Shopping through online channels, including e-commerce platforms and social networks, is projected to grow significantly over the next five years in India. With millions of new shoppers expected to turn to online channels and make frequent purchases, new-age businesses are leveraging WhatsApp and its conversational commerce capabilities to build brand loyalty and drive sales growth.
In H2 2022, Reliance Retail-owned JioMart entered into a strategic collaboration with WhatsApp, enabling users to make purchases directly from the instant messaging app. The alliance has enabled JioMart to experience a strong order volume in India. JioMart, in H1 2023, revealed that the business has been experiencing a growth of 30% to 40% month on month via WhatsApp, since the launch of the partnership in 2022.
These numbers, representing the growth for JioMart, are a clear indication that WhatsApp is poised to become one of the leading sales channels for brands and businesses in India over the next five years. Going forward, PayNXT360 expects WhatsApp to forge more such alliances with new-age businesses, thereby supporting the growth of the social commerce market in the country.
Based on PayNXT360’s estimates, the social commerce market in India is projected to grow at a compound annual growth rate (CAGR) of 23.8% from 2022 to 2028. During the forecast period, the gross merchandise value will increase from US$5.4 billion in 2023 to reach US$19.8 billion by 2028. With a nearly four times increase in gross merchandise value, the social commerce sector is projected to emerge as one of the leading growth drivers for the broader e-commerce market in India from the short to medium-term perspective.
Alongside JioMart, many other new-age brands like Myntra are also leveraging the conversational commerce capabilities of WhatsApp. Myntra, for instance, is using in-house conversational tools to push products through WhatsApp and other messaging apps to promote products and brands.
There are several reasons why many of the leading new-age brands are turning to WhatsApp to build loyalty and drive sales growth. First, WhatsApp provides businesses with a cost-efficient way to reach targeted customers directly. Second, the streamlined interface of the messaging app assists brands in reducing cart abandonment. Finally, the robust security measures implemented by WhatsApp, including end-to-end data encryption, make it a safer platform to complete transactions.
Furthermore, the platform also has an in-app payment service, making it the best channel for brands to develop a seamless shopping experience. As a result of these characteristics and features of the messaging app, PayNXT360 expects WhatsApp to emerge as the leading social commerce/conversational commerce channel in India over the next five years.
To tap into the high-growth potential of the conversational commerce sector, many more businesses are entering the market in India. GoKwik, for instance, had entered into an acquisition deal with omnichannel communications specialist Tellephant in June 2023. This acquisition is part of the firm strategy to tap into the commerce capabilities of WhatsApp.
Going forward, PayNXT360 expects more such product launches in the space, allowing businesses to tap into the high-growth potential of the conversational commerce industry in India. These product launches will also drive innovation and a competitive landscape over the next three to four years in the Indian social commerce market. The trend of conversational commerce is also projected to gain rapid momentum in other global markets from the short to medium-term perspective.
Zendesk, for instance, introduced conversational commerce capabilities in May 2023. The firm further strengthened its partnership with WhatsApp and Shopify to enhance businesses’ customer experience strategy, thereby enabling them to provide a better shopping experience.
This change in customer shopping behavior is prompting the need among brands to partner with conversational commerce providers like Zendesk. Foot Locker, for instance, entered into a strategic collaboration with Zendesk to leverage its conversational commerce capabilities with the aim of improving the shopping experience for its customers. Going forward, PayNXT360 expects an increasing number of global brands and businesses to forge such strategic partnerships. This will, therefore, keep aiding the growth of the global social commerce market from the medium to long-term perspective.
To know more and gain a deeper understanding the social commerce market in India, click here.