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Social Commerce -The Significance of Doing Online Business Through Social Media - Studies in Indian Place Names

Studies in Indian Place Names (UGC Care Journal)
                      ISSN: 2394-3114Vol-40, Special Issue-26
                      National Conference on “Multidisciplinary Research in Social
                      Sciences and Management Studies”
                      Held on 7th and 8 th February, 2020 at DYPIMS Campus.
                      Organized by: Dr.D.Y. Patil Institute of Management Studies, Akurdi,
                      Pune.

   Social Comme rce -The Significance of Doing Online Business
                     Through Social Media
                                       Mr S omnath Hadalgekar

Abstract: Social commerce is a new trends in electronics commerce that facilitate users to
buy or sell products, services, content through social media platform such as facebook,
instagram, linkedin, twitter.This study highlights on gneeral view of social networking,
summarizes the benefits of social commerce to the customer, retailer and other enterprises
and the limitations. This paper also differentiate between social commerce and ecommerce.
This paper explains how marketers can make use of social media tools for advertising.Using
word of mouth is almost free for companies, but it can be dangerous if negative comments
are there. Advertising, promotion on Facebook, LinkedIn,Pinterest, Instagram, Twitter, and
YouTube is becoming popular now days.This paper had studied different survey reports of
Nielsen and statista and concluded that the social media users were expected in 2023 be
almost 448 million, 31% of the population will use facebook.Customers can make suggestions
for improvements and they can also get attention quickly for problem resolution by social
CRM which uses social media to maintain the relationship with customer.

Keywords: E-Commerce, S-Commerce, Social Commerce, Social Media, Social Networks,
Social Media Marketing.

Introduction: Electronic Commerce (E-Commerce) is defined as the process of buying and
selling of goods (products), services and information that are made available over the
internet.According to Efraim Turban(2018), Electronic commerce (EC) refers to using the
Internet and other networks (e.g., intranets) to purchase, sell, transport, ortrade data, goods, or
services.The term commerce is describing as purchasing and selling transactions conducted
between business organizations. If we use computer networks and internet to perform
transactions between business partners then it becomes electronics commerce. E-Business is a
super set of e commerce. E-Business is not only selling and buying of products or service but
conducting all business activities online such as providing customer services, collaboration
with business partners, providing e-learning services etc.

The term social commerce was coined by Yahoo! in November 2005 which is nothing but a
set of online collaborative shopping toolsthat enables online shoppers and increases the
customer's trust in one retailer to another.The success of a SCdriveis measured by the degree
to which consumers involve with the firms marketing through retweets, likes, and shares. The
difference between social commerce and electonic commerce is that e-commerce is
purchasing and selling goods and servicesusing computer network and internet while social
commerce is nothing but shopping on internet. S-Commerce includes the usage of online
media which permits people to contribute in various activities like marketing, advertising,

P a g e | 337                                                                     Copyright ⓒ 2019Authors

Studies in Indian Place Names (UGC Care Journal)
ISSN: 2394-3114Vol-40, Special Issue-26
National Conference on “Multidisciplinary Research in Social
Sciences and Management Studies”
Held on 7th and 8 th February, 2020 at DYPIMS Campus.
Organized by: Dr.D.Y. Patil Institute of Management Studies, Akurdi,
Pune.

promotion, selling, comparing, buying and sharing of products and services in online and
offline marketplaces as well as in virtual communities.

