Social commerce to become a $7 billion opportunity by 2025: Report

The social commerce segment comprising of firms like Meesho, Mall91, Shop101, Dealshare, and Bulbul, is expected to be a $7 billion opportunity and contribute at least 5% of the overall e-commerce market by the fiscal year 2025, as per data by management consultancy Redseer.

Who is shopping?

As for who is shopping, close to 80 percent of those using social commerce platforms come from towns and cities beyond the top metros, LiveMint reported.

In horizontal platforms, including Flipkart and Amazon India, almost 40 percent of their customer base comes from top metros with the remaining 60 percent comprising of non-metro town shoppers.

As per Redseer, social commerce players are seeing the most growth from tier-II cities. This is unlike other e-commerce players.

"From the $38 billion e-commerce industry in 2020, it is estimated that the entire e-commerce industry will grow up to $140 billion by 2025 and major social commerce players will contribute at least up to 5 percent by then," it was quoted as saying.

Also Read: Explained: India's new draft e-commerce policy and how it will impact the e-tail space

What models operate in the social commerce network?

According to Redseer, there are three kinds of models in social commerce- the reseller model, group buying and live commerce. Of the three, reseller model is the largest at the moment.

Currently, the reseller model is pegged at $600 million in 2020.

In it, resellers sell products from suppliers, with social commerce platforms taking care of shipment and logistics.

Which category dominates social commerce?

Social commerce in India had deeply penetrated into wear and accessories. This can be attributed to the fact that they are largely unbranded and have low ticket size, the report said.

Fashion also continues to dominate these platforms, with significant scope in the fields of home furnishing, costume jewellery and electronics accessories, to grow on social commerce platforms among tier-II shoppers, according to Redseer.