The covid-19 pandemic came as a ‘bolt from the blue’ for all types of industries. Some saw a surge in the business activities while some businesses’ activities came tumbling down. The real question for us, then, becomes what happened to the social commerce sector in India when the whole world was facing such an emergency sort of an issue?
The major chunk of the e-commerce sector consumers come from Tier III and IV cities. On an average, these people spend 2-3 hours a day on social media scrolling through their feeds or simply just texting on apps such as Instagram, Whatsapp, The resellers and the micro entrepreneurs target their activities within their social networking to enhance online shopping.
WHAT DO WE UNDERSTAND BY SOCIAL COMMERCE?
We have heard about commerce, E-commerce, etc. now what in the world is social commerce? – a question that must be in a lot of people’s minds. Well, to answer that in easy words- using social media to sell and buy products is nothing but social commerce.
Rise of social media and the user base that it carries has allowed a lot of businesses to beat their competitors by just being available online. The social media has become a centre point for all types of communication and brand advocacy. Social media, over time and again, has helped the businesses grow by targeting the right audience for their brand and services. Social commerce helps in promoting products and services through social networking sites and applications such as whatsapp, facebook, instagram, etc. The main tactics that social commerce professionals use in order to increase sales and profit is that they create and post creative and interactive messages that the users not only sees on his feed but somehow gets compelled to engage with it. The social commerce employs do activities such as- they invite users to vote for a particular product, offer personalized buying options, put in aesthetically pleasing and colorful graphics so as to attract customers, create videos of products from multiple angles to give in a better idea of the product to the customers, give in an option of comments and feedbacks which help them interact with the customers and know their preferences, use celebrities to market their product, provide easy access to the shopping cart, offer giveaways and promotions to existing customers who share their products on their feed and there is also something called as forums and communities where people discuss their shopping experiences.
HOW DID IT ALL BEGIN?
The concept first appeared in November, 2005 on yahoo. The site used to promote “Shoposphere pick lists,” which used to highlight the most popular products. The concept expanded when the sites started offering online expert opinion on products. A prime example of company that uses social commerce is Coca-Cola which had personalized labels on its bottles and they asked their users to share a picture of their name-branded drink with the hashtag #ShareaCoke.
HOW IS SOCIAL SHOPPING DIFFERENT FROM SOCIAL COMMERCE?
No matter how similar these two terms may sound, they are quite different from each other as they use different principles to operate on. Social shopping is a collaboration of online shoppers networking together whereas social commerce collaborates with online vendors. Social commerce allows you to purchase your desired product at the same social media that you are using at that moment without redirecting it to other online shop or webstore.
THE FUTURE OF SOCIAL COMMERCE IN INDIA
The future of social commerce in India is not so clear, although we can still attempt to say that it might see a huge growth in the upcoming years considering the current situation when the whole world is relying on social media, whether it is for news, entertainment or just plain knowledge. The categories that have been dominating this sector are fashion and daily household needs like food, personal care, grocery, etc.
The average amount spent by a customer from Tier III and IV city with a household income of Rs 25-30K per month on household needs is Rs 5000 whereas the amount spent on apparels and fashion
is Rs 500. The market size of household needs is of about $650 billion worldwide, whereas the market size of fashion is of about $80 billion, which is literally 8 times of the household market. So the ‘pot of glory’ becomes the household sector. There needs to be a creative platform that invites a number of entrepreneurs to come together and bring in a sort of transformation that involves online social networks. This will help in building a network for sustainable business model that will eventually help in reducing the cost of supply chain and control Customer acquisition cost (CAC).
GLOBAL OUTLOOK OF SOCIAL COMMERCE
The social commerce market in China consists of about $250 billion which is nearly 12% of retail market, their largest chunk is currently focusing on the household needs category. According to GLOBE NEWSWIRE- by 2026, the global social commerce market is predicted to reach $1948.5 billion by 2026, rising at a market growth of 29.4% Compound annual growth rate (CAGR).