Social commerce (SC) is also known as social business, refers to electronics commerce
transactions delivered via social media. Putting in a simplar way, social commerce is a
combination of a social media and social interation to help promote the purchasing and
selling of goods and services over the internet.Socialmedia incorporatesextensivevariety of
sites. Blogs and microblogs (e.g.Wordpress, Blogger, Twitter), social networking sites (e.g.
Facebook, Linked-in), content sharing sites (e.g. Flickr, YouTube),forums, social
bookmarking sites are all considered as social media platforms.M ore specifically, it is a
combination of e-commerce, e-marketing, the supporting technologies and social media
content business owners, marketers, advertiser now shifting their online marketing strategy to
social commerce to increase sales and brand awareness.Social commerce helps marketers
engage potential customers with their brands according to the customers social behaviors. It
also provides customers with a platform to talkabout their product or services on their portals.
Now, the range of social commerce has been expanded to include social media tools such as
customer ratings and reviews, user recommendations and referrals, forums and communities
etc. Technologies like Augmented Reality is also integrated in social commerce that allows
users to visualize attire items on themselves. Today number of users of social media sitessuch
as Facebook, Twitter and Instagram increases, most of themarketers have started to reach and
connect with customers using these platforms as an poweful channel.Social networking sites
and relevant toolsprovide ample opportunities to browse products and to get comments and
reviews provided by realusers and peers.M arketers are concentrating on engaging with
potential customers through social media platform to offer real-time interactions. Numerous
companies have made efforts to get a company position and carryout actual sales transactions
over social media platform. For example,Dell Computer claimed that ift made $6.5 million
in2 years by selling computers on Twitter. Also, generates ideas from community members at
itsIdea Storm site. Starbucks is using wide promotions on Facebookcomprisinggenerating
ideas from the employees via itsMy Starbucks Idea website. M ountain Dew drawsattention of
video game lovers and sportfans via Dewmocracy contests. The organizationtoo uses the
most devotedcommunity membersto contribute ideas. The firm used Facebook,Twitter, and
YouTube to communicate with consumersand engage them.In 2010, Target used Twitter to
encouragetheir fallfashion show in New York with videos and ads. Theshow was streamed
live on Facebook.(Turban, Whiteside, Kind &Outland, 2017, p. 16).

Objectives of the study:

 To define social commerce concept and describe elements and evlolution.
 To understand the characteristics of Social Commerce and summarize the benefits to
customer, retailers and limitations of social commerce.

 To explain how advertising and campaignsare conducted in social networking
environments and to understand the role of social commerce in Indian market.

Evolution of S ocial Commerce:

Social commerce (s-commerce) is considered as a new form of electronic commerce which
encompasses social networking systems that enable social collaboration and user
engagements. Social commerce has started with the emergence of web 2.0 technologies.Web
2.0 applications created an efficient and effective platforms for collaboration of
employees,vendors, partners, and customers. Web 2.0 is a foremost contributor to social
media.The expansion and rapid growth of mobile computing and smartphones have also
simplified s-commerce.M obilebusiness is the basis for SC models such as location-based
applications, social networks, and networking.Social commerce emerged from integration of
several fields such as Social media marketing, internet communities, web 2.0, e-commerce,
m-commerce, l-commerce, social networks, virual worlds, online multiplayer games,
internet,web, social behaviour etc.

Figure: Major roots of social commerce.
Source: Turban, Whiteside, Kind & Outland, King, Lee 2018, p. 287.

In the mid of 1990 traditional marketing activities were converted to internet marketing when
marketer started websites and using email to advertise their products to sell offline mode. As
P a g e | 339 Copyright ⓒ 2019Authors

web developed companies used internet to simplify electonic commerce transations. With the
development of social media marketing communication changed to a dialog with Internet
users.
The two major elements in social commerce, social media marketing andEnterprise 2.0, are
described below:

Social Media Marketing: It is an application of marketing communication and other
marketing tools using socialmedia.It facilitates social commerce, builds brands, repairs brand
reputation damage in social media,and fosters long-term relationships with customer and
business partner. SMM involves activities such as posting text and image updates, videos,
and and other content that drives users involvements.Social media marketing can support
with a number of objectiveslikeIncreasing website traffic, building conversions, creating
brand awareness, improving communication and interaction with potential buyer. The major
social media platforms at thistimes are Facebook, Instagram, Twitter, LinkedIn, Pinterest,
YouTube, and Snapchat.

