New retail rules: E-commerce shifting to interactive commerce

By: |
March 7, 2021 4:30 AM

Commerce and payment platforms are already introducing content in their quest for higher engagement.

A prominent example is Flipkart, analysts point out, which is launching ideas, videos and games.A prominent example is Flipkart, analysts point out, which is launching ideas, videos and games.

With deep-pocketed players betting big on e-commerce, the sector is bracing for more competition. A deluge of cheap smartphones is pushing more Indians to go online and the usual tactics of offering affordable deals, discounts and convenience of cash on delivery may not work anymore. The future of e-commerce needs to be ‘interactive’, say analysts at Zinnov.

To put it simply, companies will have to curate a blended model — embedding content to drive consumer engagement, allowing easy discoverability of products and supporting a network of influencers and community participation. If firms are able to play the cards right, they can grab a bigger share of the e-commerce market, estimated to touch a significant $200 billion by 2026.

India has an expected 500 million smartphone users but only about 12-15 million of them navigate traditional marketplace led e-commerce platforms like Flipkart and Amazon on a daily basis. Whereas, content-led platforms like Facebook and YouTube record a daily active user base of 135-175 million, shows a recent study by Zinnov. “In the coming days, we can expect to see interesting collaborations among players across content, payments and commerce to bring the interactive commerce model to life. No one player has all the required elements in place,” say analysts at the firm.

Commerce and payment platforms are already introducing content in their quest for higher engagement. A prominent example is Flipkart, analysts point out, which is launching ideas, videos and games. “Going forward, we expect major shifts in how content and commerce intertwine. Green shoots are already emerging. For instance, Facebook announced Facebook Shops, a feature for businesses to create their digital storefront,” they said.

Players will also have to focus on creating easy discoverability which has so far not been explored by the marketplace players. Consumer surveys indicate that discovery is increasingly taking over from search as the primary means for finding new brands and products. In fact, 38% of product discovery for mobile shopping happens without any premeditation or advertising influence, the study shows. “One of the most gratifying experiences of shopping is discovery — stumbling across something that consumers did not know they needed. Any platform that can solve this, will add massive value,” say analysts. Influencers have a pivotal role to translate a product discovery into final purchase, which is why getting them on board can be the gamechanger. Young consumers, especially, tend to buy products based on influencers’ recommendations.

China’s Pinduoduo has been able to defray craft an interactive commerce model. This has made it one of the fastest growing e-commerce startups in China, The company which is now the country’s second-largest e-commerce player hit a gross merchandise value (GMV) of $15 billion within two years of its launch. To put it to scale, Alibaba and JD.com took five year to reach that milestone.

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