The Changing Landscape of Social Commerce in India
The Changing Landscape of Social Commerce in India

Looking at the consumer habits in the Indian market tells us that the average Indian consumer prefers to go shopping in a physical market rather than go shopping online from the comfort of their home. Considering that there are nearly 500 million active Internet users in India, only 50 million of those have purchased a product online. The rest of the 450 million users are yet to make their first online purchase. Also, it is interesting to note that e-commerce comprises only 5 percent of the total retail sales in India. If we try to look at the possible reasons for the same, we believe that a trust factor is missing in the online shopping industry. 

For example, when visiting an offline store and asking the salesperson for the product based on our exact needs, we are more likely to purchase that product rather than when we spend hours on an e-commerce website searching for the right product that fits our budget and ending up confused on which product to buy. 
This huge number of 450 million active Internet users, added to the fact that only 5 percent of the total retail sales are happening online, has led to the rise of modern-day Social Commerce

Social commerce, in its initial stages, was based completely on impulse-based purchases. This was being achieved in two major ways - first, by hosting third-party ads on social media platforms and having a leads-based model. The other way is creating a pre-recorded video catalogue of products and running a proper e-commerce using the catalogue.

However, these impulse-based social commerce platforms will not last long because a model that focuses on intent-based purchases is going to be the future of social commerce. Intent-based purchases will make 80 percent of the entire social commerce market. An e-commerce platform will not thrive until users are visiting their platform with the intent of purchasing. This simple logic is what is going to be the driving force behind the said intent-based model. The core of this model is connecting buyers directly with the sellers. 

By having a virtual store setup, the sellers can attract virtual walk-in customers. This enables them to interact with the customers and increase their chances of making a sale. Compared to traditional e-commerce, where the products are just listed and the sellers hope that customers will purchase them, this new model proves to be much more efficient. 

Having a virtual store is essentially the same as having a new branch of your store, but without the massive rent of a physical store, and with a possible global reach. 

Now, considering from the perspective of the buyers, they are shown a variety of stores that serve their required location. It is very much like walking into a bazaar with loads of storefronts and items displayed on them, which entice the buyer to go shopping. The buyer then must choose to walk into the store of their choice and interact with the expert salesman, who will understand the customers’ exact needs and assist them along the way to find the best product in their budget to fulfil their requirements.

This also helps build an authentic human relationship between the customer and the seller. The customer is more likely to visit the same store next time there is a need for similar products. The salesman can also provide more information like special offers and sales to target specific customers. 

Studies show that 75 percent of the offline retail market revolves around known sellers. Using this observation to build a direct relationship between the buyers and sellers using modern technology like video-calling or live streaming is the next logical step in the evolution of Social Commerce.

This is a proven model in China. In the Chinese market, video-based commerce, or video-commerce, generated revenue of $63 billion in 2019, which shot up to $120 billion in 2020. 

Also, according to a report published by Bain and Sequoia, live and video-commerce in India will be a $20 billion a year industry by 2025. Essentially, what this means is that live and video-commerce is the next logical step in the development of social commerce in India.

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Embracing Social Commerce for a New Era of Retail
Embracing Social Commerce for a New Era of Retail

In the ever-evolving landscape of commerce, the transition from brick-and-mortar stores to virtual marketplaces has been nothing short of revolutionary. Over the past few decades, the advent of e-commerce has transformed the way we shop, offering unparalleled convenience, variety, and accessibility to consumers worldwide. However, as technology continues to advance and consumer preferences evolve, the traditional e-commerce model is undergoing a paradigm shift, ushering in a new era of retail: social commerce.

The roots of online retail can be traced back to the early days of the internet when pioneering companies like Amazon and eBay paved the way for the revolution in the retail industry. With the rise of e-commerce platforms, consumers gained the ability to browse and purchase products from the comfort of their own homes, transcending geographical barriers and opening up a world of possibilities.

As e-commerce continued to gain momentum, innovations such as mobile shopping and one-click checkout further accelerated the growth of online retail. With the proliferation of smartphones and the widespread availability of high-speed internet, shopping on-the-go became the new norm, allowing consumers to browse and buy products anytime, anywhere.

However, despite the convenience and accessibility of traditional e-commerce, there remained a disconnect between the online shopping experience and the social interactions that occur in physical retail environments. Recognising this gap, forward-thinking brands began to explore new ways to integrate social elements into the online shopping journey, giving rise to the phenomenon known as social commerce.

Social commerce represents the convergence of e-commerce and social media, leveraging the power of platforms like Facebook, Instagram, You-Tube and Pinterest to facilitate and enhance the shopping experience. With the introduction of features such as "buy" buttons and shoppable posts, users can now seamlessly transition from browsing their social feeds to making purchases, all within the same app.

One of the key drivers behind the rise of social commerce is user-generated content (UGC), which has become a powerful tool for brands to leverage in their marketing strategies. By encouraging customers to share their experiences, reviews, and product photos on social media, businesses can create authentic connections with their audience and build trust and credibility in ways that traditional advertising cannot replicate.

Influencer marketing has also played a significant role in the success of social commerce, with brands collaborating with social media influencers to reach new audiences and drive sales through sponsored content and affiliate partnerships. By harnessing the influence and reach of these digital tastemakers, businesses can effectively promote their products in a way that feels genuine and relatable to consumers.

Moreover, interactive experiences have become a cornerstone of social commerce. Brands leverage features such as live streams, Q&A sessions, and polls to engage and entertain their audience. By providing immersive and interactive content, businesses can create a sense of community and excitement that encourages users to actively participate in the shopping experience.

Personalization is another key aspect of social commerce that enhances the shopping journey for consumers. By leveraging data from social media profiles, businesses can deliver targeted product recommendations and advertisements tailored to users' interests and preferences, ultimately enhancing the relevance and effectiveness of their marketing efforts.

Furthermore, content monetization has emerged as a lucrative opportunity in social commerce, allowing creators to capitalize on their influence and creativity by directly generating revenue from their content.

Social commerce represents a new frontier in the world of retail, offering brands unprecedented opportunities to connect with consumers in meaningful and impactful ways. By integrating social elements into the online shopping experience, businesses are creating authentic connections, driving engagements, and ultimately, driving sales in a way that transcends traditional e-commerce.

As we continue to embrace the digital age, the evolution of online retail will undoubtedly be shaped by the innovations and possibilities of social commerce, ushering in a new era of retail for the modern consumer.


Authored By

Ashna Ruia, Founder of LehLah

Ashna Ruia, Founder, LehLah


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