Enterprise 2.0: It is also called as social media based enterprise. It is nothing but integration
of social media and collaborative tools of web 2.0 such as blogging, wikis, microblogging-
twitter inside the office environment. M any companies use social media for idea generation,
problem solving, joint design, and recruitment.Dell, Sony, IBM like companies using social
media and web 2.0 to generate ideas from large groups of employees, customers, and
businesspartners on how to improve their business operations. M any SM E’s uses LinkedIn
and Facebook to announce available positions andto find potential employees.
Characteristices of S ocial Commerce
 Buyer can take decision of buying by social review of other user unlike traditional e-
commerce.
 Customers can provide the feedback and recommendations of product, services used
on social media, it will help seller to get feedback of customers.
 Social commerce is one of the popular medium for content viral.
 Social commerce is integrated with m-commerce, so offers can be shared with
mobiles
 Social commerce promotes products and services through social networking websites.
 The numbers of retweets, likes, and shares are actionsof success for social
commercedrives.
 Social commerce also seeks to participateonline buyers by offering product advice
and support.

Differrence between ecommerce and S ocial Commerce:

Property Ecommerce S commerce
M ojor objecteve Transaction Social Interaction

Studies in Indian Place Names (UGC Care Journal)
                      ISSN: 2394-3114Vol-40, Special Issue-26
                      National Conference on “Multidisciplinary Research in Social
                      Sciences and Management Studies”
                      Held on 7th and 8 th February, 2020 at DYPIMS Campus.
                      Organized by: Dr.D.Y. Patil Institute of Management Studies, Akurdi,
                      Pune.

M ajor Activity           Publishing                                   Engagement
Content                   Company generated                            User generated
Problem solving           Company experts, consultants                 Crowdsourcing
Collaboration             Traditional, unified communications          Web 2.0 tools
Product information       Descriptions on websites                     Peer reviews of product
                          E-tailers and manufacturers’ stores          Social networks (f-
M arketplaces
                          (Dell)                                       commerce)
                                                                       Social support by peers and
CRM                       Seller/manufacturer support
                                                                       by vendors and employees
Online marketing                                                       M ultichannel, direct at social
                          Website selling
strategy                                                               network sites
Targeting                 M ass marketing, segmentation                Behavioral targeting,
                                                                       microsegmentation
Table: The difference between Ecommerce and Scommerce
Source: Turban, Whiteside, Kind & Outland, King, Lee 2018, p. 288

Social commerce takesthe bricks and mortar shopping experience to the virtual world. It
accepts for eCommerce the techniques that marketers have deployed in the real world for
decades to make the shopping experience more informative and enjoyable for customers.

The Benefits and Limitations of S ocial Commerce:
According to many researcher s-commerce is making impact on marketers and business
industries. A major impact have been seen on fasion industry. According to SUM O survey it
has been found thtat, 72% use social media on a daily basis. 42% are influenced by what they
see on Facebook whereas 56% are influenced by posts from family members’ and friends’
about a brand and its product.62% have shared information about products and offers on
social media and 83% would share information about a product on Facebook if they loved
their purchase (SUMO 2016).
Benefits of S C to Customers:

       It is easy to get recommendations from friends and other customers, this increases
        more confidence and trust helping customers decide about purchasing products and
        services.
       Customers are exposed to special deals (e.g., via Groupon) for large savings.
       Purchases are better matched with specific needs, wants, tastes, and wishes of
        customers; resulted in decreased decision time.
       Social commerce allows customers to help other customers (social support) and
        Customers can get better customer service from vendors.
       Buyerscan connect with individuals and businesses who otherwise are unreachableto
        them.
P a g e | 341                                                                     Copyright ⓒ 2019Authors

Benefits of S C to Retailers and other enterrises:

 Customers can give feedback on market communication strategy and on product
(service) design and services.
 Vendors get free word-of-mouth marketing
 Increased website traffic which increases revenue and sales
 Increase company and brand rankings on search engine results pages (SEO)
 Better understand customer needs
 Conduct quickerand less costly employmentwith a larger reach to large number of
candidates
 Reduce costs via innovative methods such as crowdsourcing.
 Increase collaboration and communication with employee and external business parter
by suing blogs, wikis, microblog(twitter).
 Provide free advice to small enterprises, employees, customers ,users by other
enterprises and experts (e.g. via LinkedIn groups)
 Conduct market research rapidlyand inexpensively and get feedback from consumers,
employees, and business partners.
 Build brands through conversations and social media promotions.
 Enhance customer service and support with the help of social media.
 Locate experts quickly, both internally and externally, whenever needed

