Eyeing non-metros, first-time patrons, e-tailers foray into social commerce

The social commerce mannequin — pioneered by Facebook-backed unicorn Meesho and which basically connects patrons and resellers — is seeing a surge within the variety of non-traditional e-commerce corporations mushrooming throughout the nation. These embody Dealshare, Mall91, SimSim (which was acquired by Google’s video streaming platform YouTube), amongst others. The largest typical identify to enter the area occurred in July final yr when Flipkart launched its Shopsy app, with a listing of 15 crore merchandise throughout classes similar to vogue, magnificence, mobiles, electronics and residential.
Products listed on these platforms sometimes embody unbranded or lesser-known manufacturers which are purchased by resellers from these marketplaces to get bought on their social channels to particular person clients. The basic differentiator of buying energy between the city on-line purchaser stationed in metro and tier-I cities, and the decrease ticket dimension producing purchaser within the rural and tier-II+ cities is what’s driving e-commerce corporations to jostle within the social commerce jungle to deepen penetration in non-metro segments. However, retail sector specialists imagine {that a} replication of the Chinese success within the social commerce area might rely upon India’s potential to help this enterprise with manufacturing capabilities.
Among the worldwide names to enter the area, Singapore-based shopper web firm Sea Group’s e-commerce platform Shopee has stormed into the phase. Having launched solely in November 2021, the app has turn into the second most downloaded free app on Android platforms in December and January, in accordance with SensorTower knowledge.The small-town placement of those social commerce apps, by way of which they’re basically seeking to goal first-time on-line patrons, has been witnessed within the numbers recorded. Meesho, for instance, in 2021 noticed that 71% of all new customers got here from Tier 3+ areas like Malkangiri in Odisha, Baikunthpur in Chhattisgarh, Munnar in Kerala, Mankachar in Assam, Khalari in Jharkhand, Lalganj in Uttar Pradesh and Mahua in Bihar.

“There have been some models in China relying on social commerce that have been very successful. People use social media channels to aggregate demand. Theoretically, in this model, you only manufacture or source after you have aggregated a minimum quantum of demand. Pinduoduo has been very successful in China in this model. Within India, what we’ve seen is the model being copied with a distinction from China that the purchasing power there is significantly higher than India, and secondly the supply chain and penetration of e-commerce in China is much better,” Arvind Singhal, chairman and MD of retail advisory agency Technopak informed The Indian Express.
“In India, even when you go to the middle-income group the purchasing power significantly falls. The discretionary spending power even more so. Many of these startups have the wrong idea about the addressable demand in India and the challenges in aggregating demand and delivering the products. Furthermore, Chinese supply chains are very efficient — a benefit that a company like Pinduoduo derives,” he added.
While the market break up of on-line shopping for remains to be closely in favour of conventional e-commerce corporations, in comparison with social commerce platforms, majority of the expansion, even globally, is being tapped by the social commerce corporations. According to a RedSeer report, throughout the Black Friday sale of 2020 within the US, main social commerce firm Shopify clocked $5.1 billion in gross merchandise worth, whereas Amazon was barely decrease at $4.8 billion.

A major difficulty being flagged with this mannequin is the rampant incidences of faux and counterfeit items being delivered by way of the platforms, on condition that there’s little or no management over the provision chain and stock. Most lately, in accordance with reviews, an FIR was filed towards Shopee in Lucknow by a complainant alleging duplicate merchandise being delivered from the platform.
In response to a set of queries despatched by The Indian Express, an announcement from Shopee famous: “Shopee is a Singaporean company committed to helping Indian small businesses thrive through our online e-commerce marketplace. We aim to partner in India’s digital economy mission while contributing to the Aatmanirbhar Bharat Abhiyan. We are humbled that thousands of local sellers are already growing their online business on Shopee”.
“The sale of counterfeit items, and other products that infringe IP, is strictly prohibited on our platform. We require our sellers to be compliant with both local regulations and our own policies. We also employ various proactive screening measures to identify listing violations, and we provide procedures for IP holders to request takedowns of infringing listings,” it added. In India, the subsequent frontier being focused by these social commerce corporations is the grocery area, the place lots of them together with Flipkart and Meesho have marked their presence.