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Amazon makes a major bet on social commerce by acquiring GlowRoad, a female-focused startup

Amazon is putting a lot of money on social commerce, which is the use of social networks to boost e-commerce purchases. According to estimates, social commerce will be a $70 billion industry opportunity in the next few decades. The e-commerce behemoth announced on Friday that it has bought GlowRoad, a women-focused social commerce firm based in the United States, for an unknown sum.

The e-commerce powerhouse has invested more than $6.5 billion in India, but it faces stiff competition from Reliance JioMart, Walmart-owned Flipkart, and Tata-owned BigBasket. The partnership will help Amazon compete with Flipkart's Shopsy platform, as well as other social commerce firms and startups like SoftBank-backed Meesho, DealShare, BulBul, Mall91, and simsim (which was bought by YouTube's video streaming platform).

"Amazon's software, infrastructure, and digital payments skills will enhance GlowRoad's already loved service, delivering more control and cost for everyone," stated an Amazon spokeswoman.

GlowRoad is a social commerce platform that allows users to resell goods directly from manufacturers and vendors using social media apps like Facebook, Instagram, and WhatsApp. It was founded in 2017 by Dr Sonal Verma, Kunal Sinha, and Shekhar Sahu, as well as Nitesh Pant and Nilesh Padariya. Accel Partners, CDH China, Korea Investment Partners, and Vertex are among the investors who have funded the company, which has amassed a network of over 6 million distributors. 20,000 providers, 18 million buyers, and 2,000 localities are all part of the network.

GlowRoad eliminates the headaches of opening an online business by providing users with a virtual shop, millions of products from suppliers, and payment and delivery options.

According to estimates, social commerce will be a $70 billion industry opportunity in the next few years. They claim that digitalised Indians spending an average of 3 hours every day online, with chatting, social media networking, and video watching accounting for more than two hours. Millions of small businesses are using a variety of social media to sell directly to customers, ranging from conversational commerce on chat platforms to video-led trade to a thriving social reseller network.

Flipkart, Amazon's main competitor, is already making significant gains in the social commerce industry with its Shopsy portal, an app that allows Indians to create their own online enterprises with no upfront investment. Shopsy, which began in July of last year, expects to reach 100 million members this year, making it the country's largest such platform. The Covid-19 pandemic has hastened the move to e-commerce, with more people using Flipkart's Shopsy portal to shop heavily on online.

Flipkart, which is owned by Walmart, has more than 350 million registered users in India. Currently, 70% of Flipkart's clients are from tier-2 and tier-3 cities. Flipkart hopes to increase this to 90% through Shopsy.

Shopsy entered the grocery market in December 2021, focusing on community buying e-grocery orders and charging consumers a flat 5% charge. Shopsy's food section has over 6,000 products in 230 categories, ranging from essentials to FMCG and other dry groceries, and it serves over 5,800 pin codes in 700 towns. To engage consumers, Flipkart is working on adding additional gamified experiences to Shopsy. It is providing both brands and merchants unique ad experiences. With over 30 million downloads, Shopsy recently topped the rankings. On Shopsy, there are over 250,000 vendors that provide 150 million products in over 250 categories. Flipkart hopes to empower over 25 million website url by 2023 with Shopsy, as they profit from the platform's features.

Amazon is also up against Meesho, which is financed by SoftBank and seeks to help 100 million small businesses, especially individual entrepreneurs, prosper online. Small businesses, such as SMBs, MSMEs, and individual entrepreneurs, can use the Meesho marketplace to reach millions of clients and choose from over 700 sectors. This is accomplished through the Meesho ecosystem's pan-India logistics, financial services, and client service capabilities.

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