Unleashing power of social commerce Part 2: Addressing trust & security concerns

As technology continues to evolve and consumer behaviour shifts towards online shopping, social commerce is becoming an increasingly important aspect of the e-commerce landscape.

In Part 1 of this indepth report, Adgully explored the growth and potential of social commerce in the B2B sector and how businesses can leverage this trend to drive their own growth and success.

Also read:

Unleashing the power of social commerce Part 1: Driving growth and success

Part 2 of this report will cover aspects such as the entry of e-commerce players, the challenges, the growing importance of Conversational commerce, preferences and behaviour patterns of Indian consumers, and more.

The entry of e-commerce player

Dharmender Khanna, Country Head - D2C India, AnyMind Group, notes that the dominance of e-commerce giants like Amazon and Flipkart has made it challenging for social commerce platforms to compete. According to him, e-commerce giants have massive resources and have developed sophisticated logistics networks and supply chains, making it easier for them to offer a wide range of products at competitive prices.

Moreover, he adds, e-commerce giants have invested heavily in building their own platforms, which offer a seamless and intuitive user experience, making it easier for customers to find and purchase products. “In contrast, social commerce platforms often rely on third-party payment and delivery systems, which can lead to delays and other issues. Despite these challenges, social commerce platforms in India have shown tremendous growth potential, primarily due to the massive user base of social media platforms. Social commerce platforms have been successful in leveraging the social networks of users to promote their products, leading to increased sales,” he adds.

Along similar lines, Ramya Ramachandran, Founder-CEO, Whoppl, too, says that the emergence of e-commerce giants has led to intense competition in terms of quality, delivery speed, ease of purchase, and customer experience. “To keep up with these giants, additional features like one-day delivery, doorstep delivery, and quick commerce have become the need of the hour. The social commerce space is constantly evolving, and there is ample scope for growth. We are witnessing changes in consumer behaviour, and the space is expected to expand further as more players enter the market, making it more consumer-friendly and consumer-focused,” she adds.

According to Ramachandran, Indian consumers show a greater inclination towards purchasing products in categories such as fashion, beauty, lifestyle, skincare, and hair care through social media platforms, leading to faster conversions. “Affordable products also see higher conversion rates. Brands that create awareness about their product range, offers, exclusivity, and influencer marketing witness a positive impact on their conversion rates. The trend is expected to continue as more brands tap into the potential of social commerce and leverage social media platforms to reach their target audience,” she adds.

The challenges

What are some of the challenges and barriers to adoption of social commerce in India and how can these be addressed?

According to Keerthi R Kumar, Business Head - South, FoxyMoron, the challenges are:

Low digital literacy: Despite increasing smartphone and Internet penetration in India, many consumers still lack the digital literacy required to engage in social commerce. This can make it difficult for social commerce platforms to acquire new users.
Concerns about trust and security: Consumers in India are often hesitant to share personal information and make online payments, especially when dealing with new or lesser-known social commerce platforms. This can lead to a trust deficit, stifling the growth of social commerce.
Supply chain fragmentation: India’s supply chain is frequently fragmented, with many small businesses operating on a local level. This can make sourcing products and ensuring quality difficult for social commerce platforms.

Kumar further says that these challenges can be addressed by the following steps:

Investing in digital literacy: Social commerce platforms can help consumers develop digital literacy by providing education and training on how to use their platforms.
Building trust and security: Social commerce platforms can increase trust and security by implementing strict data privacy policies, utilising secure payment gateways, and collaborating with reputable logistics companies.
Engaging with local businesses: Social commerce platforms can work with local businesses to source products and ensure quality, all while supporting the growth of small businesses.

For AnyMind Group’s Khanna, the biggest challenges are trust and security, which keep away a large part of the Internet population in India from transacting online.

The government is working on solving this issue with strict regulations and education on online fraud. Another challenge is language; a higher percentage of social and commerce in India operates in English and the number of English-speaking consumers in the country is relatively low. Although progress has been made, there is still a long way to go, and businesses must address this issue more aggressively,” he says.

Conversational commerce

Conversational commerce is a crucial component in social commerce. Companies need to adopt certain strategies and capabilities to win with conversational commerce.

