DealShare helps India’s lesser-known cos gain clout

A billion-dollar idea

Jaipur-based Somani Industries wanted to make its Maharaja detergent label popular outside Rajasthan, after years of it being a household name there.

Business was good, said Vaibhav Somani, a partner at the firm. But it could have been better.

About 350 km away, Bikaner-based snackmaker Shree Ram Papads Pvt Ltd was in the same boat.

It wanted to find new takers for everything from bhujiya to boondi in its existing markets Rajasthan, Bihar, Haryana, Jharkhand, Odisha and West Bengal.

Enter the social commerce model of doing business, which is simply the use of social network communities to drive e-commerce sales, and both companies’ products ended up in more households than before.

“In Rajasthan, alone, our market share grew by 50%,” said Arun Kumar, the marketing director of Shree Ram Papads. Maharaja’s products too saw a 25% growth in business.

Both companies credit social commerce startup DealShare for their business growth. The startup, which joined the Unicorn club this year, provides an online platform for buyers and resellers from primarily the rural and non-metro markets to come together and do commerce using a ‘WhatsApp-first’ approach.

It competes with Meesho and Flipkart’s Shopsy.

Social commerce startups leverage platforms such as WhatsApp, Instagram, Twitter and Facebook for the direct buying and selling of goods. It is different from traditional e-commerce via Amazon or Flipkart in the sense that it relies heavily on social media platforms to market the goods that are being offered on sale.

In just one day in October 2021, two of China’s top livestreamers, Li Jiaqi and Viya, sold goods worth $3 billion, according to Accenture’s ‘Why the future of shopping is set for a social revolution’ report. “That’s roughly three times Amazon’s average daily sales,” the report added.

This shows the immense potential that social commerce holds in emerging economies such as India and Brazil. With 70 crore internet users, the Indian online shopper base is only behind China and the US. In fact, while the pandemic period saw India’s retail market shrink by 5%, its online retail market grew 25%, a Bain & Company report showed.

DealShare co-founder and chief executive officer Vineet Rao expects social media platforms, and not the traditional e-commerce channels, to drive the adoption of online shopping among the mass market of India which is based in villages, smaller towns and non-metro cities.

Other stakeholders agreed.

“It is a case of India vs Bharat. The use of smartphones and social media is very different in many ways,” said Ajay Ramasubramaniam, founder & chief executive officer of Startup Reseau, an accelerator that helps startups scale globally.

In fact, platforms such as Telegram, Facebook, and WhatsApp were being used for social commerce even before they were actually enabled with features to buy/sell within the app, added Ramasubramaniam.

“The first wave of internet users came from laptops and desktops using browsers as the interface. But the second wave of internet users - the mass-market population especially in the emerging countries like China and India - have come online on the mobile by using social (platforms), like WhatsApp, as their first interface,” said Rao, highlighting how most firms would have to reimagine themselves with social platforms being a key part of their strategy.

And, technology will play a key role here.

“The tech needs to be suitable to make it a viable social commerce model. It also needs to be navigable for someone who is not tech-savvy,” said Sourjyendu Medda, co-founder & chief commercial officer, DealShare.

Word of mouth on steroids

To build a sustainable commerce model that runs organically via social media platforms, trust, community-building and personalisation are some of the top requisites, according to an EY report on how social commerce is helping Indians move from interaction to transaction.

DealShare, which has its presence in 100 cities today, started laying the foundation to build this community on WhatsApp friends and family groups.

Social platforms remain at the centre of DealShare’s premise since they very closely simulate or mimic the way natural conversations take place.

“It is word of mouth on steroids,” TikTok general manager Sandie Hawkins said about social commerce, according to an Accenture report. Since the social commerce model runs on the organic virality of deals being shared on social media platforms, this can drastically reduce the cost of getting new orders. “But the relevance has to be very high,” said Medda. Unlike other e-commerce players who rely on top brands, the social commerce players cannot afford to do so since the rural markets are extremely price-sensitive.

Players like DealShare “aggregate lesser-known but good quality products from local spaces and, as a result, manufacturers end up making more money,” said Rao. For the consumer, too, it is more affordable since the middle-men are minimised in this model and logistics are being taken care of by the social commerce platform.

The ability to establish a big brand is very fast on this platform since the focus is on selling high quality but not so well-known brands.

Somani Industries, which once saw their cleaning essentials as a household name in Rajasthan alone, now also counts Delhi, Ghaziabad, Indore and Faridabad as its markets. “This has happened without us incurring any additional marketing expenses,” Somani said.

Social commerce startups will have to bring their A-game while managing logistics and the supply chain, and build the right tech for the non-tech savvy to keep growing.

“Anything that is consumer internet requires superior customer experience and it gets measured in several ways right from options available, delivery times, quality, return policies, ease of buying, incentives & offers etc. Retail is broken in emerging markets, and digital can bridge that gap seamlessly. However, with scale comes challenges, and social commerce will face that too,” said Ramasubramaniam.