Social commerce to be the future of retail in India
27 December 2021, Mumbai:
India’s $900 billion worth retail market has faced huge disruptions for the past two years with the pandemic. As a result, Indian shoppers choices too are going through a huge transformation with the 140 million e-retail shopper base switching to the shopping of essentials such as grocery, household and personal care items. In fact, India has the third-largest online shopper base in the world, with 140 million e-retail shoppers in 2020, after China and the US.
In fact, the pandemic has helped in redefining the shopping preferences of the Indian customers. Expected to touch $140 billion by FY26, the Indian e-retail market is seeing acceleration in demand from the Tier II and smaller cities such as Guwahati, Patiala, Asanol etc. There is also a growing preference for online payment methods driven by an enhanced customer need for safety and convenience, says a BW Disrupt report. E-commerce adoption in shopping is expected to increase post pandemic, the report adds.
A year of innovation in e-retail
A report by Bain & Company says, the pandemic brought in a year of growth and innovation in India’s e-retail. Since the onset of pandemic, a whopping 84 per cent customers switched to online shopping, adds Shopify Future of Commerce 2021 (for India) report. Majority, of these included younger consumers in the age group 18-34 years.
The category that saw a significant switch to online shopping are: groceries and daily essentials. As a survey by YouGov shows, around 81 consumers switched to shopping groceries and essentials online post pandemic due to convenience, attractive prices and digital payment facilities it offered.
Social e-commerce booms
Social e-commerce also boomed during the pandemic as it offered people an opportunity to reconnect with friends and loved ones. It also enabled them to avail great deals for home utility products as they bought them either collectively or through social network sites. This type of social commerce is more prominent across small towns where people are more socially connected with each other. Such social communities are expected to keep growing in future and boost the growth of social commerce to $100 billion by 2030
More shoppers from smaller towns
In future, online retail will become more accessible to around 500 million customers across smaller Indian towns. Around 60 per cent social shoppers are expected to come from Tier II and smaller towns in future. The recent BCG 2021 report’ The Consumer Sentiment Series’ estimates, 76 per cent buyers will come from social networks/chat groups in future with new users surfacing online. Currently using chats and social media apps to shop, most of these shoppers are expected to switch to social commerce in future.
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