Walmart-owned homegrown e-commerce company Flipkart has forayed into the social commerce space, intensifying the competition in the market that is set to become a USD 60–70 billion opportunity by 2030.
The Bengaluru-based firm has rolled out a separate platform for social commerce called Shopsy, which will compete with startups like SoftBank-backed Meesho, InMobi-owned Shop101, Korea Investment Partners-backed GlowRoad, and CityMall, which recently raised funding from General Catalyst and Jungle Ventures, among others.
Shopsy “will enable Indians to start their online businesses without any investment,” Flipkart said in a statement on Thursday, adding “it aims to enable over 25 million online entrepreneurs by 2023” and “reap the benefits of digital commerce.”
Users of Shopsy will be able to share catalogs of 150 million products offered by Flipkart sellers, ranging across fashion, beauty, mobile, electronics, and home, with potential customers through social media and messaging apps such as WhatsApp, placing orders on their behalf and earning commissions on the transactions, it added. Once the user gets an order and places it on Shopsy, it will be delivered by Flipkart.
The commission percentage will vary depending on the category of products being ordered. While the platform will be free for individuals and small businesses re-selling on it, Flipkart’s sellers on Shopsy will pay the usual marketplace fee.
Prakash Sikaria, senior vice-president for growth and monetization at Flipkart, told local media Economic Times that the platform will also help resellers set up their own websites in the future.
“The pandemic has induced a structural shift in the way entrepreneurs conduct business, consumers shop and persuaded many small and micro businesses to adopt digital commerce to remain profitable,” said the company. “This has also created a huge opportunity for innovative e-commerce models that help these businesses become digital brands, catering to pan India customer bases.”
According to a recent report by Bain & Company and Sequoia India, social commerce, which is a USD 1.5–2 billion market today and will likely hit USD 20 billion by 2025 and USD 70 billion by 2030, has the ability to empower more than 40 million small entrepreneurs across India.
“India’s e-commerce sector has traditionally been dominated by a few large players, but social commerce is paving the way for a more distributed model that’s built on community, connection, and trust,” the report noted. “While traditional e-commerce will continue to grow, social-led models will help redefine the landscape over the next five to ten years.”
“In short, India’s social commerce sector will be twice the size of the current e-commerce market within ten years,” it added.
Since 2018, India has seen a rise in the usage of social commerce platforms. As the e-commerce sector has largely been conquered by Flipkart and Amazon India, these startups are scripting a new wave of online commerce, primarily targeting the next 500 million netizens from smaller cities.
Although the social commerce startups in the country were greatly impacted when the COVID-19 pandemic hit last year, they started seeing things pick up in late 2020. Earlier this year, the emerging sector got a huge boost when Meesho raised USD 300 million at a USD 2.1 billion valuation in a round led by SoftBank and when adtech firm InMobi acquired Shop101. With more investors eyeing social commerce platforms and Flipkart entering this space, things are likely to heat up over the next six to 12 months.