Social commerce and how Meesho is disrupting the Industry in India

Commerce has moved from traditional brick and mortar to online, and now it’s moving from websites/app to social media.

Social commerce has the potential to overcome many of the constraints that women disproportionately face in starting and expanding businesses, including low access to capital, restricted mobility, constricted social networks, limitations on inheritance and property rights, and being “time poor” given the childcare and household responsibilities that largely fall to them.

These constraints contribute to a gender gap in entrepreneurship in India, where women own less than 10 percent of all micro-enterprises (4.6 million). Social commerce may reduce barriers to entry by allowing women to start businesses from home, eliminating the need for capital to invest in a physical storefront or large amounts of inventory. Conducting business online can accommodate women’s mobility and time constraints, allowing women to coordinate with suppliers and customers at any time of day and serve customers via delivery services rather than wait for them in a physical store.

Social Media has deep penetration to Tier II, III and IV markets in India. More and more local manufacturers, suppliers and wholesalers are looking forward to expanding their presence in social media for the very same reason of getting access to millions of users.

It is clear that a large pool of ready customers and lower overheads are going to attract investors and the adoption of social commerce is going to increase in the coming days.

PayPal’s report on Social Commerce shows that, while surveying small business owners, 79% prefer selling through Social Media. Across Asia, India emerged as the top market in terms of using Facebook, WhatsApp, Twitter and YouTube to sell goods and services.

When it comes to traditional e-commerce Customer Acquisition and Retention are the most cash burn stage in the funnel. Whereas in Social Commerce, users are already in the platform, and social media players are taking the effort the bring awareness on Commerce.

There is a huge unorganized market of suppliers and manufacturers in Tier II, III, IV cities of India. The only concern for e-commerce players was to expand to over there without discounting/cash burn model, and now that social commerce startups have already shown its potential to explore the unexplored market at a way lesser cost, the puzzle is more or less solved.

It does prove that the rise of Social Commerce is inevitable and it is the future of e-commerce in India.

India

In last 1 year, Social Commerce startups have raised over $100mn funding and have on boarded over 10mn resellers in the platform. Primarily these resellers are from Tier II, III and IV market, and interestingly, 1.8 million women are selling $8 billion worth of goods socially in India, and it is estimated that 30 million women will be part of social commerce by 2022.

The e-commerce sector will continue to grow, recent market research predicts that the e-commerce market in India would be worth $220 billion by 2025, and social commerce has the potential to become $100 billion market.

China

China’s social commerce market grew at a compound annual growth rate (CAGR) of 138.2% from 2015 to 2017, and is expected to reach 547.4 billion Yuan in 2018 and further to 2,419.4 billion Yuan in 2022, according to iMedia Research.

Funding snapshot

Meesho is an Indian-origin social commerce platform founded by IIT Delhi graduates Vidit Aatrey and Sanjeev Barnwal in December 2015. It enables small businesses and individuals to start their online stores via social channels such as WhatsApp, Facebook, Instagram etc. Meesho is headquartered in Bengaluru, India and was one of the three Indian companies to be selected for Y Combinator in 2016. It was also a part of the first batch of Google Launchpad — Solve for India program. In June 2019, Meesho became India’s first startup to receive investment from Facebook.

Vidit and Sanjeev built Meesho as a suite of tools that helps re-sellers sell fashion products through Whatsapp and Facebook more efficiently.

Today, this includes customer management, inventory management and order tracking across the supply/distribution chain as well as a curated supply marketplace, which helps their resellers source more products to sell with greater ease. The product is free for sellers and Meesho monetizes through commission.

Meesho is available in more than seven languages other than English, and about 40 percent of its daily usage comes from a non-English speaking audience

Conclusion

what were are seeing today in the emerging social commerce field is just the beginning of a future where creating your own selling platform will no longer be viable.

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