As entrepreneurial aspirations go up, aided by an ecosystem that encourages it, small businesses are finding a cozy corner on social media, particularly Instagram, to find takers of their products.
Written By Shinmin Bali
There are many ways a technology can be used for business and the same is true for communities as well. This is especially so on the digital platform, owing to the reach, personalisation and engagement opportunities, and the fact that it has little to no entry barriers. These factors have emboldened everyone from multinational companies to say, a mom-and-pop store to even individuals who can pick and choose which platform in the online space works best for them.
And lately, a lot of budding entrepreneurs have found their sweet spot on Instagram. It has become fairly common for a consumer to find out what is latest in say, fashion, makeup or jewellery from Instagram. If not latest, it is a space where the chance of discovering newer products is higher, rather than waiting to be targeted by brands and being presented with a product portfolio.
Instagram for Business was rolled out in 2017. The platform has a community of 25 million businesses on its platform as of November, 2017, a majority of which are small businesses.
This number was 15 million in July, 2017. It is important to note that for a large multinational, Instagram might be just a one-stop engagement touchpoint but for much smaller businesses, it is their primary mode of discovery, interaction and retail, all rolled into one.
As of November, 2017, over 80% of accounts on the platform follow a business, while 200 million (of 800 million) users actively visit the profile of a business every day.
Aiding the small stores
Consider an Instagram account, Allure (run by Praachi Tantia). The account has 17,800 followers and sources fashionable clothes from Thailand depending on Tantia’s quality and style specifications. The products are then showcased on the platform; interested parties get in touch with the account and the transaction is completed via Paytm/netbanking or COD (with a Rs 200 charge for the latter).
The ’80s and ’90s were the decades where the desire for imported products was the most pronounced. Not much has changed in terms of demands for those products, but several means of gratification have emerged since. One of the accounts catering to this need, in the world of makeup, is run by Kinnari More who sources her products from the US and the UK for clients that are aware of the highly popular and latest collections in that category. She earns, on an average, Rs 10,000 to Rs 15,000 per month with the Instagram account.
For Instagram businesses such as More’s, the cost of doing business outside of social media may come to be a deterrent, making them unlikely and reluctant to consider scaling up.
Devangshu Dutta, founder and chief executive, Third Eyesight, points out that there needs to be a certain critical mass built by ways of traction and business flowing through (even if it is not being captured in terms of value) for the platform to decide to be an enabler to it.
On social media, as a small business, when you consider monetisation after having achieved awareness and engagement, finding opportunities and tools to monetise on the very same platform is an ideal situation.
“It prevents people from dropping off. The attrition between interest and engagement to actual purchase is significant if you have to move to another medium or channel to make the payment,” Dutta adds.
The issue of scalability
However, for Araa by Avantika, a silver jewellery brand run by Avantika Kumar Agarwal, the motive is to build scale at a sustainable pace. It currently generates a monthly revenue of Rs 8-10 lakh. It has a 20,700 followers on Instagram and a 16,300 followers on Facebook. With manufacturing based out of Pune, a majority of the gemstones used in the products are sourced from Jaipur with some antique collectibles being brought in from Afghanistan and Turkey. The current agenda is to launch an e-commerce model for the brand at the earliest. Next, would be to partner with stores and establish a marketplace for clients to be able to get a touch and feel of the products. Apart from Agarwal herself, the brand has four staff members and a team of six craftsmen for production and manufacturing. To encourage engagement, the brand runs contests and giveaways.
The report titled Global Trade in the Digital Economy: Opportunities for Small Businesses released by FedEx in 2017 finds that globally, 67% of revenue for SMEs is brought in by social commerce. This is followed by mobile commerce at 59%, with e-commerce being in the lead at 80%.
While e-commerce sites grant a wider platform, they remain search dominated which more often than not stems from an actual purchase requirement. Whereas on visual platforms such as Instagram, it allows exposure of a product line developed for a niche audience while simultaneously allowing a higher degree of engagement with the content.
The addition of shoppable pages on Instagram is a start. But a good amount of redirection is still to the brand’s pages.