The social commerce industry is changing the shopping habits of Indians and it is here to stay. It is said to be the next big thing in commerce and hence, you should know all about it. Here’s a detailed article on what it is and the future trends of the industry.
What Is Social Commerce Shopping?
Social commerce shopping is when a customer does their entire shopping on a social media platform, from looking at a variety of things to choosing their favorites and checking out, and finally making the payment.
It is the intersection of social media and e-commerce. e-Commerce was never completely independent of social media anyway. To drive sales, brands are using popular social media platforms like Instagram and Facebook to market their products and services.
Social commerce goes a step further and it allows them to sell directly on the platform, thus eliminating the need for the user to visit an e-commerce platform like Amazon separately.
It’s more convenient for both companies and customers, and hence the concept is gaining traction at a remarkable pace.
Social Commerce Users In India
The report by WATConsult shows that India currently has 157 million social commerce shoppers, which accounts for 53% of total shoppers. YouTube, Instagram, Facebook, and Whatsapp are the leading platforms in the social commerce industry.
Youngsters prefer Instagram whereas the older demographic prefers Whatsapp and Facebook.
On social media, they can compare a given product with the same product of other brands and shop at the best price. Also, they can check the reviews of other people in the comments section without visiting any other website. The CEO of Isobar India group, Heeru Dingra said, ”
Social media and e-commerce are paving strong inroads in the regular Indian Internet users’ daily routine. Since the shopping environment on social media has ripened, there is huge potential to drive sales through these platforms.”
Data suggests that most sales on social media are mobiles and tablets accessories, followed by fashion, beauty, grooming, and fitness products.
What’s The Future Gonna Be?
As per The Financial Express, the social commerce market will be a $100 billion opportunity by 2030, up from $2 billion in 2020. The projection may look steep to many but as the number of social media users grows, so will the sales on social media.
Another factor is that Tier-2 and Tier-3 cities of India are said to be the next major geographic which will drive the economic growth in the country. Brands are luring customers in these cities for their businesses and setting shops there.
80% of India’s smartphone users are from small cities and thus it makes sense that the growth of social commerce will be driven by these small cities and towns. By the end of 2022, India will have 228 million social commerce shoppers as per the projections, a 45% jump from the current levels.
Globally, the social commerce shopping industry will grow to $1.2 trillion by 2025, as per a report by Accenture. The report shows that the GenZ and millennials would account for 64% of the total social commerce users.
China had been the leading player in the industry for several years, but post the COVID-19 pandemic, the USA has seen a tremendous spike in users. A report by Statista shows that there has been over a 30% increase in social commerce shoppers from the 2019 levels.
There were 80 million shoppers in 2020, who spent a total of $27 billion approximately. In the USA, social commerce sales are expected to increase by 35%. The numbers are staggering low when compared to its economic rival China in the East. But overall, the market of social commerce will bloom globally for years to come.
Benefits To Sellers
While it has several obvious advantages for buyers (the primary being convenience), it has even more advantages for sellers. The first is that it allows companies to directly connect with the customers.
Social media is the fastest and cheapest way to grow your customer base and market your product/service. It helps create your brand presence. It made marketing easier and lucrative, but the eventual sales happened on a third platform. What’s the guarantee that the user would visit the platform even if they like the product?
If somehow the transaction could happen right then and there, then wouldn’t that ensure that the customer buys the product? So, the revenue of companies can increase through this.
Sales, advertising, influencer marketing, reviews – all are on a single platform, which helps sellers make better decisions. It is especially beneficial for small businesses as it cuts operational costs.
Choosing the right platform is very crucial for high sales. For a company that caters to youth, Instagram is the best platform. For companies catering to an older demographic (over 45 years of age), Facebook may be more appropriate.
TikTok is another emerging platform of social commerce shopping. It has an unprofessional feel so the sales experience feels more raw and trustworthy as if reviews are coming from friends rather than advertising by companies.
One of the biggest challenges remains the trust factor. Customers are not always sure if the refunds will be processed right. How the industry overcomes this major challenge will determine the future of the industry to a large extent.
Sahil Shah, the Managing Partner of WATConsult rightly says, “Shopping was, is, and will always be social. Platforms, behavior, and mediums will keep evolving while more and more people will go online to shop.”
He couldn’t be more accurate. The trends will keep on changing, as they have been since the dawn of time. Earlier, it used to be local markets, which then became malls. From malls, people shifted to online platforms and now to social media commerce. The next thing is going to be Metaverse which will enhance the shopping experience of users like never before.
Disclaimer: This article is fact-checked
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