Social Commerce Ready to Enter Next level

ecoomerce
Facebook drew first blood a couple of months ago. Twitter too began testing a “buy” button, where users in the US can make purchases through a tweet. Social commerce – marrying social interactions with e-commerce – is ready to enter the next level. And industry insiders say, it could only get bigger and bolder in the coming months.

Nitin Chhabra of e-commerce consultancy, Ace Turtle, says that getting into e-tailing seems the obvious next step for social media companies. “Their only model to monetize was through advertising. This makes for a logical next step. There are less than 20 million people buying online in India. If this can help get more people to transact online, it will be healthy for the e-commerce industry,” says Chhabra. Online industry insiders feel the new model won’t possibly compete with existing e commerce players. Entrepreneur Sanjeev Bikhchandani says that a lot depends on how orders are routed. “If the orders are routed to existing ecommerce companies, it may not compete with them,” he says.

JABONG founder Praveen Sinha says while e-commerce players like him can use social commerce platforms to sell, selling on social networks is likely to benefit smaller businesses. “It isn’t a day zero winner. There is a process by which it will evolve. The intent of the user on social media is not to buy, but it can definitely be a channel to sell things like T-shirts or event tickets. For small business owners, like say, someone selling pickles from home, it will be simpler to create a platform to sell online,” says Sinha.

The early rumblings of “social commerce” began about a decade ago, with components of social interactions built into buying online. User reviews, recommendations, wish lists – they were still new and catching on. Social networks amplified the message. Back in 2005, venture capitalist David Beisel predicted, “I envision a day where you can search your social network to find and see what products others who you know own, and whether or not they like them.” Nine years later, enter the buy button. The essence of the new model lies in simplifying the online buying process. So far, buying online involves several steps, starting with adding products to a virtual “cart”, entering contact details, and then going on to a payment gateway , entering card details or being redirected to a net banking portal. In the models being tested, this process will be reduced to a few taps. In the case of Twitter for example, a user’s payment and shipping information, will be stored with the website after the first transac tion, so the next purchase can be done without having to reenter that information. The new model, says Twitter is open to changes with respect to how people choose to use it.

Lessons from the Indian MARKET so far indicate a propensity for cash on delivery (COD) models. Pragya Singh of Technopak says social commerce models will have to evolve according to the domestic market habits. “In India, 60% online buying still happens through COD. When they scale up across geographies, they (social networks) will have to incorporate these things in their payment models, since every market is very different,” says Singh. She also believes that social commerce will help improve monetization and experience of social platforms, make more people comfortable with making inapp purchases, and help businesses drive sales.

Payment models may also have to be tailored to Indian rules. Recently, taxi service Uber that used its mobile app for payments, ran into trouble with RBI for non-compliance with rules on authentication for online transactions.

“Whether that works in India remains to be seen,” says Bikhchandani, founder of InfoEdge and naukri.com In May earlier this year, Twitter had rolled out a feature with Amazon, wherein buyers could add products to their Amazon cart by tweeting with a hashtag. Completion of the transaction can then be done on the Amazon website. Amazon declined to share the numbers regarding the use of this feature, but said they were “pleased” with the response.

“We would like to be where our customers are – be it on social media platforms like Facebook, Twitter, YouTube, Instagram, blogs, etc,” says Kishore Thota, Amazon India’s digital MARKETING head.

There’s no hiding for shopaholics.

 

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