Shopping is, was, and will be a consistent social experience. And the same has led to the increase of social shopping trends in e-commerce in recent years. The crossroads between social media and e-commerce is social shopping. The intention is to encourage more and more sales via social platform and generate a positive word of mouth for the brand.
Social shopping was an expected trend as both brands and social networks have been working diligently to convert social media networks into a sales platform. As the focus area for any brand is to enhance ‘customer experience’, technology helps in enhancing this experience. The next generation trend expected to reinvent the future of business is Social Commerce (S-Commerce) and this alliance of social media and e-commerce is going to create a new online shopping dynamics.
As shared by Mrigank Gupta, Director, RedSeer Consulting, "Social commerce is inherently focused on solving the trust issues of the next wave of online shoppers - as reflected in its high share of tier II-plus city consumers. We expect that a significant chunk of India's over 250 million online shoppers of 2022 and beyond will be very comfortable with social commerce and this model will play a key role in extending e-commerce to the masses”.
Additionally, by 2025, the Indian e-retail market is expected to reach upto nearly 300 to 350 million shoppers - driving the online gross merchandise value (GMV) to $100-120 billion as per the report by Flipkart.
Last year when the entire populace was busy discussing the unseen virus, social media usage got elevated, bringing in a rapid increase in e-commerce. The way to look at e-commerce has completely changed. Traditional e-commerce is giving a new path to s-commerce by building trust, creating engagement, reducing customer acquisition cost, and more is yet to come.
According to industry estimates, home-grown social commerce start-ups have raised $100 million funding by having 10 million resellers on board.
There are five predominant archetypes of social commerce consumers that have been identified by Bain Indian Social Consumer Survey - who is buying socially, why and how are they buying, and what categories they buy.
This spectacular rise of S-Commerce in India was possible because of the availability of low data cost and rise of smartphone users, the proliferation of payment gateways, the rise of short-video platforms, availability of vernacular networks, and the opportunity to build online stores without any significant investment.
According to a Forbes article, “brands are using social media like Pinterest, Instagram, WhatsApp, Snapchat, or Twitter as a sales platform where sellers and consumers both are enjoying this new shopping trend from product discovery to checkout process.”
Making Shopping a Social Experience
Every social media platform is providing a unique experience to its users by keeping innovative communication concepts like storytelling with integrated content and visuals. Instagram allows brands to tag five products in a post with the Verified Merchant Program (VMP) and a direct link to the website for a smooth purchase.
Lens Studio has made Snapchat a pioneer with the best AR experience and a clear leader in AR advertising. Facebook with its Dynamic Product Ads (DPAs) giving an option to open up ‘shop’ directly and Pinterest with its Buyable pins have also build a wide array of sellers.
S-Commerce is providing incredible benefits to businesses like brands are coming closer to customers and driving an authentic engagement, building trust and loyalty as people trust other people more than brands, making the payment process a breeze, user-friendly mobile shopping, refer and earn and the sky is the limit (Facebook alone has over 2 billion users and available in 101 languages).
India’s leading social commerce brand Meesho is leveraging a layer of ‘micro-entrepreneurs’ by empowering around 5 million entrepreneurs- of which 80 percent are women and bridging the trust deficit for predominantly unbranded products. Similarly, DealShare model ‘Building for Bharat’ is also leveraging local store network to reduce last-mile costs.
Unlock the Potential
To be in this digital ‘shop-o-sphere’ brands have to understand the ground rules to engage well with their customers. NIKE is one such brand that is known for effectively reaching out to their customers through social media. For a successful social commerce, brands should remember that social listening is more important than social media monitoring, collecting social proofs as ‘Review Matters’, understand where you stand in your niche, and efficiently designing social media strategy to reach your target.
Today 85 percent of sellers using social commerce are small, offline retailers giving sharp competition to large organized sellers on e-commerce platforms. The essential nature of social commerce is serving the unidentified need (pushing the impulse purchase), brands should identify the untapped opportunity.
As per Bain Analysis, India has the highest number of internet users (572 million) globally, with substantial room for growth (41 percent penetration) where only 8 percent (about 105 million) shops for the product online with average online spending of $286 per year which is much lower than other markets ($2966 US market).
Indian market is at a nascent stage and needs an enabling system to achieve exponential growth as core consumers need something more in addition to trust. To build trust, all social platforms are using fun and engaging video commerce (Bulbul, SimSim), Connecting Community (Facebook, Instagram), Social Reselling (Meesho, Glowroad, Shop101), Convenience (WhatsApp, Telegram), and Group Buying (DealShare, Mall91). There is a potential to drive sales on social commerce platforms with the right plumbing.
The Way Forward
Social commerce or smart e-commerce has made online shopping a universal concept. Third-party aggregators are also acting as facilitators by widening their array of services offering cutting-edge- technologies to optimize cost, time, and labor. As technology has taken a center-stage in this D2C model, the scope for social commerce expansion and evolution is high. Brands can tap the social commerce opportunity by a cohesive social commerce strategy providing experience over products and services.