Social commerce to hit $70-billion mark this decade, says study

Social media is expected to hit the $70-billion mark over the next 10 years.

Social commerce start-ups and new-age social media platforms such as Sharechat and TikTok, as well as social media giants such as Twitter, Snapchat, Facebook and Instagram, have seen a huge increase in their user base with the signing up of first-time internet users.

New concept

While e-commerce, too, has benefited from increasing internet penetration, social commerce has emerged as a relatively new concept, currently accounting for 15-20 per cent of the online retail market, according to a study by Wizikey.

Anshul Sushil, founder and CEO of Wizikey, a communication platform, said Indian consumers are used to various shopping experiences, “one of which is social and highly interactive shopping”. “Our study shows social commerce has emerged as a new category with different players coming into play with interesting trends. This industry has the potential to disrupt and is on track to be the next revolution in the online retail industry,” he added.

Even consumers living in tier-2 and -3 cities tend to shop through Facebook and WhatsApp, the report noted, with the majority of the population buying through networking sites.

China is one geography that has welcomed social commerce with open arms, the official added Sushil. “The way WeChat is being used to interact, explore, buy and sell is phenomenal. The industry is growing at almost twice the rate of the overall online retail industry,” he said.

Leveraging social behaviour

Akarsh Srivastava, Vice-President at SAIF Partners, said platforms such as Amazon and Flipkart have demonstrated that a large e-commerce business can be built in India. “However, these platforms and others, like BigBasket and Grofers, were built keeping in mind the earliest internet adopters. Most of these apps were started and scaled before the Jio phenomenon. Current online models rely on digital acquisition through Facebook and Google, and end up competing with other commerce services trying to target the same user with sops like discounts,” he added.

Social commerce aims to leverage the social behaviour of these users to facilitate transactions, he further said.

“The opportunity size can be gauged by the fact that WhatsApp has 400 million monthly active users, while the number of annual online shoppers is only about 100 million. Amazon and Flipkart have close to 80 million users though all of them are not necessarily transacting. A platform which bridges this divide can create a much larger business than any of the incumbents,” said Srivastava.