- Social Commerce accounts for 15-20% of the online retail market and is expected to hit the $70 billion mark in the coming 10 years
- The industry is growing at almost twice the rate of the overall online retail industry
- Social media will act as a catalyst for the new billion-dollar market
India: Social commerce has been a hot topic in the media in 2019, with big names investing in social commerce startups and new-age social media platforms like Sharechat, TikTok and others showing interest in this sector. Wizikey, Asia’s first PR and communication platform has collated interesting trends across this industry and released a report on the top social commerce startups using its AI and ML-based technology. The top 5 newsmakers were identified in the category and analysed based on the volume of news made by each of them.
According to the report, while e-commerce too has benefited from the increasing internet penetration, social commerce emerged as a relatively new concept, it already accounts for 15-20% of the online retail market and is expected to hit the $70 billion mark in the coming 10 years. In India, most of the people living in Tier 2 and Tier 3 cities shop through Facebook and WhatsApp. While there is still some time before social commerce can make inroads into the metro cities, the majority of the population is already buying all sorts of products through networking sites. China is one geography that has welcomed social commerce with open arms. The way WeChat is being used to interact, explore, buy and sell, is phenomenal. The industry is growing at almost twice the rate of the overall online retail industry*.
E-commerce giants have seen the signs and are working towards a social commerce model. Amazon has already launched an affiliate program. It is safe to say that social media will act as a catalyst for the new billion-dollar market and social commerce is on track to be the next revolution in the online retail industry.
Anshul Sushil, Founder and CEO of Wizikey said, “Indian consumers are used to a various set of shopping experiences, one of which is social and highly interactive shopping; giving birth to Social commerce- a new billion-dollar market. We at Wizikey study different sectors and social commerce has emerged as a new category with different players coming into play with interesting news trends. This industry has the potential to disrupt and is on track to be the next revolution in the online retail industry.”
Akarsh Srivastava, Vice President at SAIF Partners shared his insights on the Social Commerce industry which is growing at a rapid pace in India. He added“Incumbent platforms like Amazon, Flipkart etc have demonstrated that a large e-commerce business can be built in India. However, these platforms (and others like Big Basket, Grofers etc) were built keeping in mind the earliest internet adopters. Most of these apps started and scaled before the Jio phenomenon. Current online models rely on digital acquisition through Facebook, Google and end up competing with other commerce services trying to target the same user with sops like discounts. Social commerce aims to leverage the social behaviour of these users to facilitate transactions.
He further added “The size of opportunity can be gauged by the fact that Whatsapp has 400 million monthly active users, while the number of annual online shoppers is only about 100 million. Amazon and Flipkart have close to 80 million users each opening their apps (all of them not necessarily transacting) monthly and annual GMVs of ~$10-12 Bn. A platform which bridges this divide can create a much larger business than any of the incumbents.”
Top Players in Social Commerce
In recent years the industry has seen an exponential increase in the number of players as well as the funding flowing into these companies. The top companies that have emerged as industry leaders in India are
Meesho, a four-year-old startup, can be regarded as the pioneer of social commerce in India. With a network of more than two million resellers, Meesho paved the way for other players to enter the market. Dealing largely in electronics, home products, and clothing, the platform helps customers in smaller cities connect with small businesses and entrepreneurs through platforms like Facebook, WhatsApp, and Instagram.
DealShare is another social commerce platform that operates on a slightly different model than other players like Meesho. The startup focuses on group buying for groceries and other home products in the lower and middle-income segments. DealShare received the maximum coverage in the media for their funding announcement.
Poshmark is a social commerce marketplace with a model that is quite different from others covered in the report. While Meesho and DealShare connect sellers and buyers through existing social networks like Facebook and WhatsApp, Poshmark has created its own networking platform where sellers can share their products with their followers and sell from the Poshmark app itself.
Mall91, like Poshmark, has its own platform which integrates various features such as video chat, messenger and social shopping into one single app. Mall91 also operates in vernacular languages to ensure a more widespread inclusion of non-metro city users.
GlowRoad is a women-focused reselling platform that enables its users to create their own networks and buy and sell through them. The startup mainly services housewives, enabling them to sell products from the comfort of their homes through offline and online modes.
WMall is a women-focused social community-based e-commerce platform that targets new-to-internet women users. It allows users to create and upload video content to help others in making better buying decisions and build trust with sellers on the platform.