The Power of Social Commerce

The Power of Social Commerce
Social Commerce' has become an axis point for businesses to drive their content, community, commerce, and lower costs of customer acquisitions.

By Avlokita , Author

04 Jul 2022 | 23 min read

At the intersection of the evolving technological landscape, emerging social media platforms, and the role of the internet in the growth of businesses lies e-commerce -  a thriving channel for businesses that sublimely has been adapting to the behavior we now refer to as ‘social shopping’ - consumers and brands connecting on social media platforms to make informed buying decisions.

‘Social Commerce’ has become an axis point for businesses to drive their content, community, commerce, and lower costs of customer acquisitions - the 4 C’s that were the key talking points by our panelists at D2C India 2022  that elaborated on how their brands are capitalizing on the ‘Power of Social Commerce’. 

The pandemic fueled it, businesses leveraged it and consumers adapted to it. From brand discovery to the checkout process, Social Commerce today facilitates enormous opportunities for a business to grow and expand. It helps brands scale by optimizing costs, time, and labor. Social media platforms like Facebook, Instagram, and WhatsApp have transformed into sales channels that brands can use to attract, convert and retain customers.

In our panel, we graced a cohort of founders and senior dignitaries from brands like Roposo, Poshmark, Gobillion, and Dealshare to take us through the close quarters of their brand-building process and how they have leveraged Social commerce in their respective journey’s so far.

What is ‘Social Commerce’?

The internet keeps offering us buzzwords that see-through cyclical highs and lows. A year ago Social Commerce became a big juggernaut that rolled into India and a whole bunch of companies raised a million dollars and turned into unicorns. The expanse of audience types and content formats that these platforms have to offer makes it easy for brands to list their products and services in customer-friendly ways, thereby easily usable by influencers and content creators which in turn leads both sides on the path to profitability. However, the definition of ‘Social Commerce’ would never be the same for brands at any given point in time because of the evolving nature of social media platforms and the methods in which they are leveraged by brands. Here’s what the panel had to say about ‘social commerce’.  

According to Shantanu Singh, Growth & Marketing, Dealshare, “A very interesting part about Social Commerce is the virality part of it. Most of the people sitting in this room wouldn’t ideally want to think beyond the Instagrams and Facebook of the world. But actually, we just scraped the surface of it. We’ve gotten a huge response from WhatsApp. The engagement programs that we’ve run on WhatsApp for a while allowing our users to save money and there has been a flood of people joining our WhatsApp groups. We share make-up tips, secrets of Ayurveda, and even the typical saas-bahu serial nitty-gritty. That’s where the virality kicks in. It should be in a sharable format. For us at Dealshare, the Social Commerce bit is slightly beyond the Instagrams of the world as most of our TG is not on Instagram. I don’t say that none of them are on Instagram, but what we try to look at is the virality part of it in a period of a month. We try to capture the market which is a typical uncle who sends you Good Morning messages and then combines it with tips on how they can save money, download our app, and so on. I hope I answered it correctly.” 

The key, therefore, lies in a deep reflection of the platform and the behaviors that make a perfect match for a brand’s target group. Roposo and Poshmark cater to the other part of India which is very different from the one that Dealshare caters to. Roposo, for instance, has chosen to go for a ‘Live Commerce’ format of Social Commerce in building a creator/influencer-led virtual shopping experience. 

“Fundamentally, when we thought of e-commerce, first it was a very individualistic experience where one literally opens the website and buys. Social Commerce basically brings in the ‘social’ element to it. At Roposo which is a live commerce format - a creator/influencer is taking you through the product, explaining it, and will interact with you to answer your questions and clear your doubts. Further, because it’s entertaining, one can also send gifts, etc. It’s a highly engaging format - almost like recreating an offline shopping experience with a group of your friends/family, try on things and ask questions/interactions like ‘bhaiya aur dikhao’ (show me more). That’s what Social Commerce for me is at Roposo where we are bringing the latest of all three - content, creators, and interactions to offer an engaging shopping experience. For us, we define our core TG as Gen Z. We like to call them Gen NOW. Think of them as college students, first jobbers, and teenagers. The ones who want to try and experiment with different things and are not usually satisfied with one thing,” stated Abhinav Jain, Commerce and Experience, Roposo. 

Building a Peer-to-Peer Network

Poshmark is distinctly different from Dealshare and Roposo where it deals peer-to-peer while also being a very strong community of first-time and repeat buyers who proudly choose the experience of pre-loved products over new ones and brands who can directly sell to their respective audiences through the Poshmark app. 

 “It’s very interesting how we all are chronologically defining Social Commerce. There was a time when (at Poshmark) we were shopping from sellers - where you were looking at an app/website, a seller was selling something to you on a marketplace. Then we came across aggregators or people in the neighborhood who started out together. Then we spoke about influencers who are standing up there and talking about a product,” asserted Anuradha Balasubramanian, Director, and Head of Poshmark India Marketplace.

