Social Commerce To Drive Innovations In E-comm

Sachin Kumar Jan 02, 2021

Social commerce is fast becoming a key contributor to the growth of e-commerce in India and is helping brands convert engagement into sales. Till some time back, Google search and then market places were the major growth drivers for e-commerce. However, in the COVID scenario, social media platforms are also picking up pace. A recent survey by PayPal revealed that India is already the leading Asian market for social commerce and is projected to become a $100 billion vertical of e-commerce by 2025.

While social commerce portals like Meesho and Bulbul provide dedicated platforms for social commerce-based businesses, prevailing social media platforms like Instagram also enjoy a massive presence. Social commerce has especially been a boon for start-ups and smaller, independent businesses to market and sell products & services. From now popular brands like Blue Tokai Coffee, Simba Beer and Moonshine Meadery to smaller entities like the health & nutrition company Food Darzee and various fashion and thrift brands – Several brands are going the social route.

What are the factors that are propelling its growth in India? In my view, there are two major ones:

Consumer sentiments can be understood well on social media - Social media platforms were increasingly being used to drive more conversations with consumers. It provided marketeers with relevant insights in terms of consumer content preferences, across different geographies and demographics. Brands have now started realising that these insights, combined with the right data can actually help them in reaching the right segment of the audience with the appropriate messages, thereby providing a boost to click-through rates with a further call to action. A well-defined, holistic social strategy can now address the data versus creativity conundrum that has always been a key aspect of social media and help brands find the right balance between brand and performance marketing.

Growth in the mobile internet ecosystem and increased time spent by consumers - The smartphone penetration in the country was growing at a fast pace even before the pandemic. The pandemic has further given an impetus to this growth with the spike in the online activity of consumers, especially on social media platforms. As per early research reports, within two weeks of the lockdown, time spent on social media had seen a spike of 87%. The growth continued even post lockdown, where brands have now started not only engaging but also driving performance through social media. The growth has been seen across platforms like Facebook, Instagram and Snapchat (for Gen Z), and also across regional platforms like share chat. As of November 2020, ShareChat had registered a 166% surge in growth – from 60 million monthly active users in the middle of the pandemic to 160 million monthly active users in just a matter of months.

A recent McKinsey report also indicates that India and China have been amongst the few markets where spending has continued to rise in the last few months. In the case of India, this can be attributed to the festive season, growth that bodes well for social commerce and e-commerce as a whole.

If we are to take back lessons from trends shaping other South Asian markets, social commerce will not only drive e-commerce but also give rise to innovations in this space. For example:

a) The rise of conversational commerce - Brands have seen the power of conversations in the social media space. Going forward, we are likely to see these conversations being guided by AI assistants or chatbots. They will be integrated into social media platforms to drive better conversations with a higher possibility of optimizing these for sales.

b) New iterations of social commerce - As per a WARC report, in South Asian markets consumers are starting to purchase more regularly from live streams and short-form videos. In Vietnam, which is considered to be a young, mobile-first country with high smartphone penetration, mobile-designed Facebook video ads have proven to be very impactful in driving conversions. Humour, picture contests and family values are especially appreciated. Sooner or later these trends are also likely to pick up the pace in India and neighbouring countries (In India, specifically, we are already witnessing this to an extent).

What should brands do to stay relevant and leverage this growth?

Brands should focus on delivering better social commerce experiences especially on mobile-led platforms. In India, regional platforms are also going to be significant. Further, in the constantly evolving Internet space, continuous testing and measurement of the effectiveness of campaigns and making changes to stay more relevant to consumers is very important. Additionally, the impact has to be seen from a long-term perspective rather than just the short-term. Most marketers are focused on short term metrics and start measuring the impact of a campaign in just a month’s time. In chasing ROI for every penny spent, the importance of long-term impact should not be compromised and metrics should be set for both short and long term.