Social commerce: The next revolution in retail

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Published: July 6, 2018 2:18:58 AM

Social commerce is helping small businesses to grow as they capture online shoppers.

e commerce, flipkartOnline marketplaces like Flipkart and Amazon already have a large and an active user base

A PwC study suggests that 850 million people will have access to mobile data by 2022; brands and consumers are likely to be connecting more frequently across this channel. This has also opened doors to a new way of selling — social commerce. Buyers and sellers connect directly with each other over the internet in community, interaction and communication-based ways for shopping. Many emerging brands and traders across India find it easier to engage in this method of e-commerce because setting up their own websites and driving traffic from various sources is a long-drawn out and complex process. It is substantially easier for them to just start selling through social media platforms like Facebook. They don’t have to worry then about getting traffic: Facebook has an active user base of 270 million in India — its biggest global market.

E-commerce platforms are failing small sellers

Online marketplaces like Flipkart and Amazon already have a large and an active user base, and have helped sellers reach their target audience in the past. However, as these platforms scale, some have looked to work with larger manufacturers and importers in an attempt to replace middlemen and corner a larger share of profits. Small sellers on these platforms are already ceding ground steadily to large manufacturers and distributors of branded goods.

These platforms also cater to a very different type of selling transaction. These platforms can’t cater to those just looking to browse or window shop and are unable to capture the impulse shopper.

Finding the impulse buyer

This is one of the reasons that social selling has been such a big draw for small sellers, especially in the lifestyle shopping area. Window shoppers are looking for a pair of shoes or a dress that will suddenly grab their attention. These consumers are willing to shop outside for a major brand, find and explore new trends. Social shopping fits into this paradigm much better than shopping through larger e-commerce platforms where you need to search for a brand or a particular product to find what you are looking for.

The other big draw for sellers looking to sell through social commerce is that rural and tier II consumers are yet to start shopping online in earnest. A research by Morgan Stanley suggests that there will be explosive growth in the e-commerce industry as rising internet penetration brings new consumers into the market, taking it to $200 billion by 2026. For these new consumers, social media will be the easiest and most data-friendly method to shop.

The concept of distributed commerce is taking hold across the world as the industry tries to put the consumer at the heart of the selling process. India’s relatively nascent e-commerce industry might leapfrog into social commerce; skipping website/shopping cart e-commerce, as has already happened in Southeast Asian markets.

However, to make the most of this opportunity, sellers will need help with the technical aspects of catalogue management and distribution across channels, as well as assistance in handling digital payments and shipping. With the right assistance, they will be extremely well placed to grow greatly through selling directly to their customers online on Facebook, Instagram and WhatsApp — capturing impulse shoppers, leaving

Flipkart and Amazon and their Walmart-esque model far behind.

Saahil Goel is CEO & founder, Kraftly

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