COVID-19 Pandemic was a blessing in disguise for the fashion industry as the use of social media to discover and shop for clothing gained traction. According to the State of Fashion 2022 Report by McKinsey, 74% of consumers are more confident to shop online through social media channels than they would have before COVID-19, with clothing being the most preferred product. Social shopping is gaining quick momentum and is set for exponential growth. Across most global markets, product discovery and brand engagements on social media platforms has become common; with buyers attesting that that their purchase decision was influenced by an advertisement, promotion or review of the product on the platforms.
Social commerce is part of the big evolution that the commerce industry is currently undergoing. Recent statistics reveal that the social commerce market size is expected to hit USD 958 billion in 2022, a 30.9% increase from the previous year; and is expected to continue growing into the future. In 2023, it is estimated that its market value will surpass USD 1 trillion, and rise to USD 1.6 trillion. By 2025, the market value will have soared to USD 2.9 trillion. Experts allude that the massive growth being witnessed in social commerce is driven by Chinese Consumers.
With a population of over 1.4 billion people, China boasts of the largest social media market. Social commerce accounts for 11.6% of retail e-commerce sales estimated at USD 363 billion across all sectors, a 35.5% decrease from the year 2020; and 10x more than similar sales in the US. Chinese marketers have succeeded in blurring the line between socializing and marketing through entertainment in the form of live broadcast of the products particularly in the fashion industry.
With the continued rise of a new consumer class made up of educated, young and wealthy individuals, social commerce is continuously booming. Currently social media platforms are working towards embedding the entire customer journey through in app shopping experience within the ecosystem from the point of discovery to the point of checking out. In 2020, Instagram introduced its shop feature in partnership with renowned brands making it easy for customers to either shop directly from the app or redirect to the websites selling the products.
In Kenya, the COVID-19 pandemic steered social commerce, which continues to grow albeit at a slow pace. According to a MasterCard study on consumer spending almost four out of five (79%) surveyed consumers in Kenya continue to shop online since the onset of the COVID 19 pandemic. Among the most traded products were data, apparel and Fast Moving Consumer Goods (FMCG) with over 92% of Kenyans confessing that they paid for data top-ups online, 67% for clothing and over 56% said they had bought computers and other equipment. During this period, social media turned out to be a reliable platform for finding new products and offers with 78% and 56% of the respondents attesting to having found new sellers on Facebook and Instagram.
With the fashion industry lagging behind compared to its global peers, just a handful are benefiting from social commerce. While the global fashion industry is touted to be a multibillion dollar industry, locally the industry struggles to align with the international market. The influx of second hand clothes (Mitumba) which provides a means of livelihood for over 1 million Kenyans has been the main barrier dwindling commercialization opportunities and outward growth of the industry. Compared to locally ready- made clothes and high-end brands like Gucci and Vercase, Mitumba are way popular and are preferred because they are not only cheap, affordable and of good quality, but also come in wide varieties. This inherent challenge has seen few local brands such as Denri, JojaJok, Yallo Leather, Home, El Afrique cutting a niche for themselves in the fashion industry by taking on the social commerce trends. By targeting high-end customers who are tech-savvy, these local brands are changing the perceptions on social media channels which are viewed only as a means to increase reach and drive traffic to brand-owned websites. They are borrowing from their China counterparts and bringing an in-app shopping experience for their buyers. However, they are taking on calculated risks because of limited platform functionality which is limiting their ability to go all in.
The global wave of social commerce will soon catch up with these local brands. To capture the demand for social commerce, local fashion brands need to come up with a strategy that will help them scale faster. As online shoppers place increasing importance on convenience, brands that can unlock the potential of social commerce by offering simple, frictionless shopping will be well-positioned to unlock revenue streams.
Author: Fie-Consult