As e-commerce evolves globally, all eyes are on the Indian consumer market. Commerce and retail are undergoing a massive transformation in India. While the last decade was about the rise of e-commerce, the next decade is about a new wave of commerce centred around ‘conversational commerce’.
So, what is conversational commerce? Conversational commerce is the convergence of social interactions, entertainment and commerce. As Connie Chan from Andreessen Horowitz put it, “The next Amazon competitor is likely going to look like a social or video app, not a shopping app.” Essentially, the next phase of commerce will see consumers shopping through immersive and interactive shopping experiences.
When we think of traditional e-commerce, we think of going to a website, typing in what you want to buy, add to cart, checkout – Simple & Convenient. However, the next phase of shopping and commerce will be where the consumer will be able to converse with the brand and the seller and discover the product and characteristics while also being entertained by the brand.
We’ve already seen a start towards conversational commerce via shopping on chats. However, it is essential to realise that conversational commerce extends much beyond text-based chat driven shopping. While text-based chats and shopping are a core underpinning of conversational commerce, the future will extend to include audio, video and augmented reality as consumers discover, shop and interact with brands using their smartphones.
For example, an interactive live stream shopping experience would be an example of how conversational commerce mixed with live video can completely transform the consumer shopping experience. Consumers will get to discover products, be entertained, interact with the brand via conversational commerce during the Livestream and shop. This experience will be very different from shopping off an e-commerce website. The key takeaway is that immersive and interactive shopping experiences are the future of shopping.
Chats or conversational commerce is inherently better suited to interactive shopping experiences versus what websites can achieve. The ability for the consumer to interact with the brand and help get a better product for themselves will help drive consumer satisfaction higher and help brands sell better.
Internet & Digitisation
While conversational commerce evolves, the question is, why is the Indian consumer market particularly well suited for conversational commerce? To answer this question, one must understand that the evolution of commerce in any market is driven as much by business models as it is by social dynamics, internet adoption and consumer behaviour.
In the developed economies, Internet adoption was primarily driven by desktops and browser-based surfing. As the internet evolved and internet-based commerce became ubiquitous, it was natural that shopping on websites in the browser was the natural starting point for commerce. On the contrary, in India, a large part of the population skipped computers and got introduced to the Internet via smartphones and chatting via those smartphones. Therefore, commerce as a natural extension of the phone-based chats or “conversational commerce” offers enormous potential to tap into the Indian consumer base. To understand the enormity of the opportunity, one needs to appreciate the fact that India has gone from having 76 million smartphone users in 2013 to 760 million smartphone users in 2021.
Essentially, for a lot of Indians, the chat window is the access point to the Internet. Therefore, given the habits, utilising a chat-like experience to deliver a high-quality commerce experience to the Indian consumer holds great value.
Additionally, Indians not only use the internet on smartphones via chats but also view shopping as an interactive social experience. Shopping in India is far more than convenience. Shopping is at the confluence of social interactions and entertainment. Therefore, even as more and more Indians are digitally influenced, the digital experience will encapsulate the interactivity, entertainment and social aspects that shopping means for Indians.
To elaborate on the above, Indians love to shop with their family and friends, and the shopping experience is also highly entertaining. A chat-based conversational commerce experience will allow those shopping and discovering products online to have an exceptional customer experience.
Additionally, chat-based commerce also allows the entire journey to be captured seamlessly from discovery to post-sales consumer service on one single platform. As a consumer, the ability to view and discover products, learn more about the product, interact with salespeople, make a purchase, make the payment, and get post-sales customer service on one platform makes the consumer experience far better than anything else out there.
It is also important to realise that the evolution of commerce is also dependent on the underlying infrastructure. According to a report by Ericsson, India is expected to have 350 million 5G subscriptions by 2026. The proliferation of 5G in India in the years to come will lead to low latency access of data. This fundamental change in infrastructure will further help develop interactive and immersive shopping experiences for Indian consumers through their smartphones with a focus on “conversational commerce”.
In summary, the Indian commerce and retail landscape will see consumers getting access to shopping experiences that are immersive, social and entertaining. Chat-based shopping is the start of conversational commerce. As the ecosystem evolves, commerce and shopping in India stand to be transformed.