Increasing preference for online shopping
E-commerce sector recorded growth as most consumers shifted to online shopping as opposed to stepping outside due to lockdown restrictions. The number of online shoppers in India is expected to reach >250 million by 2022, according to RedSeer. Owing to a high level of social media engagement among people, social commerce is expected to play a significant role in expanding e-commerce.
Massive Capital Infusion
The industry is witnessing increasing investments from key global players. For example, in 2020, Facebook invested Rs. 43,574 crore (US$ 5.7 billion) in Reliance Jio and Google put in US$ 4.5 billion in Jio Platforms.
2020 also witnessed significant developments of the domestic players. For example, the acquisition of Future Group by Reliance Retail to expand Ambani Group’s presence in the e-commerce space. In January 2021, Udaan, a B2B e-commerce platform, raised US$ 280 million (~Rs. 2,048 crore) in additional financing from new investors—Octahedron Capital and Moonstone Capital. Many D2C Brands have become household name nowadays.
Widening social media influence
E-commerce is becoming the next-gen tool for Indian manufactures, with ~28% millennials buying products sparked by social media endorsements and while the remaining regularly track brands / trends on social media platforms to stay updated on brands and products.
Evolving business models such as reselling and group buying
In addition to social media-led product discovery, business models such as reselling and group buying have also evolved in this space.
For example, Meesho, India-based social commerce platform, follows a reselling model, wherein suppliers list their product catalogue on the app and individual entrepreneurs/businesses connect with them via Facebook and WhatsApp for relevant purchases. In India, >50,000 suppliers and 8 million entrepreneurs run and manage their businesses using Meesho.
DealShare, a social e-commerce start-up based in Jaipur, sources wholesale goods from local producers and sells them to customers through the DealShare App. The company also offers deals/discounts on its WhatsApp group and each time, users refer/share items to their friends and relatives, they get discounts. It supports >10,000 small businesses.