🛒 Social Commerce: The Next Big Thing?
Meesho and DealShare are giving the likes of Amazon and Flipkart a run for their money. Here’s how. (Reading Time: 3 mins)
Remember the first time you were introduced to Amazon, Flipkart or Snapdeal? These apps opened the magical world of online shopping to us.
But even this magical world had something amiss: the social interactions and the bargaining sessions.
To solve this problem social commerce apps entered the scene. And how?
Two have even become unicorns: Meesho and DealShare.
In fact, their popularity reached such heights that Indian social commerce apps raised over $1 billion in 2021. What’s behind this sudden popularity?
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The Popularity of Social Commerce Apps
Social commerce is exactly what it sounds: e-commerce meets social media platforms or chat-based platforms where you can talk to the sellers.
Let's face it, we spend most of our time on social media.
Even if you don’t open Amazon every day, you'll definitely open WhatsApp or Instagram.
Let's look at the numbers:Â
Social media users: 518 million
Ecommerce users: 190 millionÂ
So, it makes sense for businesses to sell to you on social media, right?
In fact, the two social commerce unicorns both owe their success to WhatsApp despite having their own apps.
But this is not the only reason why many startups are going the social commerce route.
It is also often a low-cost alternative for MSMEs to begin selling their products. They can understand their customers, their market base and the demand for their products, before investing lakhs in building a website or an app that may or may not see any traffic.
Okay, but why are investors like Tiger Global and SoftBank investing in these social commerce startups?
Because customers love them! And venture capitalists have realised that these social commerce apps are the key to increasing online sales in India.
Right now, only 7% of retail sales in India are done via e-commerce apps despite data being super cheap. Why?
Because like we said, customers want the social touch.
They're shifting the narrative from brands to people, which is exactly what Indians want.
Also, a major reason why e-commerce sales are still so low in India is that most middle-class buyers don't find e-commerce apps very accessible.
They're often not tech-savvy or well-versed in English.
Once again, social commerce apps have found the solutions to these problems. They have made the buying and selling process as easy as texting and adding multiple regional languages.Â
In fact, one app called CoutLoot even has a bargaining feature.
Some apps are also venturing into live commerce, where you can see the products and order them in real-time.
So, obviously, customers are happy. And the numbers look good too: the social commerce industry is set to hit a market cap of $1.2 trillion by 2025!Â
This is not just a great opportunity for these apps but for the whole of India.
Many of these apps employ resellers, especially for the last-mile sales and delivery. A lot of these resellers are unemployed women, who are now getting a steady source of income.Â
And it's not just these women that these apps will help. If social commerce takes off, the creator community will also see massive benefits.
Right now over 463 million people in China earn money through social media. Imagine if we achieve even half of that number! It will be a massive boost to our economy.Â
Now, the question is will these social commerce apps end the monopoly of major e-commerce apps?
Probably not. These apps have enough money to pivot to social commerce. Wondering how?
Amazon could also start live commerce streams on its platform. Flipkart has already launched its own social commerce app Shopsy.
So, will we see a complete shift to social commerce in the coming years? And will this actually help India go digital while shopping?
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