Saturday, May 25, 2024
HomeStoriesShareChat Closes Down Live Commerce; Company Calls It a Temporary Shutdown

ShareChat Closes Down Live Commerce; Company Calls It a Temporary Shutdown

ShareChat Closes Down Live Commerce; Company Calls It a Temporary Shutdown

Highlights

  • According to a source, the business decided in December last year, almost two years after the Google-backed company first entered the rapidly expanding live commerce industry.
  • The live commerce operation has been scaled back, according to a spokeswoman for ShareChat, but the company is still optimistic about the industry.
  • According to sources, the live commerce business reportedly did not perform well, so they discreetly left.

ShareChat, an Indian social media and content-sharing platform, have decided to shut down its live commerce business. This decision has come as a surprise to many industry experts who had high hopes for this sector. The company released a statement on February 10, 2023, stating that the decision was made to scale down its operations temporarily. The move comes as the company’s inability to meet the high demand for the service, which has led to some operational challenges.

ShareChat launched its live commerce business in mid-2022 with the aim of creating a seamless shopping experience for its users. The platform had integrated several popular e-commerce stores, such as Flipkart and Amazon, onto its platform, allowing users to shop while they browsed through content on the app.

ShareChat

The live commerce business quickly gained popularity among the platform’s users, with many praising the convenience of shopping directly from the app. The feature was also popular among small and medium-sized businesses, which could sell their products directly to ShareChat’s large user base.

However, as the feature gained popularity, the platform faced some operational challenges. The company struggled to meet the high demand for the service, which led to issues with product delivery and order tracking. Additionally, the company faced challenges integrating new e-commerce stores onto the platform, leading to user frustration.

Temporary Measure

ShareChat has stated that the decision to shut down the live commerce business is a temporary measure and plans to resume operations in the future. The company has indicated that it will use the downtime to address some of the operational challenges it faces and work on improving the overall user experience.

Despite the company’s assurances that the shutdown is temporary, some industry experts have expressed concern about the move. The live commerce sector is seen as a significant growth area in the e-commerce industry, with many platforms investing heavily in the space. ShareChat’s decision to shut down its business could be seen as a sign that the sector is facing challenges that are not yet fully understood.

However, it is essential to note that ShareChat is one of many platforms to have faced challenges in the live commerce space. Other platforms, such as Instagram and TikTok, have also struggled to create a seamless shopping experience for their users. The sector is still in its early stages, and many companies will likely face challenges as they navigate this new terrain.

Challenges

Despite the challenges faced by the live commerce sector, it is clear that the industry has vast growth potential. With more and more people shopping online and social media becoming an increasingly important part of people’s lives, it is clear that the integration of e-commerce and social media is the way of the future.

ShareChat’s decision to shut down its live commerce business is a setback for the sector, but it is essential to remember that setbacks are a natural part of the business world. Companies that can learn from their mistakes, and adapt to new challenges, are the ones that will succeed in the long run.

According to a reliable source, the Google-backed social media unicorn had high hopes for its live commerce operation. This was in addition to the adverts, gamification, and prizes the company had been testing. “But, they left discreetly since their live commerce business was ineffective,” he continued.

The change most likely occurred when ShareChat stated it would be laying off 20% of its personnel, or close to 500 individuals, to restructure its business. Going into 2023, we will be razor-focused on our monetization initiatives. We reallocated resources on projects with a higher weight on immediate wins, either in the form of improved revenue or decreased expenses, as part of our 2023 ambitions, the spokesperson added.

The representative said, “Live Commerce is a crucial long-term strategic bet for us, and we’ll keep investing in growing it over time. Yet, we have set the financial expenditure for this area in the short term. Despite this, it has not yet been shut down. We are still optimistic about this market in India.

“E-commerce is still a vast market, and social Commerce has great potential in India in the long run. Our teams have undergone an organizational-wide restructuring as a result of these initiatives. Nevertheless, the spokeswoman stated that we cannot speak to specific roles that may have been impacted due to this.

Is the Flipkart-ShareChat deal in jeopardy?

Flipkart, a large online retailer owned by Walmart, established a multi-year strategic partnership with ShareChat in October 2021. Short video platforms like Chingari, Trell, Roposo, Josh, and Taka Tak were moving toward the concept of influencer-led live Commerce to boost revenue streams and the number of creators.

According to Charan, “the seamless integration of information and commerce will force brands to redefine how they interact with their audiences and spark the Indian digital social commerce boom.”

In September 2022, ShareChat entered into a partnership with B2B SaaS platform Dukaan to further its drive into live Commerce. It made it possible for the merchants on Dukaan to work with content producers on ShareChat and Moj to advertise their goods through live video and content.

In 2021, the company raised $913 million, which was the most money ever raised by a unicorn in a single year. Ankush Sachdeva, CEO of ShareChat, stated during a press conference in April 2022 that the firm had aimed for its artists to earn $450 Mn in revenue through virtual gifts, social/live Commerce, and ad revenues by 2025.

In 2022, with a valuation of more than $5 Billion, the company raised an additional $255 Million from new investors like Google, Temasek, and Times Group. Via its numerous solutions, ShareChat, Moj, and Taka Tak, which the business had previously purchased, planned to connect with a combined user base of 400 Mn in India.

For the fiscal year 2021–2022, the company reported a loss of INR 2,498.6 Cr, up 2.1X from INR 1,183.6 Cr in 2021. Its loss, including non-operating costs, was INR 2,988.6 Cr. The firm lost INR 1,460.9 Cr in FY21, not counting non-operating expenses.

Only a few weeks had passed since ShareChat shut down its fantasy game platform Jeet11, which resulted in the loss of 100 employees. Now it is scaling down activities for live Commerce. Even while live commerce is booming in places such as China, the business has not yet expanded to a level that is viable in countries such as the United States of America and India.

Facebook-owned Instagram has also decided to stop offering its live commerce feature, which allows users to tag their products during live broadcasts, as of March 16, 2023. The government is working on finalising a set of regulations that will be implemented nationwide to regulate live streaming and online purchasing.

editing and proofread by nikita sharma

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!

- Advertisment -

Most Popular

Recent Comments