“Here we are at Poshmark where for us ‘Social’ is literally you and me. We call it peer-to-peer - I sell to you and I buy from you. With us the definition of a buyer and seller gets hazy and that’s where our flywheel really is and all about. Today, I might like the shirt that Sunil is wearing and if Sunil is bored of it or doesn’t like to repeat his shirts, he can go and list it on our app. In turn, I as another buyer might want to buy something for my husband and don’t wish to spend a higher number. I can just buy the shirt from Sunil. He may decide to sell because he wants to recycle his wardrobe and earn some money in return and I may do this because I am a sustainable shopper or I am not just looking to buy and dump stuff in my closet or I want to keep revolving my closet. So for us, the whole concept of ‘Social’ is really ‘you’ and ‘me’, with no one else in the middle. What happens on a platform like Poshmark - which is built in a very social Instagram-ish way - is that power sellers or high-profile sellers (who are repeatedly selling and engaging with other users) become cozy influencers of sorts. 

“We have what we call ‘Posh Ambassadors’ who have millions and millions of followers. They’d be making about 5, 6, 10, 12, 15, 30, or 100’s of sales every day. In a marketplace like India, it’s evolving but in the U.S. - where we are headquartered - they’d be doing millions of dollars worth of sales every day. They may not have started as individual sellers but they become one. They start sourcing once they run out of material. So for us, ‘Social’ is a completely new dynamic. It breaks the boundaries of intermediaries. I think that’s very powerful as currently in India, influencers play a huge role in shaping the new age concepts of ‘preloved’, ‘new’, ‘thrifting’ etc. at Poshmark - which are very new in India. Influencers and Gen Z are playing a huge role in bringing in the acceptance for these concepts, building a relatively thriving community, and power of value as they believe in owning an ‘experience’ over a ‘product’. The ‘Social’ element is, therefore, more for community and curating a certain type of choices,” she further added. 

Tier I and Beyond: Onboarding New Wave of Consumers

Gobillion is again very uniquely positioned in the Social Commerce space. With its focus on Tier II and Tier III cities where it leverages the strong element of ‘community’ and ‘social connect’ in these markets to connect the customer directly to a manufacturer or a distributor. 

Roshan Farhan, Founder, and CEO, Gobillion stated, “Sure. I’m a small-town guy and largely we’ve to look at how ‘Social Commerce’ will evolve - not just in India but also globally in other emerging economies. If we have to go back 10-12 years in time, when e-commerce started in India with the Flipkarts of the world, the pure play focus was always on the large cities of India for the first 100 million customers to get a good deal and convenience. But as India and the other emerging economies evolved, it’s the customer who started changing. A lot of customers started coming from small towns, where I come from. The reason why ‘Social Commerce’ started to take importance and shape itself was that we realized we had to take a different approach and not just lift and shift the e-commerce 1.0 model and acquire and retain them.” 

“So my version of my book, Social Commerce is using any social media lever, be it a WhatsApp or any other live commerce/social media tool to acquire, retain or convert customers. Especially at Gobillion, our TG is very specific - the Tier II and Tier III audiences - typically those customers which are overlooked by traditional e-commerce players, the low-income and the mid-income groups. We’ve seen there’s a very strong element of community and social connection in these markets. Basically, what we are doing at the core is augmenting the natural shopping behaviors which they demonstrate while shopping offline - be it group shopping or live shopping, voice or apple shopping as well. It’s about observing their natural shopping behaviors and augmenting that through technology and making it much more seamless to kind of acquire these customers and retain them. Directly connecting to your customers by bypassing traditional aggregators is a great way to better manage your customer relationships and also have a higher LTV (Lifetime Value) of the customer. Gobillion is a B2C-focused platform that connects a customer directly to a manufacturer/distributor. In essence, retailers don’t directly benefit from Gobillion,” he further added.

With close to 35,000+ D2C brands in India, we are in the middle of that golden period of D2C. What happens when a brand moves two degrees lower to Tier III cities where markets are emerging and also constitutes a large number of first-time consumers? We asked our panel to shed some light on the markets and consumers that remain untouched.

“I think there are multiple things that are at play here. First, the Jio effect, the smartphone effect, is what makes live commerce so popular today. Today, anybody sitting anywhere in the country can watch a live stream. Five years ago, this was not a reality. One had to sit next to broadband, on a desktop or a device basically with a proper internet connection. So that’s what enables this live entertainment commerce where one can access it. Also, from a creator and influencer standpoint, they can go live from anywhere. We live-streamed an entire rendezvous of IIT Delhi Fest and an entire musicathon from Bir in Himachal Pradesh, literally by setting up mobile phones around the stadiums. It’s a macro shift that we are witnessing and which is why it is picking up,” Jain said. 

Defining a D2C Brand for the ‘Indian Consumer’ 

D2C brands that are born in India are very uniquely positioned to define their niche for a country in which habits, tastes, preferences, and even the cohort of consumers differ every 20-30 km. A garment like a saree is worn in fifty different ways and formats across the country. So the emergence of various D2C brands only tells us that every brand can have its own niche audience and reach its end consumers. 

