The rise of social sellers of BharatBy Radhika Sridharan and Kamayani Sadhwani

Through her smartphone’s chat app, Delhi home-maker Deepti receives images of the rack shelf of household supplies at her local kirana store. She messages back with the list of items she needs and pays for them through the UPI link; 30 minutes later, the items are delivered to her doorstep. In Maharashtra’s Navi Mumbai, cosmetics store owner Prashant D’Souza shares images of the latest herbal face creams on his customer’s messaging group and resolves all queries with regards to the safety and efficacy of the products. Within minutes, the orders are in and the payments are processed digitally. Welcome to the booming world of social commerce, where small businesses are using digital networking platforms and social media to promote and sell their goods and services with unprecedented success. The recent Bain-Sequoia report ‘Future of Commerce in India’ highlights that social commerce, a fast-growing subset of online commerce, has the potential to unlock opportunities for more than 40 million small businesses and sellers in the country, of which only 10–15 million are currently taking advantage of these channels.

The digital opportunity

Social commerce is primarily being driven by sellers and service providers who are making their first forays into the digital space. These small businesses, 85% of which are small retailers, are representative of the majority that neither have the scale to list products or services on major e-commerce platforms nor the ability to shell out huge commissions to them. However, they are able to recognise the vast potential in adopting more digital-focused approaches of doing business and the opportunity in seamlessly integrating into the digital lifestyles of consumers. They make the most of their existing store resources and inventory and majority leverage store employees and local courier services for delivery. Social commerce is effective for them to increase reach and drive incremental sales through these platforms at practically no additional cost. The majority of small business owners believe that social commerce has created 15%–20% incremental value for them as opposed to cannibalising their offline sales.

With Covid-19 further accelerating the shift to digital, several small businesses have adapted well to the new dynamic, and rather quickly—from listing their products on social platform marketplaces, giving video tours of their shops to closing transactions through messaging. Commerce has been happening in a way that is closest to digitally replicating the offline experience, creating a new method of experiential marketing.

The community multiplier

The efficacy of the social commerce structure has been further enhanced by networks of communities and their scaling effect. A single message by a small seller, shared by family members, groups of friends, and members of Resident Welfare Associations, can receive notable organic reach and create unforeseen prospects for new business. This trend has been bolstered by the ecosystem through digital solutions like WhatsApp Business, which already has over 15 million business users in India, as well as other start-ups in the commerce enablement space such as Bikayi, Digital Dukaan, OKShop, MyStore, etc. These platforms have helped streamline the selling process for small businesses and amplify it with the power of social networks.

The platforms have also enabled small businesses to quickly create catalogues that are socially shareable while allowing consumers to close transactions on the social platforms themselves. With expectations affected by personalised, curated, high-touch, and convenient conversations, some current consumer behaviours are predicted to continue even in the post-Covid-19 world.

A new era

Social commerce is quickly emerging as a key to turbocharging growth, and the need of the hour for businesses are formulating clear social commerce goals and developing the underlying strategy best suited for their business models. For instance, clarity on whether to have a “direct to consumer” or a “direct to influencer” business model will impact the choice of the social commerce archetype itself. Going forward, communities will be the pillars for success in social commerce. With around 75% of consumers on social platforms purchasing from people they know, building trust is integral. Business owners, especially hyperlocal ones, should engage community members as ambassadors to build trust and scale effectively via social channels.

The rules to win also vary by category. Consumer motivations and behaviours shift depending on the product or service; while clothing and footwear is a peer-influenced category with focus on variety and range, food and grocery is convenience based, driven by hyperlocal influence and the attractiveness of discounts. It will be critical for businesses to understand these nuances and develop a clear social commerce platform-level strategy for each category they sell while creating curated and personalised shopping experiences for consumers to ensure sustained success.

( The author of the article is leader at Bain India’s Customer Strategy & market practice and senior manager in Bain & Company , respectively)



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