E-commerce—powered by cheap data, supply-side innovations and digitally savvy customers—has become a $30 billion industry in India in fiscal year 2020. More than 100 million of India’s estimated 572 million Internet users purchase products online.
And the next frontier is social.
Digitally connected Indians 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. Millions of small retailers are finding innovative ways to sell directly to consumers through a variety of social formats, ranging from conversational commerce on chat platforms to video-led commerce to a vibrant social reseller community.
India’s e-commerce sector traditionally has been dominated by a few large players, but social commerce is paving the way for a more distributed model that’s built on community, connection and trust. While traditional e-commerce will continue to grow, social-led models will help redefine the landscape over the next 5 to 10 years.
We expect that social commerce, which is a $1.5 billion to $2 billion market today, will be worth as much as $20 billion in just five years—and will likely hit nearly $70 billion by 2030. In short, India’s social commerce sector will be twice the size of the current e-commerce market within 10 years.
Social commerce addresses a unique set of needs while complementing platform e-commerce.
In addition to building trust, social commerce meets growing consumer demand for:
- greater product variety and customization;
- a feeling of community connection;
- a bargaining experience similar to offline purchases; and
- a fun and engaging shopping experience.