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Social commerce set to scale, but concern of authenticity looms large: Industry

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The coming together of e-commerce and social media to create a new business channel, social commerce is increasingly gaining traction in the retail space

New Delhi: Social commerce is poised for dynamic growth, with some estimating a 10-fold rise by 2030, but building digital trust and inspiring consumer confidence around product authenticity is what will set the cash registers ringing for brands and founders as online shoppers eagerly browse, purchase and checkout directly from social media apps, say experts.

With the coming together of e-commerce and social media to create a new business channel, social commerce is increasingly gaining traction in retail. Consumers discover and purchase goods and services directly through social media platforms like Facebook, Instagram, and YouTube among others.

“Social commerce is expected to grow 10x by 2030 to a $55 Billion market in India. It is particularly strong in Tier 2 and Tier 3 cities with a focus on affordable products, particularly in the fashion and home improvement space,” said Anand Ramanathan, Partner, Consumer Industry Leader, Consulting, Deloitte India.

Director of Influencer Content at influencer marketing agency BarCode, Sonia Sarashetti seconded the stance.

“It is gaining tremendous popularity amongst direct-to-consumer (D2C) brands across the luxury, retail and tech-gadgets industry. The social commerce spends have increased over 35-40 per cent QoQ (quarter-on-quarter) since the last 2 financial years.”.

It is a scalable long-term business channel, the internet and social media are here to stay and this will too, said Divija Bhasin, founder of a mental health organisation and a silver-jewellery business.

“Both my businesses (@thefriendlycouch & @this.is.kinda.lit) are completely online- social media based. I use Instagram primarily to grow my community and business,” she said.

What makes people shop via social media is the convenience and ease with which they can browse through things, she said, it doesn’t feel like shopping as it’s part of an entertainment app and sometimes they can just plan an order through the app itself without having to go to a specific website.

Founder of Adizya, a D2C ethnic wear brand on Instagram, Charu Khanijau, believes that the buying behaviour of consumers has drastically changed past COVID-19.

“Few categories like fashion were always preferred through physical stores. Post Covid, customers have started trusting the quality of homegrown brands either directly or through e-commerce websites,” she said.

Khanijau added that social commerce contributes majorly to her homegrown business.

“We extensively work on Instagram which brings almost 80 per cent of our overall revenues. Our positioning of mass premium has ensured that more than 40 per cent of the orders are coming from Tier 2 and Tier 3 cities.”

Brands use a mix of tools like influencer marketing, paid partnerships, visually appealing content creation, and giveaways to drive sales and increase brand visibility.

“In interaction with our customers, the authenticity of a brand is still the biggest issue that affects consumer’s buying patterns,” she said.

Trust plays a pivotal role in holding an Indian consumer from shopping on digital platforms, Sarashetti said.

There is a growing concern about the balance between truthful marketing and influencer popularity on social media. While influencers play a significant role in shaping consumer behaviour and preferences, there have been instances where the pursuit of popularity and monetization has overshadowed ethical considerations, she added.

“Some influencers may prioritize creating content that attracts attention and engagement over conveying accurate information or promoting genuine products. This can lead to issues such as misleading advertising, exaggerated claims, or undisclosed sponsorships, which can erode consumer trust and harm brand reputation.”

The rise of synthetic content generated by AI has intensified consumer concerns on social media, adding to the challenges of maintaining authenticity and trust. Google-owned online video platform YouTube has asked its creators to label synthetic and AI-generated content, in an effort towards supporting responsible AI innovation.

In India, the Central Consumer Protection Authority (CCPA) regulates matters related to unfair trade practices and false or misleading advertisements under the Consumer Protection Act, 2019. The act defines “endorsement” and “unfair trade practice” and imposes penalties for violations. Influencers are required to disclose any material connection with advertisers and ensure that their endorsements are honest and unbiased.

The Advertising Standards Council of India (ASCI) also regulates advertising and influencer marketing in India, with guidelines for clear disclosure of promotional content and due diligence for product claims. The government has released guidelines for social media influencers, which could impose penalties for false advertisements.

The ability to certify the quality of the products sold along with curating credible reviews will be a critical success factor for these businesses to scale as they largely deal with unbranded products that sell through the power of word of mouth and social networks, Ramanathan said.

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