The pandemic has driven a sharp increase in social shopping with a quarter of all Australians now buying products on social media, according to PayPal’s 2021 eCommerce Index.

The annual study into the online shopping habits of Australians reveals spending via social has risen sharply, up 40 per cent year-on-year and up 700 per cent from 2019. While 25 per cent of Aussies are shopping on social, this number rises to one-in-three consumers under 40.

One-in-seven Australians (14 per cent) now makes a purchase via social media at least once a month. It’s great news for the 35 per cent of Australian business who are already selling on social networks, with PayPal reporting these social sales account for at least five per cent of all online business revenue.

The index, now in its sixth year, found Australians currently do more than half (52 per cent) of their shopping and bill payments online – a increase of 14 per cent on pre-pandemic levels.

It’s a trend that’s likely to continue. Post-pandemic, Australians say they’ll keep doing half (49 per cent) of their shopping and bill payments online, with consumers under 40 years planning to keep doing more than 60 per cent online.

The PayPal eCommerce Index 2021 also reveals that 82 per cent of consumers with smartphones now shop via their mobiles and almost a quarter (24 per cent) only shop online on their mobile.

It’s an increase on 2020 figures, where the impact of the pandemic’s lockdowns and restrictions saw consumers opt for desktops to browse for products instead of with mobile phones.

However, mobile commerce has now more than bounced back and with it, the level of Australian businesses optimised for mobile commerce – which has grown to 69 per cent.

Nine-in-ten Australian businesses (90 per cent) now have a social media presence however only slightly more than a third (35%) sell via social, with social commerce accounting for 5 per cent of sales across all businesses that sell partly or wholly online.

The Index did find however, that 30 per cent of businesses will be prioritising investment in social media over the next 12 months to help drive sales.

Almost half (47 per cent) of Australians that buy on social do so at least once a month with a quarter (25 per cent) buying on social at least weekly. The most popular platforms for Australian social shoppers are Facebook (70 per cent) and Instagram (42 per cent) with Snapchat and TikTok neck-and-neck at 12 per cent, Pinterest at 11 per cent and Twitch at 8 per cent.

Unlike other generations, Gen Z social shoppers’ top platform is Instagram (62 per cent) and while they still shop on Facebook (61 per cent), they are buying more through a broader range of social platforms including Snapchat (27 per cent), TikTok (21 per cent) and Twitch (16 per cent).

Peter Cowan, Managing Director of PayPal Australia, said social media has become an important channel for businesses to tell their brand story.
It’s an invaluable channel to showcase their latest products and services and connect in an authentic way with their customers. With almost half of Australian businesses posting on social media daily, it’s a natural evolution that businesses want to offer social audiences easy and immediate paths to purchase for the products and services they are seeing on their feeds.”

Australian businesses appear to have embraced social media as a marketing channel. Ninety per cent (90 per cent) promote themselves on social with 75 per cent marketing via social at least weekly and 45 per cent on a daily basis.

Always keen for a bargain, 1-in-5 Australians (21 per cent ) follow their favourite brands on social media to keep on top of sales and discounts, with Gen Z leading this behaviour (38 per cent). Gen Z shoppers also find inspiration on social media – a quarter (24 per cent) say they discover products on social media that they don’t find anywhere else (vs 14 per cent national average).

“The incredible amount of time we all spend on social media, especially younger people, is positioning social commerce as one of the biggest trends we’ll see in online shopping over the next few years with 42 per cent of Australian Gen Zs shopping on social, 70% higher than the one-in-four average,” says Cowan.

Along with price and value, Australian consumers are increasingly thinking about the impact their purchases make on the environment and society at large. However, Australian businesses appear to be lagging consumer perceptions.

While almost half of Australian consumers (46 per cent) say they prefer to buy from brands that are environmentally and socially responsible, only 28 per cent of Australian businesses say they are committed to selling or producing environmentally and socially responsible products or services.

Additionally, more than half of Australian consumers believe businesses should be held responsible for their environmental and community impact (54 per cent) and could do more to combat climate change (52 per cent), yet only around 38 per cent of businesses agree with the same statements.

And although 45 per cent of consumers prefer to buy from brands that use environmentally friendly packaging and shipping materials, only 27 per cent of businesses have adopted these measures.

Almost one-in-five Australian consumers (18 per cent) has boycotted products or services due to a brand’s corporate values or behaviour, a number that increases to 1-in-4 for Gen Z (25 per cent).

On the business side, 10 per cent have stopped selling a product because it was bad for the environment and another 10 per cent have stopped purchasing a product or service in their supply chain due to Fairtrade considerations.

Slightly more than a third (35 per cent) of businesses identified as purpose-driven or values-driven, and a quarter of businesses have mission statements that included commitments to environmental (25 per cent) or social responsibility (24 per cent).

“Consumer preference to buy from businesses that do the right thing environmentally and socially is a growing trend that represents both a challenge and an opportunity. However, paying attention to the issues that matter to your customers and paying attention to your bottom line don’t have to be mutually exclusive activities.

“When businesses take action on social and environmental issues and transparently communicate their values, it can attract new customers, build brand loyalty and drive sales,” Cowan concluded.

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