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Vidit Aatrey, the young founder of social commerce platform Meesho, wears success lightly on his sleeve. Last month, Meesho, which connects manufacturers with resellers marketing products to consumers through social media platforms such as WhatsApp and Facebook, gained unicorn status after raising $300 million in a new funding round led by Japan’s SoftBank Group Corp.

When asked what changes when you become a unicorn, he replied: “Nothing… the only thing with pit stops is when you get to one, you start seeing the next one. Becoming a unicorn is just another reason to celebrate internally."

However, not just Meesho, but several other social commerce companies should actually be in a celebratory mood given the strides that social selling is taking in India. A recent report by Jefferies said social commerce is set to become mainstream in the country. Currently, the segment is still small at $1.5-2 billion.

Aatrey said if by “mainstream", Jefferies means achieving scale like e-commerce, he has no doubt about the future of social commerce. And, there are several reasons for its growth.

For starters, conventional e-commerce has worked really well for larger cities and the first 100 million people it brought to the internet. “But I don’t believe that is the model that will scale for the next billion users," he said.

E-commerce platforms cannot touch a billion people unless they address the market that buys unbranded products and serves unorganized retail. Meesho works for small-town buyers who are not so active on such platforms by offering them unbranded products across categories.

Pulkit Agrawal, co-founder of Trell, a lifestyle social commerce platform, also believes that small towns will drive growth for social commerce. Shopping in India is a social phenomenon where people take friends and family to shop in a predominantly offline space, he said. That holistic experience of offline is missing in e-commerce, he added. So, social commerce will proliferate as consumers can connect directly with the seller or salesperson, communicate and make an informed decision. Trell, which boasts of 45 million monthly active users, sells beauty and personal care items through influencers who recommend products.

What’s also driving social commerce is the ready infrastructure that e-commerce growth has already enabled—be it internet penetration, payment gateways or logistics partners.

The Jefferies report identified different shopping experiences via social commerce such as group purchase, wherein consumers come together to buy in bulk to get a better price, or social reselling, where resellers buy from large merchants and sell on platforms such as Mee-sho. It lists video-based commerce, too—much like Trell, which uses videos to create awareness and influencers to advise on products.

Meanwhile, Kiko TV—a newly launched live-streaming social e-commerce platform—enables customers to step into a virtual store and interact with as well as receive assistance from sellers. Its pilot launched in Mumbai with 50 stores got upended by the second wave of the pandemic. It is currently working with 30 stores, said its founder Shivam Varshney.

According to an earlier report by Bain and Co. and Sequoia India, social commerce is set to touch $16-20 billion in gross merchandise value over the next five years. Yet, the promise of growth is not without challenges. The biggest being outdated government regulations. “Small or individual businesses cannot sell online if they are not GST registered, maintain and file GST returns. Besides, we see millions of women who want to sell online, but can’t owing to such rules. Small businesses will continue to struggle as a result," said Aatrey.

Agrawal said the business also needs more mature supply chains much like e-commerce.

Trell, which has raised $17 million so far, sees social commerce being populated by direct-to-consumer brands initially as they are internet savvy and nimble. However, both Agrawal and Aatrey expect larger, traditional brands to also jump on as they chase consumers.

While Trell plans to expand its offerings to include home care and apparel on its platform, Aatrey said to bring the very low-income group online, companies will have to focus on groceries. Meesho is doing just that with Farmiso—an affordable grocery commerce model recently launched in the small towns of Karnataka.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pre-ssing issues related to all three. Or just fun stuff.

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