According to Christoph Jourdan, VP - Solutions Consulting, APAC, Sprinklr, companies should adapt the style of conversational commerce to match their brand category and price level. He adds, “Conversational commerce managed by a real human being improves conversion rates, but only becomes profitable at large transaction sizes. For lower price points, an implementation focused on chatbots with human escalation paths is more cost-effective. Once the automated chatbot experience is built, deploy it across all relevant channels like messaging apps and live chat. Lastly, continuously learn from the conversations to further improve conversation rates for both the chatbot and human to agent experience.”

As for how businesses can develop conversational AI capabilities to succeed with social commerce, Jourdan has some tips for the industry. According to him, brands need a platform to easily discover, build, test, deploy and measure conversational AI models across all relevant channels. “Effective conversational AI requires periodic inspection by humans to ensure quality, both before and after they go live. By running test projects to optimize each bot’s ability to accurately interpret and respond to identified customer intents the success metrics increase immensely. For example, L’Oreal is using Sprinklr’s AI-driven chatbot support to answer every engageable customer question and optimise their engagement rate across digital channels,” he explains.

Jourdan further says that Sprinklr’s unified customer experience management (Unified-CXM) platform combines omnichannel coverage with advanced AI capabilities to help brands tailor customer experiences at scale. “With personalised experiences consumers are 80% more likely to convert, and it is equally important to connect and enable all customer-facing teams to act in sync. If the customer service department doesn’t have access to the same customer experience data as the sales team, a brand is not able to elevate the customer experience across the entire customer life cycle because customer-facing teams act in silos,” he explains.

When asked how brands can integrate conversational commerce in their CX strategy, Jourdan has some advice for brands in this regard. “Take an honest look at the experience you’re currently delivering to your customer base, says. Is it consistent across all channels and interactions? A poor experience indicates to your customers that you’re more interested in a transaction than a relationship. It’s the fastest way to alienate the audience you’re trying to reach. If you are mainly looking to boost your conversational commerce strategy, fielding queries effectively, relieving agents, and achieving high levels of automated support needs to be an immediate priority,” he adds.

Social media platforms in India, including Instagram and WhatsApp, are leveraging social commerce to enhance their user engagement and monetisation strategies, says Keerthi R Kumar. Following are some ways in which they are doing so:

Instagram:

Shopping feature: Insta has launched a number of shopping features, including the ability to tag products in posts and stories, a dedicated shopping tab, and Instagram Checkout, which allows users to complete purchases without leaving the app.
Influencer marketing: Instagram has become a popular platform for influencer marketing, with many brands collaborating with popular influencers to promote their products and drive sales.
Reels: Instagram’s Reels feature allows users to create short videos with shoppable products, giving brands a new way to engage with users and drive sales.

WhatsApp:

WhatsApp Business: WhatsApp Business is a free app that allows businesses to interact with customers through the messaging platform. It includes features such as automated messages, quick replies, and catalogues of products.
WhatsApp Payments: WhatsApp has launched a payments feature in India that allows users to send and receive money through the app. This provides a convenient way for users to complete transactions and for businesses to monetize their presence on the platform.

According to Dharmender Khanna, the following are the preferences and behaviour patterns of Indian consumers when it comes to buying products through social media platforms:

Trust is essential: Indian consumers are cautious when it comes to buying products through social media platforms. They prefer to purchase from sellers who have a strong social media presence, positive reviews, and good ratings.
Convenience is a key driver: Indian consumers appreciate the convenience of social commerce. They can browse products, compare prices, and make purchases without leaving their social media apps.
Recommendations and referrals matter: Indian consumers value recommendations from friends and family. They rely heavily on referrals and recommendations from their social media networks before making a purchase.
Authenticity is crucial: Indian consumers are skeptical of fake or counterfeit products. They prefer to buy products that are authentic and from verified sellers.
Price is still a deciding factor: Despite the convenience and social aspect of social commerce, price still plays a significant role in purchasing decisions for Indian consumers. They look for deals, discounts, and competitive pricing.
Mobile-first approach: Indian consumers prefer to use mobile devices for their online shopping, including social commerce. Social commerce platforms need to provide mobile-friendly interfaces and easy-to-use payment systems to cater to this trend.
Engagement and customer service are important: Indian consumers appreciate personalized engagement and customer service. They expect prompt responses to queries and complaints and are more likely to return to a platform that offers excellent customer service.