“For us, it’s a great place because like you said, 10 daily shows is a lot, we do 40 daily shows and close to 1,000 D2C brands listed on our platform already - in addition to the direct manufacturers and the factories that we’ve already tied up with. So our depth of product or shows is fairly deep. Yes, some shows are tailored to metros and Tier I, but then, we also have shows where our product ranges are how do you get a combo in Rs 199. All of those are easy impulse purchases. As you rightly pointed out, it’s now about ‘discovery shopping’ and not about ‘intent shopping’ where people want to come, see and explore. So ours is a place where people can come, see and enjoy and of course along the way shop as a part of that journey. This I’d argue is the right way for people to come and experience the internet,” Jain added. 

Being ‘Brand Agnostic'

We can start calling this D2C phase the ‘Aspirational Commerce’ for India. Each brand has the potential to tap into a trove of opportunities to serve the Indian consumer. Anuradha from Poshmark shared a very nuanced outturn of the app that dilutes every definition of a ‘brand’ per se. 

 “It's a very interesting concept over brands. For us, we are a marketplace and it’s like your closet is my inventory. So I am not really speaking of a brand. But, there are two very interesting trends that we are seeing at Poshmark right now. One, many brands (in fashion, accessories, and electronics segment) feel that there’s so much that goes to landfills and there’s so much wastage. All of a sudden these brands are aware that the garment or the outfit that they made has a much longer life. This means that there are going to be alternate lives for these products, one after the other - which only means that the brand has created more value. That can happen on Poshmark. This means a Zara bag that I once proudly flaunted and now, of which I am bored, doesn’t have to be tossed away to someone who doesn’t see the value in that bag - it can be sold to someone. I think a lot of brands are looking up to platforms like these because 1. Conscience is clearer and 2. The larger lifespan of products,” she said.

“Second trend or aspect which is completely different where brands, especially in evolved economies and countries like the U.S. where we’ve been for over a decade, is that they feel this is the platform where they can speak to their consumer much faster as compared to traditional methods. Even an Instagram today doesn’t give you direct insights. On other hand, a Levis can have a store on Poshmark where they can talk to their customers or they can come back and tell the brand what they want. Or you will be able to bring in a new concept, fail fast and go back to the drawing board to improvise in real-time. One doesn’t need to have that long lead time. This is more evolved in economies like the U.S. but I feel this is where the power of social commerce comes in at best and the phrase’ aspirational commerce’ ties back in the conversation.” 

Competing the Competition 

D2C brands face direct competition from large established marketplaces in India and globally for e.g Flipkarts and Amazons of the world. In such a scenario, start-ups need to be patient and continue to shape their offering for the customer, spending some time monitoring the performance and consumer behavior. The founders spoke about how to develop a deep understanding of the target audience, their needs, and preferences and focus on learning and unlearning to discover opportunities and deliver better solutions over fearing competition. 

“To be very frank, this popular company is changing gears and getting into the groceries space. Flipkart being a U.S./Singapore company is doing well as a Social Commerce company but how we at Dealshare see it as their TG and our TG is very different. When we say that we will open in Rajasthan, we mean very small town bastis like Chunchuna, Padmer, etc. There are a lot of companies, which we won’t name, who say that we've opened in Rajasthan and then they are not beyond the Ajmer Road in Jaipur. Similar kinds of stories in Madhya Pradesh, U.P, and Karnataka. We call it the Silicon Valley of India but then you see that there are so many companies that do not cater to small towns like Hubli, Tumkur, etc. So we are enabling the so-called buzz word ‘Bharat’,” Singh said. 
“There’s a very interesting thing that we learned that these are the people and families with just one smartphone in the entire family, people who are getting connected slowly with each other they make for the ‘new users’ being added into the ecosystem. So, there isn’t a lot of data available about them. What do they like, how do they shop, what are they looking for, their preferences, buying and spending patterns, etc. So we are also evolving, learning, and unlearning. So the bigger social commerce/e-commerce players who will enter this market will also have to spend a decent amount of time unlearning. That’s where the tricks lie. I personally feel the bigger the pie, the better it is for all of us,” he added. 

The ‘100 million customers’ benchmark is already here for the D2C brands to fire a chase. It's real, it’s what exists today. It’s for the D2C space to now nurture and build the ‘Aspirational Commerce’ that will cater to the next 50 million customer base.
It’s an interesting time and dynamic for every single D2C brand in India today to operate - in a multitude of ways. The way everyone consumes commerce, and the way consumers and brands will participate will define the journey ahead for this industry. The aspirational 100 million is strangely real. 

At the intersection of the evolving technological landscape, emerging social media platforms, and the role of the internet in the growth of businesses lies e-commerce -  a thriving channel for businesses that sublimely has been adapting to the behavior we now refer to as ‘social shopping’ - consumers and brands connecting on social media platforms to make informed buying decisions.

‘Social Commerce’ has become an axis point for businesses to drive their content, community, commerce, and lower costs of customer acquisitions - the 4 C’s that were the key talking points by our panelists at D2C India 2022  that elaborated on how their brands are capitalizing on the ‘Power of Social Commerce’. 

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