The French Emperor Napoleon famously quipped that 'England is a nation of shopkeepers'. While the honour belonged to the English in the 18th century, it belongs to Indians in the 21st century. With one shop for every 20-25 families, we have broken all records of shop density. And now setting up shop has taken an entirely new meaning — thanks to social commerce. 

Here’s what it is — using social networking sites such as Facebook, Instagram, Pinterest, Twitter to do business — more accurately — sell products. I don’t mean any of it disparagingly, in fact, quite the opposite.

In FY20, the social commerce industry in India was worth $1.5–2 billion. According to a 2021 Bain & Company report, it has the potential to grow to $16–20 billion in FY25, at a CAGR of 55-60 percent. This rising trend in India is backstopped by social commerce sites such as Meesho, Shopsy, Dealshare, Mall91, etc. What do they do — you ask? They connect sellers with resellers who in turn use their social network to sell products. 

The original promise was a tall one — turning Indian homemakers into entrepreneurs. The unmistakable rise of social commerce in India was built on an hitherto unclaimed niche — empowering housewives, young mothers, aspiring entrepreneurs, students, and teachers in tier II cities and beyond to launch, build, and promote online commerce. This niche attracted investors and assured them of a market untouched by bigwigs such as Amazon and Flipkart. It is only logical for investors to not want to put their money into a war with giants.

However, astoundingly, Amazon slipped down to fourth in global shopping app downloads in 2021 from first place in 2020. Guess who ranked third the same year? Meesho! The big question is how did a reseller-led platform seize Amazonian territory? By moving on from resellers?

Resellers get a kick in the teeth 

The original value proposition was simple. Resellers would lead from the front — use social networking sites to sell products procured from platforms such as Meesho and Shopsy. However, soon enough, social commerce sites such as Shopsy relegated its reseller-model to just one of the many sales channels. The reason? The viability and ease of selling directly to customers than via resellers. 

But as I see it, if a social commerce platform is not wedded to resellers, then it's not social commerce, it’s just commerce. And there is nothing wrong with commerce, in fact, it is the bedrock of our civilization. Above all, it’s a free country; platforms have all the right to steer their business models to what works best for them.

The point I’m trying to make is different. The original mandate of social commerce holds great promise. These very same platforms — the likes of Meesho and Shopsy — have the ability to give teeth to the reselling business. 

It’s an industry awaiting technological disruption; it needs help with developing quality standards, identifying fake products, assuring transparency by providing resellers detailed product information, and enabling  product fulfilment. With this in place, platforms are looking at an industry worth $190 billion globally. In India alone, the direct selling industry is close to $3 billion, as per an IDSA report cited by Mint. 

The final leg of the journey is equipping the army of resellers. Social commerce has real potential to take off in India if you are looking at the right embedded credit product.

“B2B credit can do for social commerce what B2C credit has done for e-commerce.”

Why choose B2B credit?

Just as Cash-on-Delivery gave B2C E-Commerce a tremendous boost by providing an elegant workaround for customers who were averse to placing prepaid orders, B2B credit — whether it is B2B BNPL , credit line , or term loans — will prove to be a similar accelerator of reselling-led commerce. It is an elegant solution for cash-strapped individuals to venture into the business of reselling. Here’s why.  

Net terms are nothing but credit — anywhere between 30-90 days. It is crucial for resellers to have credit support for the following reasons.

1. Resellers are typically homemakers, students, or aspiring entrepreneurs who tend to be cash strapped for cash. B2B credit solves the problem of initial reluctance or inability to put one’s own money into starting a reselling business. 

2. Once in the business, the need for net terms (credit for say up to 90 days) continues as reselling is based on personal relationships. Insistence on upfront payments can strain relationships. More importantly, it is vital for resellers to be able to offer payment flexibility to their customers to maintain relationships. 

3. Resellers like any other business have to deal with unpredictable demand. B2B credit helps them seize business opportunities at times of high demand. 

To know more about how you can empower your resellers or direct selling agents with the right credit product, get in touch with us .