Social commerce doesn’t create entrepreneurs
Reselling is like multi level marketing
Reselling is like multi level marketing
Social commerce claims that they help common people become entrepreneurs. Social commerce apps attract users in lakhs, by promising a solid business, growth, and wealth. Do users gain as per the promise?
Pranit Sarda writes in Forbes, “By creating a zero investment model for sellers, and building trust among buyers, social commerce startups such as CoutLoot and Mall91 are changing the rules of ecommerce.”
Social commerce practices push-marketing, where resellers or users send pictures of the products to their social contacts. If contacts agree to buy the product, the resellers get a margin. Founders of Meesho claim, that people from lower socioeconomic class spend less than the top tier customers. Therefore, they buy unbranded products. Social commerce is useful, as it creates trust. Also, most of the users use vernacular languages, which makes reselling important.
One, it sounds like 1% fallacy. India has a huge population, but lower spending power doesn’t allow people to shop often. The current decade’s slowdown hasn’t helped either. Perhaps the market doesn’t exist. Two, calling resellers solopreneurs or homepreneurs doesn’t make them add value to the process. Apps only allow to sell them within their social groups- online or offline. Users, who want to take up reselling, should take the claims of social commerce apps with a pinch of salt.
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