S-commerce or V-commerce, the future of online shopping, is a process buying and selling products or services directly on social media platforms.
Also read: What is social commerce
Indian social commerce has been witnessing phenomenal growth. It is currently valued at $1.5 to $2 billion (GMV). It is expected to touch $60 billion and more by 2030. It is an opportunity knocking on the doors of online sellers and brands. The globe's second largest-populated country, India, is not far behind in social commerce. E-commerce and social media are proving to be an interesting concoction for Indian brands.
In Dec 2020, Bain & Company released a report titled 'The Future of Commerce in India – the rise of social commerce.' Valued at that time, social commerce in India was between $1.5 to $2 billion GMV. The report mentioned that by 2025, the sector would grow to $16-20 billion. Further, by 2030, it should be touching between $60 and $70 billion, according to The Hindu Businessline.
Also read: Top 5 social E-commerce startups in India
Given that the social commerce sector is exhibiting tremendous growth potential, what factors are influencing the future of social commerce in India?
India's e-commerce growth has been impressively phenomenal. A smartphone with an active internet is what one needs to shop online. By 2021 end, according to Financial express, the Indian e-commerce industry is expected to touch $5trillion. No mean feat by any means! To top it, nearly 300-350 million online shoppers in the next five years. According to a Bain-Flipkart report, that is the expected increase to the customer base. Experts predict the GMV will increase to $100 billion by 2025. Social commerce makes e-commerce easily accessible and comprehensible for the common man. Buyers love social commerce because social media is a part of their daily lives. Sellers love it because of the lower acquisition costs and higher engagement levels. As internet penetration enhances, more online shoppers will get added. Thus, a growing preference to shop online invariably impacts the social commerce future in India.
We trust when our friends and family say something! Human beings are innately connected and, therefore, the faith in word-of-mouth. The modern generation heavily relies on the word of social media influencers. According to Economic times, The Indian social media influencer industry is currently valued at INR 900 crores. Another four years and the industry is set to grow by 25%. If stats are believed, the sector is looking at an astronomical INR 22,000 crore by 2025.
The eighteen months of the pandemic acted as the biggest thrust for the sector. The bond between influencers and the audience has grown dramatically during the last few months. And brands were quick to leverage the same. And hence, the demand for influencer marketing agencies went up and big brands started looking for best influencer marketing platform to strategize their campaigns and grow their business. Leading, of course, to a burgeoning social commerce market size in India.
From Facebook to Google to various venture capitalists, the sector has gained interest all around. Some of the top domestic social e-commerce platforms are attracting the right investors. Look at the examples. Meesho, India's most successful social e-commerce platform, raised $570 million last year. Investments have poured in from Facebook, SoftBank, Prosus Ventures, Shunwei Capital, and more. Meesho team has been in talks with Google, too, for investments.
Another social commerce platform, Coutloot, received about $8 million investment last year. The key stakeholders were venture capital firms like Ameba Capital, Astarc Ventures, Venture Catalysts, etc.This is the tip of the iceberg. There are more stories to tell. It all spells good for the Indian social e-commerce industry. There are a lot many social commerce trends in 2022 that will act as a big boost to the sector. Read more about the trends in our blog here.
While many Indian consumers are still wary of e-commerce, most of them typically trust social media platforms. It is because social media encourages connection and community feeling. While e-commerce is convenient, many customers in Tier 2 and 3 cities or rural areas have trust issues. They are concerned about digital confidentiality of information, resistance to change, deterring return policies, UI-related issues, distress about receiving defective products, and so on.
Social commerce, on the other hand, is engaging. There are human connections. That is why it is fun and intriguing. Most users are comfortable with social media apps. Thus, it becomes a hassle-free affair for all involved. To top it, social media platforms offer vernacular content that appeals to small-town and rural customers.
India's social commerce market size is in a good place at the moment. It is growing progressively too. Social e-commerce is beneficial for buyers and sellers; it is a happy zone. What do you think of the growth of this sector? Leave a comment to let us know.