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Amazon is betting big on social commerce, which is the use of social network communities to drive e-commerce sales. Social commerce is expected to be about a $70 billion market opportunity in the next few years, according to analysts.
The e-commerce giant on Friday said that it has acquired homegrown women-focused social commerce startup GlowRoad for an undisclosed sum.
In a statement, the company said the acquisition will help it meet the commitment to digitise 10 million local Indian businesses by 2025.
“Amazon continues to explore new ways to digitize India and delight customers, micro- entrepreneurs and sellers and bringing GlowRoad onboard is a key step in this direction,” said an Amazon spokesperson. “Together with GlowRoad, Amazon will help accelerate entrepreneurship among millions of creators, homemakers, students, and small sellers from across the country.”
The e-commerce giant has invested over $6.5 billion in its India operations and is facing tough competition from Reliance's JioMart, Walmart-owned Flipkart and Tata-owned BigBasket. The acquisition would help Amazon to compete with Flipkart’s Shopsy platform and other social commerce firms and startups such as SoftBank-backed Meesho, DealShare, BulBul, Mall91, and simsim (which was acquired by Google’s video streaming platform YouTube).
“This acquisition will complement GlowRoad’s already loved service with Amazon’s technology, infrastructure, and digital payments capabilities, bringing more efficiency and cost-saving for everyone,” said the Amazon spokesperson.
Founded in 2017 by Dr Sonal Verma, Kunal Sinha, and Shekhar Sahu, along with Nitesh Pant and Nilesh Padariya, GlowRoad is a social commerce platform that lets users resell products directly from manufacturers and suppliers through social media apps like Facebook, Instagram and WhatsApp. The firm which is backed by investors such as Accel Partners, CDH China, Korea Investment Partners, and Vertex has built a network of over 6 million resellers. The network includes 20,000 suppliers, 18 million buyers and 2,000 cities.
GlowRoad gives users access to a virtual shop, millions of products from suppliers, payments and shipping facilities thereby removing the hassles of starting an online business.
Social commerce is expected to be about a $70 billion market opportunity in the next few years, according to analysts. They said digitally connected Indians spend an average of three hours per day online, of which more than two hours are consumed by messaging, social media networking, and watching videos. Millions of small retailers are finding innovative ways to sell directly to consumers through a variety of social formats, ranging from conversational commerce on chat platforms to video-led commerce to a vibrant social reseller community.
Amazon’s chief rival Flipkart is already making huge inroads in the social commerce market through its platform Shopsy, an app that enables Indians to start their online businesses without any investment. Shopsy which was launched in July last year is expecting to touch 100 million users this year, as it eyes to become the largest such platform in the country. The Covid-19 pandemic has accelerated the shift to e-commerce, and more consumers are shopping online at a higher frequency on Flipkart’s Shopsy platform.
Walmart-owned Flipkart has more than 350 million registered users in the country. Today 70 per cent of Flipkart’s customers come from tier-2 and 3 cities. With Shopsy, Flipkart aims to scale this to 90 per cent.
In December 2021, Shopsy forayed into the grocery category with a focus on community buying e-grocery purchases offering users a flat 5 per cent commission margin. Grocery on Shopsy spans over 6,000 products across 230 categories - ranging from staples, FMCG, and other dry grocery servicing over 5,800 pin codes across 700 cities. Flipkart is working on bringing in more gamified experiences on Shopsy to engage with the customers. It is bringing innovative ad experiences both for brands and sellers. Shopsy recently topped the charts with over 30 million downloads. Shopsy has over 250,000 sellers on the platform who provide 150 million products across over 250 categories. With Shopsy, Flipkart aims to enable over 25 million online entrepreneurs by 2023 as they reap the benefits of digital commerce.
Amazon also has to compete with SoftBank-backed Meesho, which aims to enable 100 million small businesses, including individual entrepreneurs, to succeed online. The Meesho marketplace provides small businesses, which includes SMBs, MSMEs and individual entrepreneurs, access to millions of customers, selection from over 700 categories. This is done pan-India logistics, payment services and customer support capabilities to efficiently run their businesses on the Meesho ecosystem.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
