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.
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.