BUSINESS

Social commerce gets an upgrade

E-commerce players and short-video apps are making social commerce mainstream in India

The past year saw a flurry of activity in India’s social commerce space. Meesho, a popular social commerce platform, organised its first sale event during Diwali 2021. Having acquired Shop101, an e-commerce start-up, short-format video app Roposo forayed into live commerce in October, 2021. Traditional e-commerce platforms too joined the party: Flipkart tied up with short-format video app Moj to develop video and live commerce capabilities; while Amazon India and Chingari came together to develop a shoppable video feature on the Chingari platform. Further, Myntra upped its social commerce play by venturing into live commerce in November, 2021.

In FY20, the social commerce industry in India was worth $1.5–2 billion. According to a 2021 Bain & Company report, it has the potential to grow to $16–20 billion in FY25, at a CAGR of 55-60%.

The bustling landscape  

Social commerce platforms are not going after millennials alone; they are targetting a younger cohort that follows trends set by celebrities and influencers. Roposo, for instance, has 30 million monthly active users (MAU), and targets the 18-30 demographic. Mansi Jain, vice president and general manager, Roposo, says that “consumers are moving away from the intent-based model of e-commerce to a discovery-based model”, which is more suited towards fashion, accessories, home decor, and beauty and personal care products — a big draw on social commerce platforms.

Social commerce benefits resellers, small business owners, and first-time entrepreneurs. Meesho, for instance, has 17 million entrepreneurs using its platform. During its first flagship sale event, the platform “registered a 750% surge in the number of users, with 60% orders coming in from tier IV cities like Khawzawl and Sopore,” informs Utkrishta Kumar, vice president and GM – business, Meesho. Earlier an “entrepreneur-focussed platform”, Meesho has now become a “single ecosystem connecting sellers to consumers and entrepreneurs,” Kumar adds. Flipkart, meanwhile, has launched its own platform for resellers, called Shopsy.

Direct to consumer brands (D2C), and brands in the beauty and fashion space see value in collaborating with these platforms. Trell has partnered with brands like Wella, Schwarzkopf, HUL’s Love, Beauty and Planet, Swarovski, and Skechers. “We are enabling brands to reach consumers through regional language video content. About 90% of our users are non-English speakers,” says Pulkit Agrawal, co-founder and CEO, Trell. About 80% of the platform’s users come from tier II and III cities.

Made for each other

The marriage between existing e-commerce apps and short-form video apps has set the tone for the future of social commerce in India. Manohar Singh Charan, chief financial officer, Mohalla Tech, the parent company of Moj, says that while social media apps like his are built to drive intent in product categories like fashion, cosmetics and home decor, it is the e-commerce apps that have strengths in catalogue and logistics.

Biswatma Nayak, co-founder and head of engineering, Chingari, explains that the app helps identify the products present in a video and provides affiliate links to the same or similar products on e-commerce sites.

Rajat Wahi, partner, Deloitte, says that partnerships between e-commerce apps and social media apps is likely to become the norm. “This will especially happen across vertical marketplaces and with D2C brands that are looking to scale,” he says.

Industry executives point out that multiple collaborations between one social media app and e-commerce platforms can help expand the universe of products to which the app can link. Apps like Chingari and Moj earn a commission of about 10% on purchases made by a user from those links. 

As per Bain & Company, live commerce in China accounts for 9–10% of the overall video commerce GMV. Indian platforms have been experimenting with live commerce, albeit on a smaller scale. Nykaa partnered with influencer Dolly Singh to announce special deals during live streams for its Pink Friday sale in November, 2021. Myntra launched M-Live, a platform where content creators showcase products and interact with users on the platform.

Prashant Puri, CEO and co-founder, Adlift, says that live commerce is a definitive tool that lets brands measure the clout that content creators have in making a sale. Content creators in India are cautious about their experiments with live streaming. Puri says most creators are opting for a one-time pay-out, instead of a commission per sale, because the market is still very nascent.

Read Also: Why 2022 will be the year of short video format

Follow us on Twitter, Instagram, LinkedIn, Facebook

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.



Source

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button