Social or live commerce in India is at an inflection point, having raised over $1 billion funding in 2021 and creating a new retail channel, a report by consulting firm RedSeer said.
Almost all the verticals of India's e-tailing industry grew exponentially last year, underpinning the opportunity for a huge potential market where smartphone penetration and COVID-led digital acceleration have further contributed to the boom. The RedSeer research said that the e-commerce industry in India raised over $10.4 billion funding in 2021, a 3x jump from over $3.5 billion investment which it received in 2020.
The share of social/ interactive commerce in the e-tailing industry has also shown a significant jump in 2021, as per the report.
Multiple players in the social/ live commerce sector are piloting various business models as the sector tries to break out of the infancy stage. The RedSeer research stated that India's video/ live commerce is taking a leaf out of China's successful business model in this particular industry where some of the individual players have even touched $100 billion in gross merchandise value (GMV) .
In India's context, the companies involved in social/ video commerce have a value proposition focus with commerce/ advertisement first approach. The players are venturing into the space through either in-house applications or integration with e-commerce giants. For instance, Flipkart is tying up with short video-platform Moj to take the video/ social commerce offerings to the next 200 million customers, whereas its fashion subsidiary Myntra is testing influencer-led live commerce model.
"This is because consumers are increasingly turning to video to learn about new products compare products and share experiences. Video commerce enables brands to tell their stories in a whole new way that is engaging, entertaining besides building a relationship with the customer," the report said.
The research noted that with the addition of new online retail channels, the digital-first brands have a 250 billion market opportunity by 2030. The direct-to-consumer(D2C) brands are expected to grow at a CAGR of 34.2 per cent during 2018-2030.
"Already digital first brands in India generate more revenue than legacy brands with the size of the opportunity expected to increase significantly over the next decade. This presents an enormous opportunity for digital-first companies to tap into the country's digital-first population, expanding internet-usage and growing digital-first economy," as per the report.
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