Social commerce is giving birth to several businesses in India. This is likely to continue in the years to come with the e-commerce industry undergoing a paradigm shift, says Pulkit Agrawal
The pandemic accelerated the growth of India’s e-commerce industry and social commerce has emerged as a model of success for non-english speaking audience in India. According to research done by Statista, India’s e-commerce market is expected to grow upto US$200 billion by 2026. Moreover, as per the recent survey by PayPal, India is leading the Asian market for social commerce and is likely to turn into a $100 billion vertical of e-commerce by 2025.
Social commerce is an amalgamation of social media and e-commerce, wherein the users are getting aware and educated through community interactions for performing transactions online and it has been growing rapidly.
The reason behind such success of social commerce in the country is the strong regional connection and the role of a personal referral. Moreover, the number of buying and selling groups on social media platforms, messaging apps, video sharing or photo sharing apps is also an affirmation that online socialising and shopping are highly compatible.
This was evidently witnessed in 2020 when a large population was under lockdown, but a combination of home-grown ideas and social commerce brought success to many. Sellers have been able to establish their niche. There has been a visible growth in new sellers joining these platforms, building an online presence while increasing their customer base.
So, how are social media platforms playing a critical role?
Smartphone usage in India has grown five times in the span of five years. With affordable data charges, around 700 million smartphone users in India have affordable data as of 2020. The figures help understand how easy access via smartphones to the online market is changing the dynamics of e-commerce.
While some social media platforms have integrated ‘Buy’ buttons, other apps like Trell, which allows users to share their experiences, recommendations and reviews for various categories by making videos, have launched Trell Shop, allowing users to buy products recommended by Key Opinion Leaders on the platform via the platform itself. On the other hand, there are messaging apps which are offering success to small businesses as they use different features to showcase their products.
With many sellers using messaging apps for business, some companies have come up with chatbots for retailers, which help them manage a large number of orders with the help of Artificial Intelligence.
In this regard, it also becomes important to ask what are the key drivers leading to the rise of social commerce. A few of them are:
Personalisation: It provides both the buyer and seller with an opportunity to interact, like in a traditional market set-up. In this virtual reality, one can ask questions anytime from anywhere, clear doubts and ask for more information about the product.
Trust-building: Direct interaction between the seller and the buyer builds trust. It also makes the seller accountable in case the customer is not satisfied with the product. They can directly reach out to the seller if they want to refund or exchange. Once that trust is built between the two parties, the seller is likely to get more customers on the basis of recommendations.
Convenience: The traditional e-commerce websites require buyers to sift through a large amount of information to find exactly what they are looking for. Meanwhile, social commerce brands provide personalised sets of products to customers, which fit his/her taste.
Ease of communication: Another reason behind the increasing popularity of social commerce is the ease of communication it provides to its customers. It provides the option of letting its users converse in several Indian regional languages, further gaining trust and reliability among more and more customers. Even though e-commerce websites are also moving towards covering all native languages, social commerce is much quicker in providing end-customers with the comfort of providing information in their language.
Price advantage: The sellers on social media offer much more attractive prices as they have no overhead costs like space, manpower or dead inventory. Another reason for low prices is the lower customer acquisition cost. The platforms also offer customers the facility to bargain to get the best price in case of bulk orders or group buying.
The way forward: It is, therefore, fair to mention that social commerce is giving birth to several businesses in India. This is likely to continue in the years to come with the e-commerce industry undergoing a paradigm shift. We are also set to witness an expanding customer base in social commerce with lowering overhead expenses and increasing interest from investors and companies. A new beacon of opportunities, social commerce still has unexplored avenues. Language and ease are likely to play a major role in this shift. While e-commerce websites are here to stay, social commerce is definitely going to be a tough competitor.
(The writer is the co-founder and CEO of Trell.)