India's social commerce sector has the potential to grow to $16-20 billion in gross merchandise value (GMV) over five years from $1.5-2 billion now, according to a report by Bain & Company and Sequoia India. This is poised to grow further to $60-70 billion by 2030, driven by formats ranging from conversational commerce on chat platforms to video-led commerce and a vibrant social reseller community, it said.
The report, titled ‘The Future of Commerce in India—the rise of social commerce', said Indian e-commerce, powered by cheap data, supply-side innovations and digitally savvy customers, has become a $30 billion GMV industry in fiscal 2019-20.India's social commerce sector can grow to $16-20 billion in gross merchandise value over five years from $1.5-2 billion now, says a report by Bain & Company and Sequoia India. This is poised to grow to $60-70 billion by 2030, driven by formats ranging from conversational commerce on chat tools to video-led commerce and a vibrant social reseller community.#
India has the second-highest number of connected users globally, at around 572 million with substantial room for growth (41 per cent penetration).
"Social commerce in India is broadening India''s e-commerce sector and paving the way for a model that''s built on community, connection and trust. While traditional e-commerce will continue to flourish, social-led models will broaden the reach of e-commerce for Indian consumers," Arpan Sheth, partner and leader of Bain & Company's Asia-Pacific technology, vector and advanced analytics practices, said.
India is in the early stages of online commerce, with only 8 per cent of Indians (about 105 million) shopping for products online, accounting for an average spend of $286 per year—much lower than other markets, a company press release said.
"Social commerce is playing a key role in democratising online commerce, connecting brands, consumers and small businesses directly through social platforms and meeting the modern consumers'' need for personalised, differentiated products," Sequoia Capital India LLP vice president Shraeyansh Thakur said.
Thakur added that social-first models have been able to scale with much lower customer acquisition costs globally and similar trends are being seen with Indian startups experimenting in this space.
A large percentage of sellers using social commerce are small, offline-oriented retailers who have found that social channels open new avenues for growth.
A subset of resellers are often first-time entrepreneurs earning Rs 5,000 to 10,000 a month and leveraging the power of their existing social networks to sell to friends and family.
ALCHEMPro News Desk (DS)
marketing@alchempro.com
