Chennai: Social commerce may see emergence of the next set of unicorns as several start-ups are reaching out to 200 million-strong social media user base. The new entities have also started grabbing attention of venture capital firms.
Compared to e-commerce which has a user base of 90 million, social commerce has greater access to the larger vernacular audience of over 200 million, who are active on WhatsApp, Facebook or other social media sites. As per the estimates of RedSeer Consulting, social commerce is a disruptive model which is expected to double every year between 2018 and 2022.
Venture Capital funds have already identified this potential and have started funding social commerce start-ups. Mall91 recently raised $7.5 million in its Series A round of funding led by Go-Ventures. Beenext, Kalaari Capital and AngelList India also participated in the funding round.
CityMall, a vernacular social e-commerce platform, received funding from a clutch of angel investors, including Jitendra Gupta of Citrus Pay, Alvin Tse of Xiaomi, Manish Vij and Harish Bahl from Smile Group, Rishab Malik, ex-co-founder of Droom, Rajesh Sawhney of GSF and M&S Partners. Bulbul, a live social commerce app, raised $5 million in a round that was led by Sequoia. Dealshare raised $11 million in two investment rounds led by Matrix Partners and Falcon Edge and participated by DST Global and Omidyar Network.
“Social commerce sites are able to reach out to the remotest villages where e-commerce has not ventured into. We get orders from Naujheel in Uttar Pradesh, Sandhi in Madhya Pradesh, Chhapra in Bihar and Sikar in Rajastan. More than 90 per cent of our customers are from tier II cities and beyond. The sellers too are from these cities and towns. The content is shared through the social media sites and thus we are able to build trust within user groups,” said Nitin Gupta, CEO and co-founder of Mall91.
Payments, he said, are done through Google Pay or Paytm or customers opt for cash on delivery.
