Rajiv Kumar, 37 year old possesses iconic expertise in the field of Information Technology and Software Development. With vast experience and deep knowledge of handling Technical Architecture and Technical Design Projects, he has now started his own Operation of providing E-Commerce Solutions to the Small Medium Entrepreneurs and Individual Entrepreneurs.
Mr. Rajiv Kumar, a qualified Software Engineer, who has a 20+ years of experience, has offered his service to the Companies like Tata Infotech, ST Microelectronics, HCL Technologies, E-Trade Financial, Oracle, Waterfall Mobile, Tavant Technologies.
E-commerce is heavily interwoven into our lives. When Covid-19 broke out, several new & innovative business models emerged, out of which some failed while some succeeded in making their mark in consumers’ minds. The global pandemic expedited the growth of the Indian e-commerce industry, thus leading to a faster tech adoption. In order to meet the rising consumer demand, companies are adopting various technological solutions and new business models to offer a personalised and interactive shopping experience. One such promising model within the e-commerce domain is ‘Social Commerce’.
Social commerce was gaining tremendous traction even before the pandemic struck, but now it has become an essential part of mainstream e-commerce, making it accessible to every age-group and income-group across India. Social commerce is basically an amalgamation of the use of e-commerce and social media. Its growth is being driven by the vast social media user base in India and our rising appetite for e-commerce.
Social Commerce: The Best of Both Worlds
The term ‘Social Commerce’ is self-explanatory and denotes the coming together of highly engaging and massy social media with the proven model of traditional e-commerce. Buying and selling on social media isn’t a new concept but it wasn’t carried out in an organised manner in large volume. The Covid-19 pandemic acted as a catalyst to the entire process as overnight, people lost access to essentials. It was no longer safe to order from platforms while things on the pandemic front were still unfolding.
The wide use and sharing of videos on social media platforms like Facebook, Snapchat, Instagram etc. are leading to a monumental growth of social media, especially among Millennials. Some regional social networking platforms have also gained immense popularity, leveraging vernacular content to establish a strong foothold in their niche market. This has given a further boost to social commerce.
As per reports, India is the leading Asian market for social commerce and is expected to become a $100 billion-worth segment for e-commerce by 2025. The deep regional connect and role played by personal referrals has led to the success of social commerce in India. The MSMEs rose to the occasion and found a great opportunity to conduct business and cater to consumers via different platforms like WhatsApp, Facebook and Instagram.
Research has shown that nearly 40% sales took place over WhatsApp during the period of lockdown in India. In addition to the lockdown restrictions, what worked in favour of social commerce was that one could trust their neighbourhood retailers and rely on them for product delivery. Apart from being user-friendly and convenient, social commerce became a phenomenon that saw people spending increasing time online. Digitally connected Indians spend on an average three hours per day online, of which nearly two hours are consumed by watching videos, messaging, and social media surfing.
AI &Automation: Changing Business Models for Social Commerce Players
Globally, businesses are using artificial intelligence (AI) to generate more revenue and improve their productivity. From chatbots to Google’s home devices and Amazon’s Alexa – AI has ventured full-fledged into our lives. Moreover, social commerce players are experimenting with both reseller and marketplace models with the help of automation and AI. It would not be an overstretch to say that AI has enhanced the whole experience of buying and selling by adding that personal touch to the way we trade and shop.
Leading retail brands are also designing chatbots and leveraging AI technology to assist consumers shop directly from WhatsApp. From simple product searches to creating recommendation systems for customers, these AI-based tools help in achieving an elevated level of consumer satisfaction, thus generating more sales. Therefore, we see more social commerce players deploying AI to improve customer experience – whether it is via contextual messaging or conversational chatbots.
Causing Push vs. Pull
While e-commerce platforms are built to majorly cater to the population of metro cities, social commerce platforms are meant to attract people from smaller cities, towns and even villages. The applications are available in vernacular and regional languages with the interface kept simple for navigation.
People visit e-commerce platforms knowing in advance what they would like to purchase. They then search for a product, compare prices across different websites and eventually make their purchase. This marketing strategy is known as the ‘Pull Marketing’, where companies invest in pulling customers to their platform with the presumption that they will buy. Whereas, social commerce uses a push marketing strategy, in which the product is ‘pushed’ on people’s phones through social media so that it lands right in front of them when they are surfing. Thus, the customer acquisition cost is much less in social commerce platforms.
Purchasing on an e-commerce platform is a well-planned and thought-out decision, whereas on social marketing platforms customers buy impulsively. E-commerce platforms show thousands of search results in a product category but on social commerce, the one who knows what a certain customer’s choice is sends them a few personalised recommendations of a product basis their preferences.
Since social commerce is directed towards smaller cities & towns and aids offline businesses shift tothe online medium, the products on these platforms are quite often cheaper and non-branded. The popular categories of items that are available on these platforms include fashion and apparel, beauty and cosmetics, grooming products, FMCG goods, electronics, and daily essentials among other things.
Summing Up
Social commerce is successful because of its innate trust factor as people prefer to buy only from a known connection. Use of platforms like Facebook, Instagram and WhatsApp adds fuel to the whole process as majority consumers are already comfortable with them. Besides, they allow conversation in local and regional languages, use chat features prior to check-out and provide customers a video-based product experience.The e-commerce ecosystem is transforming and faster than ever but what will benefit the social commerce players is to acknowledge this change and be more adaptive and agile to leverage the opportunities it presents.