cent) of surveyed consumers purchasing via social media in the last six months, a 42 per cent YoY increase (19 per cent in 2018 and 11 per cent in 2017).  Social commerce adoption is particularly high for younger generations with 38 per cent of Gen Z consumers and 36 per cent of Gen Y consumers purchasing via social media in the last six months.

Twenty-one per cent of social media shoppers purchase or pay at least weekly via social media with an average monthly spend of AU$121.  With 50 per cent more consumers buying on social (27 per cent) than businesses selling on social (18 per cent), there’s a clear opportunity for Australian businesses who are prepared to embrace social as a sales channel.

Social Commerce – Most Significant e-Commerce Trend

PayPal Australia managing director Libby Roy said: “Selling and shopping via social channels has experienced rapid growth as the line between social media and e-commerce continues to blur.  The incredible amount of time people spend – especially younger people – on social media has positioned social commerce as the biggest trend we’ll see in online commerce over the next five years.  38 per cent of Generation Z social shoppers buy on social channels at least weekly, almost double the frequency of the average social shopper (21 per cent).

“The rapid rise of social commerce highlights the growing complexity of modern retail and the pressure on brands to effectively deliver omni-channel sales and marketing across all devices, applications and platforms.  With Gen Y and Gen Z almost constantly connected, mainly on social channels, and on track to become the largest consumer generation, the importance of social commerce is obvious,” said Roy.

Australian businesses of all sizes are very active in using social media to promote their businesses.  83 per cent of surveyed businesses promote themselves via social channels, with 28 per cent promoting themselves at least daily and almost 3-in-5 (59 per cent) promoting themselves at least once a week.  Only 17 per cent of businesses do not have a social media presence.

Facebook remains the most popular social commerce platform for Australian social media shoppers (83 per cent vs 81 per cent in 2018), followed by Instagram, which has seen the largest growth (34 per cent vs 25 per cent in 2018), Snapchat (12 per cent vs. 9 per cent in 2018) and Pinterest (12 per cent vs. 6 per cent in 2018).  This order of popularity is mirrored by business social sellers with 75 per cent selling via Facebook, 56 per cent via Instagram, 33 per cent via Snapchat and 13 per cent via Pinterest.

Mobile Commerce – Convenience and Security Critical

The PayPal mCommerce Index found that mobile purchasing has continued to grow in Australia, most notably the frequency of mobile shopping has increased.  More than half (55 per cent) of Australian consumers pay or purchase via mobile devices at least weekly, up from 48 per cent in 2018 (15 per cent YoY increase).

This is even higher for younger shoppers with 73 per cent of both Gen Z and Gen Y mobile shopping at least weekly.  Additionally, almost 1-in-5 (18 per cent) consumers mobile shop on a daily basis, with almost a third (32 per cent) of Gen Z shopping on their mobiles daily.

Preference for mobile devices has also continued to rise with 41 per cent of consumers now preferring to online shop on a mobile device (smartphone or tablet – up 11 per cent YoY from 37 per cent in 2018) compared to 33 per cent on laptop/notebook and 23 per cent on a desktop.

Libby Roy, PayPal Australia Managing Director said: “In Australia, where almost 90 per cent of the population has a smartphone and people carry their phones with them everywhere – while they’re sitting at home on their couch, in the office, on public transport and in shopping centres – it’s inevitable that our shopping habits have evolved to include this indispensable tool for our lives.

“Smartphones are driving a convergence across all channels for retail, but the fundamentals of customer service have not changed.  While convenience and time-savings are key drivers, security and trust issues are the top concern (63 per cent) that make consumers less likely to interact with businesses on a mobile device,” said Libby Roy.

The gap between the number of consumers purchasing via mobile and business readiness to accept mobile payments continues to narrow.  Three quarters of consumers (73 per cent vs 72 per cent in 2018) now shop on their mobile devices (smartphones or tablet) – a figure that rises to 87 per cent for consumers under 35 years of age.  60 per cent of business respondents now optimised to accept mobile payments (vs 55 per cent in 2018) an increase of 9 per cent YoY.

 

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