Social commerce provides innovative e-commerce business models. Some models are new
whereas some are the improvements of existing models e.g. group buying. Here are some
models are described below:

 Location based commerce(Knowing where a user is physically located in real time
provides an opportunity to offer him or her relevant mobile advertisements, coupons,
or other services)
 Content sponsorship- Selling advertising on a site that supports content development
(Youtube)
 Crowdsourcing (models that allow firms to design their products or logos by
including their consumers)
 Recruiting in social networks, as shown by LinkedIn.
 Sales promotions conducted in social networks such as contests, discounts, and
downloading free music and software

Limitations of S ocial Commerce:

Although SC provides lot of advanteges to supplier or customers, while implementation it
may involve some risk and issues such as integration of new and existing information
systems. Some risk factors are security and privacy issues, possibilities of fraud,

legalconcerns, and time wasting by employees during work hours. Firms may loss control
over their brand image in social media and review sites which may affect product sale and
brand image.The mainbarricadesto implementationof Enterprise 2.0 are resistance to change,
troublein measuring return on investment, and difficultiesof incorporationwith existing IT
systems and security.

S ocial Shopping: Social shopping includes widgets on social media sites to buy now. Social
shopping is a area of the social network and social activity. It is also known as sales 2.0.
Social shopping is nothing but online shopping with social media tools and platforms such as
facebook, instagram, youtube, whatsapp etc. In social shopping users shares shopping
experience with friends, colleague and with family members. There are various types of
social shopping models are exists on a network viz Group buying, flash sales, Shopping
Together Online in Real Time- Shoppers on social networks (facebook, twitter) can invite
their friends to shop online at the same time residing in different locations,
shoppingcommunities- shopping communities bring like-minded people together to discuss,
share, and shop new or used items, Shopping for virtual products and services- Facebook
sells virtual gifts in its marketplace, Location-based shopping etc.

Viral Marketing and S ocial networking:

Viral markeitng is elctronic word of mouth in which people tell their friends, co-worker,
family members about the product or service they like or dislike. Word-of-mouth
advertisingwill spread quicklyany message millions of people at a low cost. When viral
marketing can be done by blogs such as Twitter then it is referred as viral blogging. Viral
markeing can be done in different ways like by sending e-mail, text messages, and
forwarding of videos, stories,and special offers. Social advertising is specifically used to
increase traffic to the digital and or physical sites. There are different ways of viral markeitng
described below:

Using Youtube: M any sellers are using videos for advertising and to introduce new products
through youtube.com. A viral video can be forwarded rapidly from one person to another.
People fowards videos or their urls to their friends and nearest one that contains advertise or
brand prmotion. These videos can receive million hits in a short period. Toutube videos can
be shared through facebook, twitter, instagram or email.

Using Twitter: Twitter is a microblogging site that has networking capabilities to create
profiles and list of fans and friends. This helps sellers to reach them quickly to create word of
mouth.Companies and marketers can tweet about their business and product offerings,
including promotions.Through thismode, they can inviteTwitterfollowers to visit their stores.
Twitter can be used for the different purposes like to Recruiting and finding jobs, to displays
companies blog and ads, for market research by listening tweets, for collaborations within
and between companies, for customer service etc.

Using Facebook: Facebook is one of the most popular location for social advertising with
more traffic and huge number of users. Facebook can be used to display ads and banner.
These ads can be targeted to users based on search results and their preferences. Users can
claim the Facebook Offer which companies post coupons on their Facebook page.Offers can
be daily deals and other promotions and can be shared to other friends.

Using LinkedIn: LinkedIn is a large professional network and therefore LinkedIn focuses on
professional audience. Companies can create a page on LinkedInthat describe and market
their firm.Companies can purchase display ads that take users to their external website or
LinkedIn page.

