Ease of Doing Business for MSMEs: Ahmedabad-based Vivek Sidhwani had expanded his offline business of selling fashion apparel for women to online commerce before he joined Flipkart’s social commerce platform Shopsy, looking at the growth of social commerce platforms in India. Selling on Shopsy over the past two months, said Sidhwani, helped his business grow over 2x in a short time. “From day 1 we are getting orders. The payment cycle is only 15 days and there are no shipping charges. This is benefitting customers. 50 per cent of our business comes from the online channel. Shopsy is better than offline in terms of sale, payment etc.,” Sidhwani told Financial Express Online. 

Likewise, Shubhra Mishra had joined women-only social network Sheroes’ reselling community Sheco, which was launched in 2020, in February last year to become more than just a Hindi teacher. Mishra runs an online store on Sheco as one of its partners selling apparel, utensils, snacks, etc. For her, running the business from home is the biggest comfort. “Sheroes has helped us with everything – selecting brands, cataloguing, product images, and more. I have sold around 700 products so far and got around 60-70 returning customers,” Mishra told Financial Express Online. Currently, she is able to add around 4-5 new customers every month and earn Rs 15,000 – 20,000 per month.

Social commerce in India is gradually evolving to help individuals turn entrepreneurs and leverage interactions happening through social networks to influence customers for purchases, particularly those based in cities beyond metros. According to a Bain & Company report, the social commerce market will be worth as much as $20 billion in just five years from $1.5 billion to $2 billion, as of December 2020. The market is likely to hit nearly $70 billion by 2030.

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Moreover, digitally connected people in India spend an average of three hours per day online, of which more than two hours are consumed by messaging, social media networking and watching videos. This is enabling small businesses to sell directly to consumers through different social formats such as conversational-commerce-on-chat platforms like WhatsApp, video-led commerce such as BulBul or SimSim, social reseller communities like Meesho, GlowRoad, Shop101 etc., social network-led platforms such as Facebook or Instagram, and group buying format such as DealShare, Mall91, etc.

For instance, after two unsuccessful attempts in running an online business, Rajat Jain joined social commerce platform Meesho in 2018 with his T-shirt brand Smartees based in Tiruppur. From around 20-30 orders per day initially, Jain has scaled the business to around 500 orders per day. He started his own manufacturing with Rs 10 lakh assistance from Meesho in 2019. “On Meesho, we achieved a turnover of Rs 8 crore in 2021,” Jain told Financial Express Online. The company sells over 2 lakh pieces a month from earlier 10,000.

E-commerce has gained tremendous scale in India, thanks to smartphone penetration and affordable internet, with the number of online shoppers around 150 million in 2020, as per Statista. In comparison, the number of social network users was far higher at 518 million. Hence, brands and digital platforms have been making a beeline for social commerce to find growth with maximum users. The social reselling platforms enable entrepreneurs with the digital inventory of various products that are sourced from suppliers at wholesale prices along with logistics and customer support. Many of these platforms don’t charge a commission from sellers, unlike e-commerce platforms.

“It boils down to trust and ability to create trust. That is the biggest reason for social commerce to do better. Social commerce has been a big phenomenon especially in small markets where platforms are creating trust as a very different thing than it is in larger markets like Delhi, Mumbai, etc. For them it is really the fact that you are either influenced by someone you know or is in your network and that network effect creates trust factor in social commerce,” Ankur Pahwa, E-commerce and Consumer Internet Leader, EY India told Financial Express Online.  

The resellers or entrepreneurs share selected products on their social media accounts for orders and reselling apps share the order with suppliers for delivery to customers through their logistics partners. The popular product categories have been beauty and personal care, apparel, electronics, footwear, food and grocery, etc., catering to the affordable customer base in India. Social commerce platforms have also emerged as channels for better and direct product visibility of products for these small businesses to their target customers.

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Particularly during Covid, social commerce has been the gateway for aspiring entrepreneurs to start their businesses. “I have been on Sheroes for only three months selling electrical goods and clothes. I am able to get direct access to customers through Sheroes. While the income from online selling is around Rs 5,000 — less than around Rs 15,000 I earn as a teacher but I’m seeing around 10 per cent growth every month,” Sheroes seller Saraswati Tiwari told Financial Express Online. 

However, the challenge with Tier-II and Tier-III e-commerce or social commerce segment is the return because return rates have been higher from these markets, according to Pahwa. “The evolution takes time and the risk of products not being accepted is much higher there. It automatically gets inbuilt into the cost. The risk of returns is automatically also passed back to vendors. So it is also for the vendor that the product he/she is shipping meets the expectations that are there from the platform,” he added. 

“We haven’t seen any challenge on Meesho, Shopsy, other platforms we sell on. The returns are around 30 per cent monthly,” seller Sunny Sidhwani told Financial Express Online.