By Daksh Sharma, Co-Founder, Iffort
Your favorite Instagrammer talks about a new eyeliner on an IG live video and you absolutely love the product. You are scrolling through your feed and spot a motion based sensor light. You are watching these videos and since you don’t want to forget the name of the brand you take a screenshot right or save these videos. A couple of days later, you go back to that screenshot or the saved video and search for the brand you discovered on the e-commerce portal. You make the purchase, and with that you complete the cycle of what is commonly referred to as “social commerce”.
Social commerce in India has witnessed a multi-folded growth in recent years primarily in the fashion, skincare, apparel categories and has witnessed high affinity among female audience. It was reported that in 2020, the e-commerce industry saw a 45 per cent growth in India. Though the pandemic was a key reason for people shopping online, social commerce platforms also led to this surge. More categories such as grocery have seen a massive upsurge in online penetration. Platforms like Instagram, Facebook, WhatsApp, Trell and Chingari dominate 65 per cent of the social commerce market in India, which says a lot about how this phenomenon is booming in India after making waves in China.
To understand the market dynamics, a report by Bain & Company pegs social commerce in India to grow to US$ 60-70 billion by 2030 accounting for four per cent of share of the e-commerce market. According to estimates, Currently, there are 157 million social commerce shoppers, which is 53 per cent of the total shoppers in India. This number is expected to grow at a rate of 45 per cent to reach around 228 million by the end of 2022. In comparison, China’s social commerce share was around 11.6 per cent of retail e-commerce sales in 2019. This gives a sense of how wide the gap between China and the rest of the world is.
In 2022, we should witness a paradigm shift in the way the social commerce industry is growing. India’s leading fashion marketplace, Myntra has recently launched its social commerce platform M-Live, an arena where fashion influencers will interact with the users and urge them to shop from the app. Similarly, short video platform Moj has joined hands with Flipkart to enable ‘live e-commerce’ on its platform. Potentially these alliances will be game-changing since the entire purchase flow happens on the video platform. Since the user is not moving back and forth across multiple platforms, the experience doesn’t get diluted.
At an infrastructure level, there are certain factors that need to be considered for a smoother roll-out. Apps need to look at support for live-video streaming and API integrations to support partner feeds. Apart from this, if you are an authorised seller having live offers via video in an e-commerce app, back-it up with a responsive customer support team. The social commerce battle will be won by brands that are conversational and prompt not only during pre-purchase and post-sales cycle. Such alliances augur well for both the platform and influencers in-terms for creating platform stickiness and driving measurable ROI.
If we look at the trends in SouthEast Asia on platforms such as Lazada, the user buying behavior is more immersive when they are inside the app. For instance, when you visit a mobile phone brand-store, you also get a video pop-up alert where a sales representative is doing a live video around the product launch. Users are incentivised for watching the video based on the time spent and also get promo-codes during the live sessions. Sales reps/Influencers educate on how to use the product and answer customer queries in real-time. This whole experience again redefines the user behavior on e-commerce portals with more stickiness and engagement during the purchase process.
For social e-commerce to scale rapidly, a key factor will be reverse integration of influencer/live video inside leading ecommerce platforms. This would be a game-changing move as e-commerce platforms have the traffic and logistics capabilities with them.
With the rise of connected and affluent millennial segments, brands would refocus their budgets and would have to look at out of the box ways instead of pure play advertising. Traditional shopping would slowly give way to more holistic engagement experiences layered with AR, Gamification and Videos. Storytelling via short-videos will be the overarching theme that will set a new benchmark in this category. The social commerce revolution in India is waiting to explode and is only bound to become the new normal starting with 2022.