Indian social commerce startups have raised a total of $554 million since 2021

Indian social commerce startups raised $554 million this year as of July 16, a seven-fold increase from last year and the highest level since 2015, according to Venture Intelligence.

Viewing social commerce as an extension of e-commerce could open up secondary and tertiary markets and reach low-margin categories in the fast-moving consumer goods and daily necessities sectors, which large e-commerce platforms have not been able to do so far, helping to boost the entire e-commerce industry.

Sourjyendu Medda, co-founder of DealShare, which recently closed a $144 million deal led by New York venture fund Tiger Global, said the success of e-commerce during the pandemic has allayed investor concerns about social commerce.

“Tiger Global’s assertion that social commerce is the growth engine for e-commerce in the country and e-commerce is a sunshine industry is very, very high,” said Sourjyendu Medda.

In addition to increased digitization and wider adoption across demographics, social commerce has become more structured in recent years, experts say.

Akarsh Shrivastava, vice president at Elevation Capital, said: “Social commerce is expanding the e-commerce space in India in terms of customers in existing markets that are well-positioned to address structured categories as well as what we call India 1.0 users.”

“Overall, while traditional e-commerce will continue to scale well, social-led models will significantly expand their reach,” Shrivastava added.

Co-founder and CEO Vidit Aatrey said in a recent interview that when Meesho first sought funding in 2016, investors scoffed at the idea. As of 2021, the company has raised $300 million at a valuation of $2.1 billion, led by SoftBank Vision Fund 2.

“The next wave of growth will be beyond the Tier 1 market, with the first 100 million consumers and social commerce models being realised. Nearly 80% of orders now come from Tier 2 cities and beyond,” Aatre said.

Earlier this month, Walmart-owned Flipkart launched a social commerce platform, Shopsy, which allows individuals and small businesses to become resellers of goods on its network through platforms such as WhatsApp.

India

Social e-commerce