The Rise of Social Commerce
“Social commerce is a subset of electronic commerce that involves social media, online media that supports social interaction, and user contributions to assist online buying and selling of products and services.”
The second year of grad school was what Ambuj and I planned to make different. For starters, we moved into an upscale apartment on the main road facing the Kalyan Vihar Police Grounds in Delhi. Situated just under 2km from our school, it came will all the bells and whistles of a swanky flat, from a fancy chandelier to a large balcony that overlooked a two-laned road laced thick with greenery.
The place was a bit isolated though. It was good partially given how the no noise let me romance a page-turner and bad because fetching grocery was always a pain. I shared the kitchen with Anurag, our third flatmate while Ambuj chose to seek Zomato’s assistance. At times Anurag and I took a trip to the Ghanta Ghar sabzi mandi and other times picked our weekly veggies from the carts on the Vijaynagar main road. The problem wasn’t as much of going out and getting them as much it was of the time. We were almost always bogged down by the innumerable tasks at hand from submitting assignments to filing out corporate competitions to solving case-studies. At those rare moments when we had none of these, we simply would be too tired for anything else. And thus, while we paid our domestic help for the whole week, we barely had food cooked more than thrice. Now this was bothering us because the whole objective of hiring a cook was to dine on homecooked meals, not the ones laced with a generous dose of chemical tastemakers.
The shortest solution was ofcourse looking upto Amazon for help. It had started its grocery services in Delhi recently, and with our Prime accounts lying largely unused, we drafted our first order at around 10:00 PM one fine evening. I was startled by a call at around 6:15 AM the following morning from an Amazon delivery agent who was outside our door with the package. Surprised by the speedy delivery would be an understatement.
I remember first shopping on Amazon over half a decade ago. It was a phone whose make escapes my mind at the moment. That however was a start to what would become a one-sided reliance on the e-commerce website for all my commerce needs. Needless to say, when Amazon came up with the grocery delivery, I was thanking my stars. The company was offering a little more convenience to my otherwise perfect bubble of pseudo significant life. But that morning at 6:15 AM Amazon broke character, however. The bananas were overripe, the spinach stale and the tomatoes could not have been more rotten. I would have blamed Amazon for it, had all these products not been perfectly in shape and colour on the outside. Now why were these then stale on the inside is anybody’s guess.
Having begun our tryst with online shopping of groceries, we looked for our OOH alternatives but to no avail. BigBasket is perhaps the name that would come to your mind. It came to ours before Amazon, we’ll fill you in on that. Except, logging into BigBasket with a pincode that read 110009 would draw out a menu with which one couldn’t make a simple one-course meal. For some strange reason, BigBasket wasn’t offering to us what it was offering to the rest of Delhi or Mumbai or the rest of India.
The only option at our hands was fetching our stock from the carts plying on the Vijay Nagar main road. And that we did. Unable to find broccoli at our usual vendor, we walked to the other end of the road that entangled with GTB Nagar where was housed a clique of carts that seemed to be manned by a young bloke in his mid-twenties called Shiv Kumar. While Anurag sorted through the vegetables, I casually asked Shiv if he’d door deliver. He immediately replied, “Haan bhaiya, no. likh lo, order whatsapp kar dena, 15 mins mey pahuncha dunga, bhaav ka ek rupay ka bhi farak nahi aayega, aa gaya toh paise double wapis. Order kam se kam ₹300 ka karna aur address 2km ke andar ka dena.”
The e-commerce industry in India is expected to reach $84 Bn by 2021 driven largely by a young demographic profile and rising internet penetration. Smartphone shipments in India hit 152.5 million units in 2019 alone, making it the fastest growing market among the top 20 smartphone markets in the world. The Government of India’s policies and regulatory frameworks such as 100% FDI in B2B E-commerce and 100% FDI under automatic route under the marketplace model of B2C E-commerce have been other proponents of growth in this space. Infact, the space is so rich in opportunities, it received over $4.32 Bn for private equity in 2019.
India is also the world’s second largest internet market today with over 680 Mn Indians connected to the world wide web; of these over 400 Mn use social media everyday — that’s roughly 1 in every 3 Indians. Back in the mid-noughties, social media meant GTalk and Yahoo ChatRooms, and at most Hi5. But then the first true social network came into being— Orkut. Besides being given the ‘Pepsi & MTV Youth Icon of 2007’ award, it also won the allegiance (daily active usage) of 19 Mn Indians at its peak before Facebook swept them all in 2010. Today, Facebook has over 300 Mn Indians registered on its website — the highest in the world, and three-quarters of these are between the ages of 18 and 24. WhatsApp, Facebook’s subsidiary, is wrongly classified as a mobile messenger. It has over 350 Mn Indians actively sharing their everyday lives through Status updates, socializing in Groups, and at times even Broadcasting religious or political propaganda. Somewhere in this calculated chaos are also WhatsApp Groups where a young homemaker in her mid-thirties, a thrifty collegiate hustling for tuition, and a cosmetics vendor looking to also sell apparel are all running their drop-shipping business.
Dropshipping is an order fulfillment method that does not require a business to keep products in stock. Instead, the store sells the product, and passes on the sales order to a third-party supplier, who then ships the order to the customer without revealing their own identity to the consumer.
In the US, there are dedicated e-stores running this model. There’s either an army of BDs or a tech-savvy solo commando using the power of targeted ads to draw in customers to the website. Websites like Shopify and Wix provide plug ‘n’ play e-commerce stores that can go live in less than 5 mins. In India, however, this entire model is being run on WhatsApp Groups, Facebook Pages and Instagram handles, where a group of people has already flocked and photographs of inventory are published in short intervals, orders taken through chats, payments collected via Google Pay & Paytm and orders shipped overnight. Facebook has come up with FB Stores to make this a little more organised for these drop-shippers and/or e-tailers, and has now coupled with Reliance Retail to offer order placements of essential goods on JioMart through WhatsApp.
This is Social Commerce!
Shiv Kumar served us well for the rest of the year before we moved out in March. In all our transactions, we never once bothered to ask him the price. In fact, we specifically asked him to sort out our veggies personally and price them whatever he saw fit. He let us pay through Paytm upon delivery, and fulfilled our order with a 100% fill-rate within 1 hour of ordering. There were times when Shiv Kumar insisted on buying a vegetable we hadn’t ordered but had freshly come in. We never once hesitated to blindly trust him and never once were disappointed.
