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E-commerce has been a much-discussed topic in India and the same can be said for social media. While the former has been around for at least one and a half decades, the latter has been the phenomenon that’s taken the country by storm in the last five years. In terms of users, social media has definitely overtaken e-commerce users in India but this doesn’t mean that one cannot help the other. Social media is all about conversations and conversations have always been known to drive commerce as there is no better sales pitch than the word-of-mouth. So, let us look at how social media can impact an e-commerce business…

E-commerce in India
Firstly, let us understand the e-commerce market in the Indian context. E-commerce is on its way in India if the recent report by IAMAI is to be believed. According to the report, the online commerce industry clocked Rs.19,688 crore by year-end 2009, which increased to an estimated Rs.31,598 crore in 2010. The projected growth, according to the report, is a whopping 47 percent and hence, by the end of 2011, e-commerce is expected to touch Rs.46,520 crore.

E-commerce in India is dominated by travel ticketing, with over 80 percent of sales falling in this category. The rest 20 percent is made up of e-tailing or e-shopping, digital downloads, financial services and online classifieds.
So, as one can make out, ‘non travel-based e-commerce’ is fairly small in India. Before discussing e-commerce further, let us look at social media in India.

Social media in India
Social media in India is led by large platforms like Facebook which has 22 million (approx) users followed by LinkedIn which has 8 million (approx) users and Twitter which has 5 million (approx) users. There is Orkut too, which boasts of 18 million users but, as most would know, it’s on its way down when it comes to being ‘cool’ among users. Now, the above numbers cannot be ignored if you are an e-commerce play in India as this number widely includes SEC A, metro and city-based users who have credit/debit cards and use these freely on travel and ticketing sites for flights and movie tickets.

E-commerce successes in India
Coming back to e-commerce, one can clearly see that deals and discounts based e-commerce work in India. Two examples are e-commerce sites fashionandyou.com and snapdeal.com. While one provides international brands at discounted prices, the other provides lifestyle discounts on spas, salons, restaurants etc. Both sites have raised funding from investors. SnapDeal raised Rs.45 crore from IndoUS and Nexus Venture Partners while fashionandyou secured RS.36 crore from Sequoia Capital India. Both sites have also leveraged social media in a big way since their inception.

Social media and e-commerce: A perfect match?
Fashionandyou has over 6.45 lakh fans on Facebook and Snapdeal has over 2.7 lakh fans across its city pages. On Twitter too, these brands constantly engage with followers and provide up-to-date details on new deals. Earlier, e-commerce sites like these would have to buy media on Yahoo and Rediff to popularize themselves and drive sales or discount buys. But now they can simply disseminate this information freely from social media sites like Facebook and Twitter.

Globally, social media is known to drive sales through e-commerce. Dell, which sells laptops and accessories, claimed in 2009 that it had sold products over Rs.29.2 crore purely via its Twitter account @delloutlet. Even in India, the number would be quite encouraging, given how many fans the above two young e-commerce sites have on social media.

According to a study by Eventbrite (an online ticketing site), a like on an event that is posted on Facebook draws more on ticket sales than each tweet on the same event. Though this is a global study, it’s surely indicative of how Facebook seems to drive more revenue in commerce than Twitter. This could also be because Facebook is a connections of friends who ‘know’ and ‘trust’ you and your links shared, while Twtter is seemingly a network of followers who may have never met you but are interested in what you tweet.
All in all, both Facebook and Twitter seem great starting points in social media for e-commerce sites to drive sales.

Beyond Facebook and Twitter
The other opportunities for e-commerce sites include blogs and bloggers that can be engaged via contests or exclusive memberships. Review sites which would check out your e-commerce portal for good services and platforms like LinkedIn where you can share the new deals on your e-commerce sites via your status update to your network.

There are certain new-age platforms like Quora too, which fall into a similar category like Yahoo answers. Here, you can build a following by answering e-commerce-related queries.

Social media provide ample opportunities for e-commerce players to spread the word on their products. The things to keep in mind are these:
1) Don’t spam your site on these networks; then you will be banned
2) Find a USP and sell the same or find a niche you can own. For eg. fashionandyou provides international brands at an 80 percent discount and is largely targeted towards women
3) Build the network where you see results. Through Google analytics, you can easily track your website visitors and see which social site they are coming to you from. In case a specific tool is not giving you results over a 3-6 month period, then you can drop it from your list of to-do’s.
4) Finally, ensure that you interact first and then sell. Pure sales will come across as pushy and desperate. It’s important that you initiate conversations that further drive users to buy as that is the only way you can scale on social media.

©Entrepreneur May 2011

Rajiv Dingra is the Founder and CEO of WATConsult, a social media agency. He also founded WATBlog.com, a leading digital media blog.

Tags:
@delloutlet, business, E-Commerce, eventbrite, Facebook, fashionandyou.com, Google, IAMAI, IndoUS, LinkedIn, Money, Nexus Venture Partners, opportunity, Rajiv Dingra, SEC A, sequia capital India, snapdeal.com, social media, travel ticketing, Twitter, WATBlog.com, WATConsult