One trend that has recently shaken the online shopping scene is Social Commerce. So, let’s get straight to the point. What is Social Commerce?
In simple terms, social commerce is the procedure of selling products on social media platforms like WhatsApp, Instagram, Twitter or Facebook. Businesses whether small or large scale are using social media platforms to sell their services and products to audiences. The growing number of reselling groups on Instagram or WhatsApp is proof of how online shopping and online socializing are such a perfect combination. As per experts, the pandemic has resulted in the fast growth of social commerce.Â
It provides different features when compared to traditional ecommerce by including shopping in daily life through connection and community. It is revolutionizing the shopping experience, opening new opportunities for audiences to be a part of the global economy as influencers, creators, consumers and sellers. This has to lead to a power shift from large to small. This creates an impact on every business, retailer and brand, no one can ignore it.
Social commerce players and ecosystem
Social commerce has 3 principal ways of engaging consumers via influencers, individuals or brands.
- Content-driven: Social media posts about content related to new products and services leads to discovery, engagement and action.
- Experience-driven: There are experience-driven channels like Livestream, AR/VR which lets you visit virtual shops.
- Network-driven:Â Existing social networks like Meesho and Alibaba makes selling and buy possible.
Any brand small or large can sell through this, and any individual can create or become a brand and sell in the market directly. It has hugely affected as they can reach out to potential markets. Instead of big brands and retailers, millions of businesses are selling to one another through the social commerce ecosystem.
What are the key benefits for brands, platforms and customers?
Platforms: For platforms, it has opened up a new form of revenue as the growth of digital advertising is going to slow down.
Retailers: Retailers can now create new shopping experiences, engage creators/ influencers, connect and create a network of consumers in new ways. Customer acquisition cost is not a big struggle now as Social commerce is a cost-effective alternative.
Brands: Big brands need to embrace the change from large to small, thus helping small businesses to grow. They can engage directly with customers and enhance user experience with social media platforms.
Customers: Considerable value is added to the whole user experience for the customers. Here are a few benefits:-
- Familiarity – Entire shopping can be done without leaving the familiar social platform. Itâ€™s like traditional shopping as they can bargain, ask queries, give feedback etc.
- Trust – Customer knows whom to contact in case of any issue.
- Personalization – Unlike ecommerce where a huge amount of choices is available, resellers will give you choices as per your size and taste.
- Better price – Due to no overhead cost, resellers can offer better prices to the customer.
How is social commerce growing globally and in India?
In the year 2021, retail social commerce sales reached up to $351.65 billion in China. Indiaâ€™s social commerce market is expected to reach up to US$ 50 billion by 2025. 30% of companies are already on social media and 12% plan on moving to social media by 2021. In the year 2025, social commerce will grow up to $80 billion in the U.S.
Globally, social commerce sales will reach a height of $492 billion. China will be the most advanced market in terms of maturity and size, but the highest growth will be observed in countries like Brazil and India. The latest business models are designed to enhance participation in digital commerce all across the world. India will have almost 228 million social commerce customers by 2022 which will be a 45% increase in the current number of users. But this will just be the start and things will keep on getting better and better!
Â Importance of social commerce today
Around 3.5 billion people use social media. Consumers are spending almost 2.5 hours daily on social media. Now commerce is there too. It would soon become so powerful that it would threaten the existence of ecommerce. People want to buy services and products based on inspiration and references from the community they trust.
They want to feel informed and confident in what they buy. Social media serves these needs, providing enhanced experience with personalization leading to discovery and authenticity. So, as a business, itâ€™s high time you invest in social commerce and increase sales and connect directly with customers!