Social Commerce and Buying Behavior in India

Social Media and User Generated Content led commerce

Social media has become the prominent way to discover and engage with brands in India. These platforms encourage social interaction, users contribute through reviews, referrals and recommendations to assist in buying products and services.

The explosion of video content and consumption has led to a shift in the way consumers discover, gather information and make purchase decision. Higher the price of the product, more features to consider, video is the way to go.

90% of car buyers research online before visiting dealership and a whopping 80% buyers watched videos online for gathering information, as per Google’s, A Year in Search report.

Based on the survey that I conducted for research on influence on buying decision on a group, here’s what I found,

• 100% of respondents said they look for online reviews before purchasing online
• Majority of them go through 2–5 sources, YouTube being the prominent source to gather information or reviews based on type of purchase.
• They also highly trust online reviews of others

But still 75% of respondents said that their family and friends, influence their buying decision the most.

People usually discover new products and services through YouTube, Facebook and Instagram and other social platforms, few may try them directly but majority of them rely on experience of others, especially friends and family to make a decision.

People often see through pushy tactics and ever increasing influencers who lack the skills of persuasion to influence the buying decision of products and services.

The e-commerce and listing sites provide rating and reviews on all their listings and are helpful, but a recent survey has shown that more than half of Indian buyers believe that there is a positive bias in ratings and reviews posted on these websites.

Also, there have been several reports of sellers purchasing reviews and ratings.

The government has also taken measures to protect the consumers interest with respect to fake reviews and ratings. The e-Commerce national draft policy directs that,

There should be transparency and non-discrimination in publishing of ratings and reviews. All ratings and reviews for verified purchases must be published as registered by the consumer, except those found to be promotional, abusive or inappropriate in a community setting.

Marketplaces are required to devise mechanisms to prevent fraudulent reviews and ratings by the sellers and their affiliates

Fake reviews and ratings and lack of trust has led shoppers to look for other platforms with more trustworthy content, a social platform with community and ultimately relying on friends and family.

The social behavior of reliance on family and friends for buying decisions can be easily seen in our families, social groups and even in our WhatsApp chats.

Influencing purchase decision with Influencers and online reviews is less effective when compared to intimate social groups and therefore we are seeing companies leveraging WhatsApp, groups in social media to entice customers.

There have been several startups that attracted investments in the ‘Social Commerce’ space in India recently, banking on social-led e-commerce models and video content. Mainly Meesho, first Facebook investment in India, that turns users into resellers leveraging WhatsApp and Facebook, tapping into the community and trust aspect of social commerce. Bulbul TV a live video shopping app, a concept which is highly popular in China among shoppers which has seen tremendous growth leveraging video content.

China’s social commerce sector has accounted for 14% of online retail sales that served more than 300 million people in 2018 and is expected to grow at a rapid pace.

Based on the shift in discovery, evaluation and purchase behaviors among Indian consumers, we will definitely see more startups in India coming up with social-led commerce models that will serve various demographic segments centered around social groups, video content and influencers.

Social Commerce can be touted to be the next big wave in commerce that will change the way how companies target users and how people make purchase decisions.

Sources:

• Google, Year in Search Report: India
• The Rising Tide of Social Commerce — and Why China is Leading It
• LocalCircles, Ecommerce Ratings & Reviews: 62% consumers say they find a positive bias in them; 47% say their negative review was not published
• Draft National e-Commerce Policy