How Social Commerce is driving Sales Growth

As the digital era continues to take over all aspects of our lives, it has improved and enhanced various facets of how we live, shop, travel and experience other things. With the rise of online communities and global interconnectedness through the web, people started shopping online, bringing in the wave of e-commerce, which has only strengthened over the years.

As everything evolved, so did the way of buying and selling, online.

E-commerce transactions, where buyers and sellers interact on social media platforms with each other before concluding a purchase is called ‘social commerce’. In other words, shopping through social media is referred to as ‘social commerce’. Social commerce is different from social media marketing as it doesn’t redirect you to an online store but gives the customer the ability to checkout directly within the network that they are using at that very moment.

It is no news that every hand has a smartphone today and social media is the favourite destination for all ages- Facebook, Instagram, Twitter, Snapchat, Etsy, WhatsApp and the list goes on. From world news to updates on your favourite celebrities, one finds it all on social media. The benefits of using these platforms are plenty, and one’s presence is becoming a necessity/ compulsion, all due to this digital age sensationalization.

Although social commerce has been present in some form or the other for the last 15 years or so, it has really taken off in the last couple of years. According to a Bain & Company report, social commerce in India (in terms of gross merchandise value) was estimated at ~ US$ 2 billion in 2020 and is projected to reach US$ 16–20 billion by 2025 and US$ 60–70 billion by 2030.

One of the biggest drivers of social commerce and even eCommerce was the global pandemic. As people could not step out of their homes and products- from essentials to luxury were all accessible just a click away, social commerce and eCommerce saw an exponential rise. Social media being the only outlet and way to socialize despite staying in the four walls of the house, shot up in popularity. Various new platforms emerged and now people could shop from big brands to small businesses, all while scrolling through their feeds.

The key drivers of social commerce are as follows-

1. Rise in inclination towards online shopping- Due to factors like convenience, variety, ease of buying and most importantly the global pandemic. The eCommerce sector has seen tremendous growth ever since the pandemic began. According to Forrester Research, Indian e-commerce sales increased by 7–8% in 2020.
2. Increase in the number of online shoppers- as the preference increases, more and more people are shopping online. A very high number of people engaging on social media for content creation and consumption is giving a boost to social commerce as well.
3. Surge in investments- Key global players are increasingly investing in platforms to enable social commerce. For instance, Facebook invested US$5.7bn in Reliance Jio and Google put in US$4.5bn in Jio Platforms. Small and midsized sellers are also adopting the new ways of social commerce to reach their audience remotely.
4. Growing influence of the influencers- With content creation taking the lead as a greatly promising career, people are now able to make highly commercialized content with just home setups. More and more influencers are getting brand deals which are materializing into the growth of buying products on these social media channels.
5. Emergence of new concepts of buying- Business models such as group buying and reselling are gaining rapid attention amongst people and social media facilitates these business models, thereby making it easier for consumers and buyers to connect.

Through social commerce, brands can reach consumers in places that matter and have the highest probability of converting as they spend the most amount of time on these social media platforms. Creating a frictionless shopping experience by eliminating extra steps like redirection to a website cuts down the possibility of a potential customer changing their mind and results in a higher possibility of getting converted. The eCommerce boom helped and is still pushing related concepts like social commerce. People looking for lower-cost products or an impulse buy would want goods just a click away which is facilitated by social commerce. It will only get better with time with more innovative and simpler solutions making consumer experiences seamless.

This post was originally published on: Ranjandastalks.com