A quick quiz: Would you rather watch another ad for a new skincare formula or have your favourite celebrity invite you behind the scenes into their daily skincare routine, showing you how they use the branded product and why they love it?
If you prefer the second option you are part of a growing tribe of consumers who like to buy a product directly within their social platform, whether it’s on Instagram or through YouTube Shopping. Albeit small at the moment, this group of consumers with a predilection for social commerce is forcing marketers to rethink the way they target and engage consumer or the way they solicit feedback. In fact, social commerce has the potential to flip traditional transactional relationships between the buyer and the seller on their head.
According to a report by consumer intelligence firm Talkwalker, and consumer engagement service company Khoros, social commerce in India is expected to grow between 55% and 60% CAGR from FY20 to FY25, taking the current market size from $1.5-2 billion to $16-20 billion. This means that social media platforms such as Facebook and Instagram will play an increasingly important part in the entire shopping experience, right from product discovery to checkout.
As per Facebook’s reach data for ads, the user base has increased from 239 million in CY21 to 349 million users in CY23, observes Sudish Balan, chief creative officer and co-founder at Tonic Worldwide, noting that Facebook is just one of the many social media platforms to see a jump in active users. “One of the biggest factors driving ad spends is that intent is higher on social platforms than other digital mediums. It is also the single platform that goes from engagement to conversion, and can be fully tracked. Moreover, over 28% millennials claim that their purchase decisions are based on social endorsement. With the count of online shoppers in India crossing 250 million, brands have no other option but to deepen their ad spends on social commerce if they want to stay relevant,” asserts Balan.
Engagement is key
Take digital-first beauty brand, Plum which is dabbling with social commerce at the moment. The brand’s CMO, Shivani Behl points out that it has seen great traction from social media handles and marketplace-owned social communities, which offer a more direct discovery to purchase experience. Observing that shopping has always been a social experience, she notes, “With nearly 60% of the global population getting on to social media, it is rapidly becoming a search engine for beauty and personal care products. The biggest benefit of social commerce is getting real time consumer feedback, and the two way conversation mechanism that helps us improve our engagement with our audience.”
According to media agency Wavemaker, 70% of social commerce in India is brand led, which includes conversational commerce too. The social commerce canvas has expanded from being mostly dominated by ad formats on social networks that support sales, to other aspects such as live commerce, conversational commerce, influencer-driven commerce, and more.
Aside from established and large brands, social commerce is also evolving as a new communication channel and transaction model for small and midsized companies, explains Anshuman Misra, eMarket and strategic partnership expert, LS Digital. He says, “This model could empower up to 40 million businesses by offering a direct line of communication to customers and a niche market to retailers because of India’s large consumer base. With a combined reach of over 400 million users, social media platforms such as WhatsApp, Facebook and Instagram allow companies to tap into a wide potential customer base.” He offers an example of a small skincare brand, Everything Mom Made, which was launched on Instagram in 2020 by an entrepreneur in Jaipur, Ritu Bhansali. The company today has over 19,000 followers, and supplies bulk orders for weddings and corporates.
Shradha Agarwal, co-founder and CEO of Grapes, adds that technological integration such as AI-enabling chatbots and voice assistants are also enabling brands to predict consumer behaviour. This can help in optimising the user experience and thus drive impactful engagement with audiences. Further, the influencer-led approach that social media lends itself to quite well will also help brands cater to audiences in tier –III markets and beyond. While social commerce is largely being used by brands in categories like fashion, beauty, home décor, electronics and food, experts agree that ultimately the success of a company’s social commerce strategy will depend on its ability to effectively engage their target audience, category notwithstanding.
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