Social commerce is modernizing

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

The past year has seen a surge of activity in India’s social commerce space. Meesho, a popular social commerce platform, hosted its first sales event on Diwali 2021. After acquiring Shop101, an e-commerce start-up, the short-form video app Roposo launched into the live commerce in October 2021. Traditional e-commerce platforms also joined in the fun: Flipkart partnered with the short format video application Moj to develop live video and commerce capabilities; while Amazon India and Chingari have come together to develop a purchasable video feature on the Chingari platform. Additionally, Myntra improved its social commerce game by venturing into live commerce in November 2021.

In FY20, the social commerce industry in India was worth between $ 1.5 billion and $ 2 billion. According to a 2021 report from Bain & Company, it could reach $ 16 billion to $ 20 billion in fiscal year 25, at a CAGR of 55 to 60 percent.

The lively landscape

Social commerce platforms aren’t just for millennials; they target a younger cohort who follows trends set by celebrities and influencers. Roposo, for example, has 30 million monthly active users (MAU) and targets 18-30 year olds. Mansi Jain, vice president and general manager of Roposo, says that “consumers are moving away from the intention-based e-commerce model for a discovery-based model”, which is more suited to fashion, accessories, to interior decoration and beauty. and personal care products – a big draw on social commerce platforms.

Social commerce benefits resellers, small business owners and new entrepreneurs. Meesho, for example, has 17 million entrepreneurs using its platform. During its first flagship sales event, the platform “saw a 750% increase in user numbers, with 60% of orders coming from Tier IV cities like Khawzawl and Sopore,” informs Utkrishta Kumar, vice-president. Chairman and Managing Director – Company, Meesho. Previously an “entrepreneur-driven platform,” Meesho has now grown into a “unique 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 sector see the value of working with these platforms. Trell has partnered with brands such as Wella, Schwarzkopf, HUL’s Love, Beauty and Planet, Swarovski and Skechers. “We enable brands to reach consumers with regional language video content. About 90% of our users are non-English speakers, ”says Pulkit Agrawal, co-founder and CEO of Trell. About 80% of the users of the platform come from level II and III cities.

Made for each other

The marriage between existing e-commerce applications and abbreviated video applications set the tone for the future of social commerce in India. Manohar Singh Charan, CFO of Mohalla Tech, Moj’s parent company, says that while social media apps like his are designed to drive intention in product categories like fashion, cosmetics and home decor, e-commerce applications have advantages in catalog and logistics.

Biswatma Nayak, Co-Founder and Head of Engineering, Chingari, explains that the app helps identify products in a video and provides affiliate links to the same or similar products on e-commerce sites.

Rajat Wahi, partner at Deloitte, says partnerships between e-commerce apps and social media apps will likely become the norm. “This will especially happen in vertical markets and with D2C brands looking to scale,” he said.

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

According to Bain & Company, online commerce in China accounts for 9-10% of the overall video commerce GMV. Indian platforms have experimented with live trading, albeit on a smaller scale. Nykaa partnered with influencer Dolly Singh to announce special offers during live broadcasts of her 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 of Adlift, says live commerce is a definitive tool that allows brands to measure the influence content creators have on selling. Content creators in India are cautious about their live streaming experiences. Puri says most creators go for a one-time payment, instead of a commission per sale, because the market is still very nascent.

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

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