It’s no news that in recent years China and India have blossomed from developing countries, into formidable forces in the business-world. As these countries flourish in terms of both economics and technology, so do the conditions for a healthy e-commerce market-more specifically, a healthy social commerce market. In fact in just a few years, the Social Commerce Market in India and China has grown to an almost US $3 billion industry. But will these regions’ lack of infrastructure and overall strategy for social media based buy-and-sell platforms hinder the market’s ultimate success? Not if key social commerce vendors are quick to capitalize on a few major emerging trends.
First, let’s take a look at the current foundation of exactly what is social commerce; the factors that have been driving it forward in India and China up to this point; and the potential hindrances lying on the market’s horizon.
The question of ”what is social commerce?” can be best outlined in the following way:
The rising success of each of these individual segments in China and India is thanks to a number of drivers including increased adoption of Social Media; increasing Social Engagement; increasing Penetration of the Internet; and changing Consumer Lifestyles.
So what’s there to hold the market back then? Well, let’s break down two of the key hindrances currently facing social commerce vendors in China and India.
To start, are the issues of ROI measurement.
Decision makers in many organizations are not sure how to measure the return from social media investments. Measurement of ROI becomes a difficult task for marketers because social commerce is a broad term including all kinds of social interaction to support social shopping in the present or a future time period.
Next, we have an overall social commerce infrastructure that is still fairly shaky-especially in terms of an integrated social strategy.
In order to link social commerce with enterprise marketing, enterprises need to develop an integrated social strategy. Specifically, they are required to understand the benefits of social media and social commerce that could have a positive effect on the way enterprises perform marketing and communication with consumers. However, social commerce vendors in India and China have not yet been able to develop such an integrated strategy that can identify the market benefits attached to social media and react to them.
So what’s next then?
We at TechNavio are optimistic that the effect of these challenges will be negated to a certain extent by the presence of these emerging trends:
- Increased penetration of smartphones and tablets
- Extensive adoption in non-metro cities
- Growing demand for lifestyle products
- Entry of foreign players
The above trends have the potential to change the market dynamics in terms of size, vendor-to-end-user dynamic, and overall infrastructure. It’s also likely that they’ll contribute to a dramatic increase in the general customer-base across China and India, which will offset the business that is being lost due to the previously mentioned challenges until they’re ironed out, allowing for full market saturation.
At the end of the day, we’re confident that although the Social Commerce Market in India and China has a long way to go, this distance is trivial in comparison to the market’s massive potential for growth. After all, we’ve already seen the industry’s value explode into a multi-billion range in just a few years. With a few years more, it’s safe to bet that the market will be hovering over the US $ 10 billion line by 2016, with plenty of room for even more growth in the future.
For more information, view our 2012-2016 market research report on the Social Commerce Market in India and China.
