Social Commerce- The Trending Topic in Digital Commerce
The question that most ecommerce sellers are asking today is what is social commerce? Here are few facts about this type of commerce with respect to India:
- As per a Bain & Company report, the current estimated value of the sector in India between $1.5 billion to $ 2 billion today in terms of Gross Merchandise Value (GMV).
- As per a report by RedSeer, social commerce will likely touch $7 billion in GMV by 2025, driven by Tier-II cities.
- Indians are spending on average about three hours online per day on social media sites, messaging apps, and videos.
- A MoneyControl article published post lockdown stated that retailers saw 40% of their sales come in through Whatsapp. It now seems this social media platform is soon leveling up with the others (Facebook, Instagram).
- Reuters recently reported that luxury brands are being actively sold on the medium. A Swiss jeweler recently sold a Euro 300,000 diamond via Whatsapp. It is now just a matter of time that India follows suit.
That reminds us, we haven’t still answered your question as to what is social commerce? Here you go.
What is Social Commerce?
Social commerce is selling of products, from cataloguing to transaction, within the ecosystem of a social media platform. This means, to buy from you, a consumer does not have to be redirected to another site. He/she can make the purchase within the social app/site and continue browsing their Facebook newsfeed.
For example, within Instagram, you can enable in-app purchases so someone browsing through, likes a polka-dotted saree that you are selling, they can directly choose to click on the shopping link and buy it then and there.
Is it Similar to Social Media Marketing?
Social Commerce is very different from social media marketing. SMM is used to drive traffic to your website or ecommerce store on Amazon. In Facebook ads, a customer might browse through a carousel advertisement and see what is on sale on Myntra.
However, if they see a kurta they like, their click will redirect them to the Myntra app or website. It means social commerce is not equal to ecommerce. However, many ecommerce sellers are cleverly using social commerce to boost their business. We will cover this later in the article.
What are the Top Social Commerce platforms?
- Instagram and Facebook were early movers in the social commerce space; hence are more evolved. Twitter had started a “buy now” button which never took off. The platform favours texts than visuals. Whatsapp is soon catching on and quickly upgrading its user interface to make the platform friendly for buyers and sellers. Instagram caters largely to a younger audience, from late teens to late 20s or so. Facebook has a wider user-base in India currently and lets you target different consumer segments.
- Facebook marketplace was launched the summer of 2018. But India saw rampant adoption only in 2020 during COVID. It became the de facto platform for buying and selling between consumers. While Instagram has shown more potential between the two, large brands though still haven’t largely adopted it. After the introduction of ‘shoppable posts’, brands through their own page or through influencers; have encouraged in-app purchase. But the usage overall is a small percentage of large brands in India.
- Whatsapp is touted to be a game-changer, after all it has everyone on it. People who avoid ‘social media’, use Whatsapp too. It is not so visual as compared to its counterparts like Instagram though. The app has introduced catalogues which sellers can upload on their business account. But the tendency to buy, increases if a consumer can visually appreciate all aspects of the product and engage with it. In such a case, Instagram and Facebook triumph.
- Recently, social media marketing and websites have begun direct consumers to the respective Whatsapp business page. Whatsapp is conversational and buyers can interact with the brand before making a purchase.
- Surprisingly, Indian consumers who earlier found it difficult to adopt digital payments due to trust issues, have now taken well to social commerce; where most of the time, the seller is an unknown entity. By unknown, we mean, they are not large brands or sellers with an established ecommerce presence.
Perfect for New Online Businesses
Social commerce is a cost-effective way to start an online business. It’s the go-to-option when you even want to avoid the cost of a website. The caveat here is that it works for certain categories of products- especially those with a visual appeal. So entrepreneurs wanting to sell clothes, lifestyle products, home décor, stationery etc. will do well in social commerce.
One example of a brand that mainly grew its business via social commerce- Instagram to be specific is Propshop24. The founders found a need in the market for well-designed, carefully curated rare gifts. Leveraging the visual power of Instagram, the company grew a steady base of customers who in turn helped them grow further via word of mouth. If you visit the link shared, you will get an idea of how a perfectly set up social commerce shop can be maintained. Everything Mom Made and DOODLAGE is other examples of businesses that grew multi-fold on social commerce.
In the Context of Social Reselling
In a complex country like India, the lines between various types of digital commerce are blurred. While globally, social commerce is strictly for in-app or on-website purchase of products on social media; reselling platforms have added a twist to the concept. As per an EY article that talks about social commerce, social reselling platforms such as SimSim, Meesho, GlowRoad, Bulbul have made selling social.
- The people who download such apps are resellers, who then gain access to sellers and a wide range of product inventory. The seller/app owner provides shipping & logistics support. These apps smoothly integrate with social media platforms like Facebook, Instagram, and Whatsapp. The goal here is to bank on the reseller’s online social network to sell products. For example, if a reseller sees potential for a lehenga being sold among her social network and it’s the wedding season, she will share pictures of the product on her Facebook newsfeed or Instagram stories. Interested ‘friends’ and ‘followers’ will interact with her and place an order. The reseller will submit this information into the reselling app which in term would trigger the seller to ship the product to the end consumer. This twist on social commerce, which also falls under the bracket of B2C2C, relies on ‘trust’ as a major factor. It is a new age replication of the selling model which was used by Tupperware, Oriflame, etc., sans the pyramid schemes. It is the digital equivalent of your neighbor or a family friend coming home to show you a set of sarees, hoping you like one and buy one.
How Can ecommerce Sellers Use Social Commerce?
Apart from reselling platforms, regular ecommerce sellers can use social commerce to enhance their business in multiple ways. The platform may contribute in single digits to your business, but it has its benefits. Here are some practical tips which we think, you will find useful.
- Use social commerce as a listening tool. If you are into products which are highly dependent on consumer opinion and trends, such as fashion & lifestyle; you can see how visitors to your social store respond to products you showcase. Unlike ecommerce platforms like Flipkart or Amazon, where mostly only buyers write reviews, here you will find prospective consumers comment, tag their friends and respond to your products. You may just know why that wedding gown isn’t doing so well.
- Social commerce is a good tool to test prototypes. Before you place a large order for a product or start manufacturing a type of masks for example; it makes sense to ask your potential consumers, what they think. You can put up pictures and ask them for inputs, option they would like etc.
As an ecommerce seller, there are multiple tools one can use to grow one’s business. Social commerce is one of them. You can use it to start a new business, engage with your customers or use it as your sole platform for online selling. Either ways, it helps to stay updated with the way social commerce is evolving in India and use it to your advantage.