Social CRM: Customer Relationship M anagement is a customer service that focuses on
building long term relationship with existing customers. Social CRM is supported by social
media tools like web 2.0, social networking site.Social CRM is designed to engage the
customer in conversations, sharing, and other interactionsin order to deliveradvantages to all
contributorsand increaseconfidence. Social CRM is based on social media whose objective is
building goal and brand loyalty. The SCRM helps seller to increase trust, loyaltyand sales
from their customers and facilitate customer to better and quicker service, and more
engagement.

Indian Market and S ocial Commerce- Social networking and e-tailing becoming an
essential part of our daily lives as it started to gain stream in the Indian online market since
2005.M illions of Indians are now online in the last couple of years due to Jio Effect. M any of
these new mobile-first users WhatsApp is the Internet, YouTube is television — and personal
referrals from family and friends play an outsized role in how they discover new products in
this new digital world.Social networking simplyfacilitedcustomersto stay connectedwith
friends/family. Social networking websited providing far wider purpose to the customers and
marketers. M ost of the organization have already started using social networking platform to
stay connected with customers and business partners.Normally, companies use social
networking platform for branding purpose,connecting with consumers for feedback,
launching products, advertising, and promotion. Social commerce is becoming a key path
forE-commerce players to reach out to their customers(Nielsen, 2015). Personal referrals play
an extremely powerful role in electronics commerce. It has been found that when trusted or
closed friends share a link on whats app or facebook or 60% conusermers agreed that, they
click on links and read more about the news. 50% said that they click on link to view the
offerings whereas 44% said that they forword interesting contetnt to close friend, relative
and family friends.(Nielsen). This engangement of customers crease social shopping habits.
As per the Nielsen survey, majority of the consumers have purchased products via business,
sports, food, grocery and fashion group on Facebook and Whats App.

Number of users in India of Social network from 2015 to 2023:

Source:Statista 2020
Due to easy access of internet the number of social media user raised in 326.1 million in India
in 2018. This growth is lower as compared to growth occurred between 2016 and 2017. The
social media users were expected in 2023 be almost 448 million.
The Indian Premier League, an annual cricket tournament conducted across major cities in
the India might be the anser for the growth of internet users. Among all cricket leagues
worldwide IPL is most popular tournament. The IPL teams receivesmore than 59 million
likes on Facebook only and more than 81 million followers on Twitter. The younger
population aged between 18-24 with over 97 million users were there in 2018 of the
facebook. The reason behind the growth of the social media users is increased availability of
internet connections and access in recent years as well as central government's Digital India
initiative.

Facebook usage penetration since 2015 to 2023:

Source:Statista 2020

Studies in Indian Place Names (UGC Care Journal)
                     ISSN: 2394-3114Vol-40, Special Issue-26
                     National Conference on “Multidisciplinary Research in Social
                     Sciences and Management Studies”
                     Held on 7th and 8 th February, 2020 at DYPIMS Campus.
                     Organized by: Dr.D.Y. Patil Institute of Management Studies, Akurdi,
                     Pune.

As per the Stitista 2020, in 2023it is expeted that 31% of the population of India will also be
access social network up from 21% in 2018.

Monthly active WhatsApp users from 2013 to 2017:

Source:Statista 2020
It has been found that 200 million users are active on whatapp in India. With more thatn 460
million internet users, India stood second largest in the internet market worldwide. By 2023,
it was estimated that this figure would surpass over 666 million internet users.

Tools used to sell online by SMEs:

Source: Nielsen

93% sell on WhatsApp and 51% on Facebook, compared to 21% on a focused e-commerce
platform like Flipkart.Social platforms are far and away the preferred choice for commerce
like flipcart, amazon by micro/small businesses.
P a g e | 346                                                                    Copyright ⓒ 2019Authors

Category of goods sells online:

Source: Nielsen

Across India thousands of small shops sell everything from phone chargers to lehengas every
day. Social commerce offers them a new platform to reach consumers in their community.
The Nielsen survey showed the products and services sold by SM Es on social platforms
contains wide range of a category.
Group chats across various social platforms are giving to be powerful tools for low-cost
customer acquisition. Business organzation are building direct sales network with zere cost
by creating communities of people with common interersts and sharing content that
customers can share.M ark Zuckerberg recently said that group chat will be one of the fastest
growing area on online communication.Indian consumers are discovering everything from
products, content, new jobs and even stock market tips is being redefined through chat
groups. The nielsen survey also showed that WhatsApp’s Status feature is emerging channel
to generates leads. Small and M ediuem enterprises are making creative WhatsApp Status

