Jay Rathod of Koffeetech Communications gives an insight into the future of e-commerce and why D2C brands need to embrace social commerce.
According to KPMG India, there are already more than 800 D2C brands operating in the nation. The D2C market is presently valued at $44.6 billion, but it is expected to reach $302 billion by FY 2030. Several direct-to-consumer (D2C) businesses, including mCaffeine, Khadi Essentials, Arata, WOW Skin Science, Plum Goodness, etc., have been occupying niche markets and forging strong brand relationships with customers in recent years. D2C start-ups like Mamaearth, Sugar, and others are fiercely competing against big FMCG brands like Himalaya, Hindustan Unilever, and numerous others.
The growing impact of digital information on consumers cannot be disputed. Nowadays, customers have access to a wealth of information before making a purchasing decision. Additionally, the growth of social commerce has enormous potential to affect people's decisions. Since India has one of the highest rates of internet penetration in the world, with 852 million people using smartphones to access the internet at the lowest global data rates, developing an omnichannel presence has proven to be a successful strategy. India has a relatively large population of social media users. This makes it an ideal environment for social commerce to flourish.
The direct purchase or sale of goods or services at the touchpoints where consumers have access to content is known as social commerce. This model assists customers in their quest to discover the latest brands by forcing them to complete the entire purchasing process within their preferred applications.
Although social commerce makes up a minor part of India's e-commerce sector, by 2030, when the e-commerce market is estimated to reach $400 billion, social commerce is expected to reach $70 billion in GMV, based on a study by Sequoia India and Bain & Company.
A Winning Combination:
Without the use of physical stores or third-party e-commerce partnerships, direct-to-consumer businesses and social commerce offer a direct route to customers, giving them full control over the experience that is created for them. Direct-to-consumer businesses and social commerce benefit from knowing where their customers spend most of their time online. Wherever the content-savvy millennials and GenZ go, whether it be Instagram or Pinterest, they both cater to the same age range, and this is directly tied to the expansion of D2C and social commerce.
The Future of E-Commerce:
Social media stores ease the customer journey, lowering friction from product discovery to purchase. Examine it, click on it, and buy it. At the end of the day, every mouse click is a chance for a potential customer to change their mind. Customers may lose interest if they must click from their advertisement to the brand’s website, add the items to their shopping cart, and then enter their credit card information.
Socializing while Shopping:
Buying on social media is a lot more interactive than it is with traditional online shopping sprees. Customers can easily receive advice from their friends before making purchases; flaunt their new high-tops; drop comments; read comments and interact with other customers. For those who miss the social aspects of a day at the mall, social commerce is the next best thing.
Opportunity to Filter Consumers:
Companies can customize and target advertising exclusively to consumers because social media makes a tonne of customer information available. In a way that traditional e-commerce and marketing cannot, social commerce enables D2C companies to put specific, ready-to-buy things in front of the precise customers who would love them.
Increase in Reviews and Recommendations:
D2C brands’ social media profiles are a terrific way to begin constructing that crucial social proof if their business is new to online sales. If their customers buy from an online platform, consumers won't be able to test or try on the brand’s products. They may use reviews to make an informed purchasing decision. By bringing new followers into the company’s funnel, using social media to manage end-to-end customer experience creates a positive feedback loop that boosts the brand’s revenue.
Promotes effective Interactions:
Increased participation is among social commerce's most significant benefits. People are urged to connect with businesses through two-way communication through social commerce. This enables customers to communicate with the company’s business as well as use social media as an efficient avenue for customer service where issues may be resolved. Regular customers of a business are more likely to recommend it.
D2C brands are supplying the underserved market in India's Tier II, III, and IV towns and cities with their competitive prices and online presence. Brick-and-mortar stores were unable to satisfy the aspirations of the youth in these towns for a better way of life. Social commerce began to grow as D2C firms worked to establish an omnichannel presence, and today, working in tandem, they are forging a distinctive combination that offers specialized and personalized products to young consumers. Social commerce aids consumers in their quest to find new brands by enticing customers to complete the whole purchase process inside of their chosen applications.
This article is authored by Jay Rathod, Founder, Koffeetech Communications.