The Future of Retail: Social Commerce in India and Southeast Asia
Introduction
Social commerce is revolutionizing the retail landscape in India and Southeast Asia, empowering small entrepreneurs and reaching untapped markets. This article explores the rise of social commerce, its impact on logistics, and the empowerment of micro-entrepreneurs and women. It also reveals the potential of social commerce in unlocking e-commerce for rural consumers.
The Rise of Social Commerce in Southeast Asia and India
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Social commerce combines social media and e-commerce to create a platform where community leaders, influencers, or KOLs can directly market products to their network of friends and family.
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Resellers play a crucial role in social commerce, managing the ordering and delivery of goods to customers while earning a commission on sales.
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Social commerce is already a $13 billion industry in Southeast Asia and is projected to reach $70 billion in India by 2030, empowering millions of small entrepreneurs.
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The target market for social commerce includes the next 500 million people in small towns and villages in India who are currently offline buyers with low transaction sizes.
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The key to the success of social commerce lies in its ability to reach and empower small entrepreneurs and offline buyers, thereby tapping into a segment that traditional e-commerce platforms have not effectively accessed.
Efficient Logistics Bridge in Tier Two and Three Cities
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Social commerce faces challenges when ticket sizes go down making it hard to serve consumers.
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The first element propelling social commerce is bridging the logistics gap in tier two and three cities in countries like Indonesia, Philippines, and Vietnam.
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Logistical nightmare in Indonesia and Philippines due to thousands of islands and underdeveloped supply chain infrastructure in lower tier cities.
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Lack of delivery and warehousing infrastructure exacerbates last mile delivery challenges in suburban and rural areas of countries like Vietnam.
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Inefficient supply chain or logistics lead to higher costs for the customers in tier two and three cities.
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Customers in tier two and three cities often receive products after passing through many layers of demand, leading to delays and potential dissatisfaction.
Empowering Micro-Entrepreneurs in Logistics and Social Commerce
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The supply chain in the rural east involves farmers, suppliers, wholesalers, rookers, retailers, and merchants, creating multiple layers and increasing product prices.
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Community leaders act as logistics partners, facilitating last mile delivery and ensuring product distribution to the local neighborhood.
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Startups in logistics empower micro-entrepreneurs by enabling them to manage their own network of warehouses, hubs, and delivery partners.
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Social commerce overcomes the online trust deficit by leveraging micro-entrepreneurs to spread ideas and promote sales within their local communities.
The Power of Social Commerce in Unlocking E-commerce for Rural Consumers
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Social commerce or rural commerce plays a crucial role in unlocking e-commerce for rural consumers.
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Trust and social proof are essential for deep offline buyers to transition to purchasing online.
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In rural areas, social commerce relies on social preferences within the neighborhood, where trust is built on knowing individuals well.
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Resellers in rural areas are often community leaders whose opinions carry a strong sense of validation for online purchases.
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Agents in social commerce help acquire customers within their neighborhood or social circle, playing a pivotal role in sales, marketing, customer service, and customer retention.
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Social commerce has democratized entrepreneurship, particularly for women, by bridging the entrepreneurial gap.
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Over 64 percent of rural entrepreneurs in social commerce are women, indicating a significant impact on gender equality and economic empowerment.
Empowering Women in Vietnam through Social Commerce
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More than 2,000 women in tier two and tier three cities in Vietnam have been empowered through training and mentoring programs.
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The ultimate vision is to empower millions of women in Vietnam to become micro entrepreneurs.
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Successful startups like Evermoss and Mio focus on empowering women and homemakers, increasing their monthly household income by 15 to 30 percent.
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On average, resellers earn around 40 to 50 USD per month, significantly improving their livelihood and enabling them to meet basic needs such as food, education, and health services.
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Social commerce in Vietnam is dominated by entrepreneurial startups, with competition emerging from established e-commerce players like Shopsy from Flipkart and social commerce models from Alibaba and JD.com.
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The future of retail seems to be in social commerce, presenting significant opportunities for growth and market expansion.
Conclusion
The future of retail in India and Southeast Asia is being reshaped by the transformative power of social commerce. Empowering small entrepreneurs, overcoming logistical challenges, and democratizing entrepreneurship for women, social commerce presents significant opportunities for growth and market expansion. The rise of social commerce signals a new era in retail, unlocking the potential of untapped markets and transforming rural e-commerce.