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

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. Social commerce refers to the use of social media platforms to facilitate online transactions between businesses and consumers. This innovative approach combines the power of social media with the convenience of online shopping, creating a new way for businesses to reach customers and increase sales. In this story, we will explore 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.

As more and more consumers turn to social media for product recommendations, reviews, and shopping inspiration, businesses are recognising the potential of social commerce to drive sales and engage with customers in new ways. The ability to seamlessly integrate shopping into the social media experience is a game changer, and it has the potential to reshape the way we think about e-commerce.

That being said, it is important to note that social commerce is not a silver bullet solution. It still has its challenges, such as managing customer expectations, building trust, and ensuring a seamless customer experience. However, with the right approach, social commerce can be a powerful tool for businesses to reach new customers, increase sales, and build stronger relationships with their audience. So, while it may not be the only future of e-commerce, it is certainly an important part of it.

Future is bright

Is social commerce the future of online commerce? “Absolutely,” says Christoph Jourdan, VP Solutions Consulting, APAC, Sprinklr. According to him, the pandemic and recent hype around ChatGPT accelerated a craving for personalised, conversational purchase experiences. “Conversational commerce is a subset of social commerce, and a great example for how brands leverage AI to make their online experience more human. Messaging apps like WhatsApp incorporate product listing, check-out, and payment features while e-commerce platforms introduce AI-empowered chatbot functionality on their online stores to assist the sale,” he adds.

Social commerce in India is expected to continue to grow and evolve rapidly over the next five years, driven by technological advancements, changing consumer preferences, and the increasing importance of social media in commerce, says Keerthi R Kumar, Business Head-South, FoxyMoron.

According to Kumar, some key factors are:

• Increased adoption of social commerce platforms: As more Indian consumers gain confidence in online shopping, social commerce platforms are likely to gain traction. Furthermore, social commerce platforms are expected to use AI and machine learning to provide personalised recommendations and a more seamless shopping experience.
• Increased social media integration: Social media platforms such as Facebook, Instagram, and WhatsApp are expected to play an increasingly important role in social commerce in India. Social commerce platforms will most likely integrate more closely with these platforms in order to provide seamless shopping experiences and better consumer targeting.
• Expansion into Tier 2 and Tier 3 cities: As e-commerce grows in India, social commerce platforms are likely to expand their reach into Tier 2 and Tier 3 cities, where there is significant growth potential. To accomplish this, social commerce platforms must focus on establishing trust and providing convenient payment and delivery options.

“India is a fertile market for social commerce with great potential,” maintains Kumar.

Interestingly, Christoph Jourdan says, India has a significant user population that is still buying in stores. “However, while offline retail continues to be popular, e-commerce/ online retail has been growing, especially since 2020. This is both a challenge and a huge potential. The ability to ask questions and get quick answers at any point along the purchase funnel is a scalable and efficient way to unlock the full buying power of India’s Internet population. Social commerce will help buyers who are used to in-store shopping recreate the experience of buying a product in a physical store where customers can interact with the store staff,” he notes.

According to Dharmender Khanna, Country Head - D2C India, AnyMind Group, some of the most successful social commerce models in India are Meesho and Sim Sim. TikTok was the market leader in this, and it continues to be so to date, but its ban in India gives Instagram and Youtube an open market, he adds.

In recent years, adds Keerthi R Kumar, India has seen a surge in social commerce, with several successful models emerging in the market. One of India’s most successful social commerce models includes Meesho, a reselling platform that allows people to start their own online businesses by selling products to their social media contacts. Kumar points out, “Meesho has been successful in India because of its user-friendly platform and the ability to reach a larger audience through social media. The platform has also added new payment and shipping options, making it easier for resellers to conduct transactions. Lesson learned: Simplify the process for sellers and buyers, and effectively use social media to reach potential customers.”

He further notes that the rise of e-commerce giants like Amazon and Flipkart has created a highly competitive market in India; but social commerce platforms have been able to differentiate themselves by offering a personalised shopping experience and leveraging the power of social media and influencer marketing.

“The competition is heating up, and e-commerce behemoths are increasingly interested in entering the social commerce space. Amazon, for example, has launched a programme called ‘Local Shops on Amazon’, which allows small retailers and local businesses to sell their goods on the Amazon platform. Flipkart has also launched a programme, called ‘Flipkart Samarth’, which aims to give sellers from underrepresented communities the opportunity to sell their products on the Flipkart platform,” Kumar points out.

In recent years, he adds, Indian consumers have shown a growing interest in social commerce, with many preferring to purchase products through social media platforms. With the rise of social media platforms such as Instagram, Facebook, and WhatsApp, consumers can now discover new products and make purchases without leaving their social media.

Dharmender Khanna lists the following factors that will contribute to the growth of social commerce in India:

1. Growing market: India has a large and growing market for social commerce due to the increasing adoption of social media and e-commerce in the country. According to a report by BCG and Facebook, India’s social commerce market is expected to grow to $70 billion by 2030.
2. Young and digitally-savvy population: India has a young and digitally-savvy population, with a majority of internet users falling in the age group of 18-35 years. This demographic is more likely to use social media for product discovery and shopping, making social commerce a lucrative channel for businesses.
3. Rise of D2C brands: Direct-to-consumer (D2C) brands are on the rise in India, with many leveraging social media to reach their target audience. Social commerce provides these brands with an opportunity to sell directly to customers, bypassing traditional retail channels.
4. Increasing use of social media for shopping: Social media platforms such as Instagram, Facebook, and WhatsApp are increasingly being used by Indian consumers for product discovery and shopping. These platforms are also introducing features such as shoppable posts, checkout options, and chatbots to make the shopping experience seamless.
5. Integration with payment gateways: Social commerce in India is being supported by the integration of payment gateways such as Paytm, PhonePe, and Google Pay, making it easier for consumers to make transactions on social media platforms.
6. Influencer marketing: Influencer marketing is becoming a popular strategy for social commerce in India, with many brands partnering with social media influencers to promote their products and reach a wider audience.

“Millions of active users are engaging with content, and influencer marketing has become a crucial strategy for companies to grow. It’s now being used as a top-of-funnel marketing approach, with social commerce expected to evolve as a result of these trends. While influencer marketing was previously focused on increasing brand awareness, it is now shifting towards driving more conversions, purchases, and loyalty. These trends are constantly evolving and favouring social commerce, which has been seen in both the American and Chinese economies,” notes Ramya Ramachandran, Founder-CEO, Whoppl.

According to Ramachandran, the world of social media platforms and influencers is constantly changing. Some days, videos perform better, while other days, platforms are testing new algorithms. As marketers, it is difficult to predict what will work best at any given time, she says, adding, “The power of social commerce is selling your products on social media channels, while the consumers are scrolling through. A brand can adapt to multiple ways of selling: through influencer marketing, social media ads, content marketing, UGC, live streaming and native shopping features.”

Meta group’s social media platforms, such as Instagram and WhatsApp, have made commerce effortless, points out Ramachandran. “Customers can now shop from anywhere in the world with just one click, thanks to the platforms’ user-friendly payment gateways. WhatsApp even has integrated payment options, making the purchasing process even more seamless. Additionally, the rise of video commerce, where customers can shop while watching product videos, has made the shopping experience more enjoyable. This trend, which has gained popularity in the West, is now becoming more prevalent in India,” points out Ramachandran.

(Tomorrow: 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.)