July 24, 2021
When Pinterest introduced the Shop tab in response to the pandemic last year, it hinted at the rise of social commerce. The ascent became evident with market leader Instagram continuously introducing new features to its Shop page, like the latest ‘Drops.’ However, this proclivity towards social commerce was to be expected from social media networks. When platforms like Flipkart enter the fray, marketers need to take note.
Rise of social commerce
Flipkart’s foray into the sector is Shopsy, an application that allows users to share product catalogues with their network and then place an order on their behalf. Shopsy users are essentially resellers that receive a commission on each sale.
The Walmart-owned company is not the biggest player in the Indian social commerce market. That honour belongs to Meesho with $2.1 Billion value and 12 million entrepreneurs, followed by DealShare. But it is the most prominent name navigating the choppy waters.
Online socialising and online shopping: a compatible pair
The growth of social commerce, a marriage between social media and e-commerce, was inevitable in India, particularly with rising social media use and consumer appetite to buy things online. For the uninitiated, social commerce simply means selling (or buying) a product on Instagram or Facebook. But it is WhatsApp that’s been the linchpin.
The messaging app has become the most convenient and lucrative medium for small entrepreneurs to conduct business. For starters, it has around 400 million active users. For two, it supports direct UPI payments, QR codes and catalogue sharing. Finally, it requires zero additional investment. It’s because of these features, the WhatsApp Business has 15 million Indian users.
Social commerce growth drivers
The substructure messaging apps or social media platforms provide is just one reason social commerce in India is predicted to touch US $20 billion in the next four years. The familiar and convenient shopping experience resellers provide is another.
The direct interaction between the shopper and the seller lends considerable value since the experience is quite similar to traditional shopping. The buyer can ask questions, discuss options, and then purchase a product quickly.
In addition, the resellers often curate the products to fit both the budget and taste of their network. As a result, buyers get access to more personalized and relevant products. And if buyers desire advice from others, it is merely a photo-share away.
The expansion of D2C brands is one more contributing factor. Besides setting up their own web stores, an option 65% more brands choose in 2020 according to Unicommerce Analysis, these small brands are adept at using social platforms to sell. For example, they rely on vernacular language content to capture the Tier II and Tier III market, which forms 2/3rd of the online consumer demand in the country.
Influencers critical to success
The word-of-mouth effect of influencers, especially regional ones, is further causing social commerce spike. SimSim and BulBul, both of which use the video commerce model of social commerce stand testimony to this. The startups rely on live or recorded influencer videos to sell products to people.
It’s not just video commerce. The usual social commerce model also leverages influencers. Their influence is so great that followers want to know where they can buy the clothing, accessories, cosmetics, or gadgets they are wearing or using. This gave influencers the impetus to create their own curated stores or catalogues.
Influencers have the power to sway purchase decisions for several reasons. One, people intrinsically trust their recommendations. Two, a vary majority of people find them relatable. Three, they form a deeper and more meaningful connection with people. Influencers, in effect, act as recommendation engines, which is why social commerce has found fertile ground with them.
The gist on social commerce and influencers
The sector is still in its early stages in the country. Having said that, astute brands need to capitalize on it now and the key performance channel to drive social commerce is influencers. With the right influencer partner, brands can not only achieve the trifecta of awareness, engagement, and selling, but also collapse the length of the sales funnel.