Studies in Indian Place Names (UGC Care Journal)
                     ISSN: 2394-3114Vol-40, Special Issue-26
                     National Conference on “Multidisciplinary Research in Social
                     Sciences and Management Studies”
                     Held on 7th and 8 th February, 2020 at DYPIMS Campus.
                     Organized by: Dr.D.Y. Patil Institute of Management Studies, Akurdi,
                     Pune.

stories,which lets customers post images, text and videos on their profile that disappear after
24                                                                                      hours.

Source:yourstory.com
Conclusion: Social commerce (SC) is nothing but conducting elctronics commerce activities
in the social media environment.The activity of social commerce is not new. Businesses
know the importance of building relationships with their potential customers. Social
commerce provides huge number of advantages to customers, retailers, and
otherenterprises.Customers can get better prices, improve customer service, and also receive
social support, product recommendationsfrom friends, colleagues and family friends.Since
the number of internet users is growing rapidlyand they are concentrating more and more in
socialmedia networks, social commerce is going to be themost important e-commerce model
in coming days.Seeing all the benefits and the easiness to penetrate,more and more
companies will generate their ownsocial media tools and will connect those tools withworld
popular social media networks in order todevelop strong social commerce offers for
customers.At the other hand, having in market big number ofcompanies which compete to
offer high qualityproducts, the customers will have more and morebenefits.

Social media platforms like Facebook, Instagram, Youtube, Pinterest, and Twitter provide
you with unparalleled access to huge markets.Advertising can be done in many ways.
Advertising on Facebook, LinkedIn,Pinterest, Instagram, Twitter, and YouTube is becoming
popular one.

It has been found that the social media users were expected in 2023 be almost 448 million
and it was estimated that this figure would surpass over 666 million whatsaspp usersas per
statista report. It has also been found that 93% sell on WhatsApp and 51% on Facebook,
compared to 21% on a focused e-commerce platform like Flipkart, neilsen report says.The
Nielsen survey showed the products and services sold by SM Es on social platforms contains
wide range of a category such as fashion, electronics items, beauty products and daily
needs.The nielsen survey also showed that WhatsApp’s Status feature is emerging channel to
generates leads. In upcoming years Fcommerce will become more popular, it will surpass
traditional electronic commerce. Now, its time to get to work on that Facebook store. To
conclude, social commerce has a great future ahead in the market for businesses to reach to
extensive customer.

P a g e | 348                                                                    Copyright ⓒ 2019Authors

Studies in Indian Place Names (UGC Care Journal)
                    ISSN: 2394-3114Vol-40, Special Issue-26
                    National Conference on “Multidisciplinary Research in Social
                    Sciences and Management Studies”
                    Held on 7th and 8 th February, 2020 at DYPIMS Campus.
                    Organized by: Dr.D.Y. Patil Institute of Management Studies, Akurdi,
                    Pune.

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[3] M ohamed Farrag, M ona Nasr, Social M edia and M obile for M easurable Results in E-
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[4] Linda, Sau-ling LAI, Social Commerce – E-Commerce in Social M edia Context,
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[5] Arshjeet Bajwar, Pratibha Goyal, Role of S-Commerce in Contemporary M arketing,
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[6] M unish Kumar Thakur, Dr. Rakesh Kumar, Importance and Problems of Social M edia
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[7] Hasan Beyari, Ahmad Abareshi, Ismail Elferjani, An Exploration of the Factors That
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[8] Skender M ustafi, The benefits of social commerce for suppliers and customers, University
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[9] https://en.wikipedia.org/wiki/Social_commerce

[10] https://yourstory.com/2019/12/india-emerging-social-commerce-sector-opportunity-
startups

[11] https://www.statista.com/statistics/278407/number-of-social-network-users-in-india/

P a g e | 349                                                                   Copyright ⓒ 2019Authors

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