Social Commerce. Amazon buys Glowroad to strengthen in India

In India as in the U.S.A., Amazon's ambitions in social commerce are high. By taking over the Glowroad platform, it follows the same strategy as Walmart, which launched a social commerce system.

Through Bleuenn Fequant. Published on 17 May 2022 à 15h35 - Update on 21 October 2022 à 21h32

In India, Amazon (sales of US$ 470 billion in 2021, up 22%) purchased the social commerce start-up Glowroad on 22 April 2022 for an undisclosed amount. The company represents 6 million sellers, who earn around US$460 per month and promote products on WhatsApp or Facebook while offering logistics services.

Glowroad connects electronics, fashion and home furnishings brands with consumers living in Indian second-tier cities. Through this acquisition, Amazon aims to engage more customers into e-commerce. Social commerce offers lower customer acquisition costs via a model where influencers directly sell to their communities via Whatsapp. 

According to Forrester Research, online sales in India have increased from US$33.1 billion in 2019 to US$41.9 billion in 2021 (up by 27% in two years). In this younger online market, social commerce is seen as an intermediate step, as it allows brands to approach the local population via channels they are already familiar with. According to Bain & Company, social
commerce in India is expected to reach up to US$20 billion by 2025. 
With this acquisition, the American e-commerce giant is following in the footsteps of the main competitor, Walmart (turnover of US$573 billion in 2021 up by 1.6%). In July 2021, subsidiary Flipkart launched Shopsy, a social commerce platform, giving Indian consumers access to 150 million beauty, fashion and electronics products through its network of independent sellers.

In India, the largest social commerce player for the past 7 years has been Meesho, a platform supported by Meta and Softbank. It is valued at US$5 billion. With 17.8 million monthly users in 2021 compared to 209,000 in 2019, Meesho is considering an I.P.O. in early 2023, according to Reuters. 
Readers will remember that in the U.S.A., Amazon launched live shopping events with influencers. Thanks to the acquisition of Twitch, the U.S. company now combines the role of content publisher and online retailer, which will give an unprecedented ability to win sales via appropriate content.