Social commerce in India could touch $7B by 2025: RedSeer

Social commerce in the country is poised to touch up to $7 billion (around Rs 51,703 crore) in GMV by 2025 as the number of online shoppers - especially from Tier II cities and beyond - continues to rise, a report by RedSeer Consulting said on Tuesday.

Social commerce refers to ecommerce transactions where buyers and sellers have more direct connection with each other before concluding a purchase, compared to traditional ecommerce where buyers are choosing by searching or browsing from a digital catalogue.

This report on social commerce included platforms like Meesho but excluded peer-to-peer transactions through social media and online messengers.

RedSeer said social commerce will grow to a large share of India's ecommerce market over 2020-25, growing from 1-2 percent of the $38 billion market in 2020 (translating to $0.38-0.76 billion) to 4-5 percent of the forecasted $140 billion ecommerce market in 2025.

This would mean the social commerce segment could be between $5.6-7 billion in GMV by 2025. GMV is a term used in online retailing to indicate the gross merchandise value of the products sold through the marketplace over a certain period of time.

"Social commerce is inherently focused on solving the trust issues of the next wave of online shoppers- as reflected in its high share of Tier II-plus city consumers. We expect that a significant chunk of India's over 250 million online shoppers of 2022 and beyond will be very comfortable with social commerce and this model will play a key role in extending ecommerce to the masses," RedSeer Consulting Director Mrigank Gutgutia told PTI.

ALSO READ

Social commerce has the potential to touch revenues of $60-70B by 2030: Bain and Sequoia report

In parallel, social commerce players are creating and are expected to further create immense employment opportunities for resellers and suppliers on their platform, he added.

"As a result of this two-sided value creation, we expect that social commerce players would grow to 5 percent of India's $140 billion ecommerce market in the next five years, growing at a massive 65 percent-plus CAGR. And, the initial results of social commerce's growth are already visible - with a large social commerce player already being in the top five ecommerce players in India," he said.

The report noted that there had been a 3X year-on-year growth in September 2020 in terms of gross GMV.

For social commerce players, 20 percent of customers are estimated to be from metros, 25 percent from Tier I cities, and the remaining from Tier II cities and beyond.