Driven by cheap data, supply-side innovations and digitally savvy customers, e-commerce has emerged as a $30 billion gross merchandise value (GMV) industry in India.
Bain & Company in its report, The Future of Commerce in India, highlights that social commerce is democratizing India’s e-commerce sector, which has been dominated by a few large players, paving the way for a more distributed model that’s built on community, connection and trust. While traditional e-commerce will continue to grow, it said social-led models will help redefine the landscape over the next five to 10 years.
The report notes that social commerce, which is a $1.5 billion to $2 billion GMV market today, will be worth $16 billion to $20 billion in next five years, and will likely hit $60 billion to $70 billion by 2030. This means that India’s social commerce sector will be two times the size of the current e-commerce market within 10 years. Social commerce has the ability to empower more than 40 million small entrepreneurs across India. Today, 85 per cent of sellers using social commerce are small, offline-oriented retailers who have found that social channels opens new avenues for growth. A subset of resellers are often first-time entrepreneurs earning Rs 5,000 to 10,000 a month and leveraging the power of their existing social networks to sell to their friends and family. This stands in sharp contrast to the larger, organized seller-base on e-commerce platforms.
The ability to share multiple product images easily helps sellers make a compelling case, while the wide georgraphic reach of underlying social platforms enables them to connect with buyers who might not otherwise have discovered their store. For most of these sellers, the report observes that social commerce represents the ability to create incremental value over and above their existing business. Majority believe that they will continue to try to grow their customer interactions and business through these channels. However, because the process of initiating contact with the customer, negotiating and then closing a sale often spans multiple platforms, a more streamlined order-management process and customer analytics are the biggest asks from sellers.