Walmart-owned Flipkart has launched Shopsy, an app that will take social commerce to a whole different level. The app will allow anybody on social media to become a reseller of products featured on the online marketplace and earn a small commission.
What is Flipkart trying to gain from the launch of Shopsy?
The e-commerce platform hopes to popularise online shopping among the growing community of internet users in the country.
There are likely to be 900 million active internet users in India by 2025, as higher adoption takes off in rural areas. Individuals spend almost three hours a day on the internet, mostly messaging, social media networking and watching videos. Online shopping is barely in the cart of these people, the reason being lack of trust and technical complexity.
Such hesitancy is prevalent not just in the rural areas but also among the middle-aged and the elderly in the metros and cities who are only technology savvy enough to use WhatsApp and Facebook.
How does Shopsy work?
The app allows users to create accounts and send catalogues of the products available on Flipkart to potential customers through social network channels like WhatsApp.
Once the customers decide what they want to buy, the Shopsy user can make the purchases on their behalf and in the process earn commissions that could range from Rs 5 to Rs 25, or even more, depending on the product category and ticket size.
Picture this: In the good old days, women would visit residential colonies with bags full of suits and sarees to sell to housewives. These women would largely be salespersons of a saree manufacturer or shopkeeper. Flipkart is trying to digitise this concept with Shopsy – cash in on an individual’s social network to widen its reach.
What’s the potential?
Flipkart currently has over 150 million products from 350,000 sellers on its platform. With Shopsy, Flipkart aims to enable 25 million online entrepreneurs to reap the benefits of digital commerce by 2023.
This is similar to influencer promotion. While the influencer’s job ends by promoting a product, these resellers will also be responsible to conclude purchases by making payments on behalf of customers.
Although the commissions appear small, the earnings of resellers will depend on how strong their network is and how enterprising they can be. It’s the job of a salesperson!
Shopsy vs Shopify
This is not the first time that Flipkart is experimenting with the social commerce model to widen its reach. Last year, it launched 2GudSocial, where social media influencers could help consumers in buying products online through video shopping experiences.
According to a media report, the company plans to help resellers with Shopify-like storefronts. However, Flipkart did not confirm this.
The model of Canada’s Shopify is very different from what Shopsy currently offers. Unlike Shopsy, which allows individual resellers to send product catalogues to customers, Shopify creates digital storefronts for sellers who send these links to potential customers through social media apps.
Building on trust
While India’s e-commerce sector has so far been dominated by a few large companies, social commerce is gradually paving the way for a more distributed model that’s built on community, connection and trust.
Social commerce is a $1.5-2 billion market today and is expected to grow to $70 billion by 2030, according to a recent report by Bain & Company and venture capital firm Sequoia Capital.
The launch of Shopsy comes on the heels of proposed norms for e-commerce companies that bar them from listing related parties as sellers on their marketplaces. If these norms are approved, they could disrupt the business models that marketplaces and aggregators such as Amazon, Flipkart, Swiggy and Zomato have in India.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
