Wooing shoppers the Woovly way!
Role of influencers in Social Commerce Gen Z and millennial users, the target audience for social commerce, have reduced attention spans and look for instant gratification with short-form content
While the pandemic has caused unforeseen damage to both businesses and industry, it has led entrepreneurs to innovate and develop new business ideas and problems to solve. Perhaps one of the most significant positive outcomes in the last two years is the acknowledgment by the Indian industry of the needs and aspirations of the youth living in the heartland of India, the Tier II, and Tier II towns. Social commerce has emerged on the scene at the right time to address this demand. More and more Indians are becoming connected to the internet, especially the untapped second and third-tier towns and cities, and social media and digital video content are their outlets. They have started consuming content that would give them a wholesome shopping and entertaining experience. This also influenced Gen Z and millennials, channeling their consumer preference towards more customized products. Social commerce is solving this need by providing “shoptainment” for such audiences with specific demands and lifestyle aspirations.
How big is this opportunity?
India has more than 932 million internet users, expected to grow to 1.3 billion by 2030. On average, Indian users spend about 4.7 hours per day on the internet using their smartphones. More than 305 million Indian users are transacting online due to low data costs ($0.68 per GB) and easy online payments due to UPI, which recently reported more than 98 billion transactions as of May 2022. This signifies a considerable market opportunity for eCommerce and social commerce players. During the pandemic, while this sector saw growth due to safety and convenience concerns, it is now accelerating due to the lifestyle aspirations and higher disposable incomes of the youth living in Bharat. Powered by many such favorable factors, social commerce is expected to grow by 71.5% annually to touch US$ 8,258.8 million this year.
The Woovly difference
Among the emerging leaders in this space is Woovly, a lifestyle social commerce platform for Indian millennials from Bharat that has taken rapid strides to drive the growth of video commerce/Influencer-led commerce in India. A significant chunk of their revenue is from micro and nano influencers. These short video content creators have their own set of loyal followers, and when they create short-form, brand-tagged content, their community watches and wishlist products. They go on to watch more related and similar videos and ultimately buy the products by clicking on the tags. Each creator earns money for every transaction that originates from video content on Woovly’s platform. Therefore, the cost is indirect and aligned to Woovly’s earnings. Woovly’s creator-driven model, along with the fact that it’s a marketplace, has paved the way for a positive CM2 (Contribution Margin), a foundation for eventually breaking even. No eCommerce/social commerce company in India has achieved this at such a fast pace.
Co-founder and CEO J. Venkat elaborates, “Our belief in organic user acquisition has held us in good stead. We have negligible acquisition costs in a world of eCommerce companies spending thousands per SKU to create content for user acquisition. Our content creators and users are our brand ambassadors and advocates”.
Role of influencers in Social Commerce
Gen Z and millennial users, the target audience for social commerce, have reduced attention spans and look for instant gratification with short-form content. This is where micro and nano content creators and their short-form content have created an enormous impact. There is a latent desire to form close-knit and robust communities, especially in the smaller suburban centers. There is also a greater emphasis on original content, and users prefer discovering it on their own rather than being fed curated content. This mutual trust between creators and their communities is a huge factor that drives social commerce. Buyers look for authentic and relatable content from creators they can identify with and trust for their expertise.
What lies in the future?
While social media and social commerce are both growing at a rapid pace, buoyed by a favorable business environment, for sustainable growth in the future, companies need to have good business metrics. If user acquisition costs remain high, growth will remain skewed. This is where healthy unit economics, high standards in quality, innovative brands and product tie-ups, and a tight leash on costs will be key differentiators. As Woovly Cofounder Neha Suyal puts into perspective, “Today, the millennial user demands a high degree of personalization and is heavily influenced by peers and social media. It is easy to go overboard in trying to acquire such customers. However, burning cash at a high rate is not sustainable. 50% of our users are organically acquired, and this is how we want to keep it, for an accelerated, yet sustainable, growth.”