Aptive Capital

Social Commerce: A Fast-Rising Subset of E-commerce with Nigerian Startup Rabawa leading the way in Africa

Rabawa is the first & only online distribution platform offering Social & Video commerce supply chain solutions in Africa to house wives, students, youths & aspiring entrepreneurs. Rabawa is committed to helping them quickly and easily launch their online businesses without any investment or inventory. The platform connects reseller business owners to top manufacturers and wholesalers across Africa, Asia, the USA and UK. Rabawa reseller business owners earn up to $10,000 in a month

Since its inception in January 2021, Rabawa has caught the attention of key players in the local e-retail industry. It offers a more organized option for resellers in Nigeria by making wholesale listings available to its registered users, providing secure payment gateway and cost-efficient shipping alternatives for resellers and referrals on its platform. Rabawa’s drive to support business scalability for micro-merchants in Nigeria is clearly aimed at earning the country a good spot on global e-commerce charts by the end of 2025.

It is commendable how e-commerce; the idea of end-to-end online transactions has outlasted skepticism and evolved continuously within retail business ecosystem. An estimated 1.79 billion people worldwide purchased goods online, leading to global e-retail sales revenue of $2.8 trillion, and projections that show e-retail sales to possibly get to $6.5 trillion by 2022. In context, online buying and selling is one of the undeniable outcomes of the global pandemic. Over the last twenty years, while social networks became increasingly audio-visual and encouraging for peer-to-peer conversations, meetings, networking, as much as trading, many more people created social accounts to grow online social circles across platforms such as Twitter, Instagram, Facebook, Snapchat, Clubhouse, LinkedIn, Facebook, WhatsApp, YouTube, Tiktok, Pinterest, WeChat, etc. In a fascinating ThinkwithGoogle report, 63% of shopping occasions begin online. In another finding, five (5) in ten (10) consumers prefer to shop using mobile devices than visiting a physical marketplace, thus indicating a noteworthy shift in consumer habits. Online payment options, also categorized as eWallets, including Apple Pay, Samsung Pay, Google Pay, and PayPal have expanded offerings across the globe in a bid to leverage social spaces. Initially, marketers sought advert spaces on social platforms to derive multiplicity of impressions and boundless reach. Recently, marketers establish active stores on these social platforms, to derive sales conversions, to track buying action using pixels, thus propagating advanced advertising metrics beyond views. Notice the interesting line-up of interconnected possibilities underlining the business potential of all-encompassing shopping experiences on socials. Social interconnectivity has transitioned into the rapid formulation and sustainability of online marketplaces across multiple social networks.

Social commerce explores how social media users can engage with and sell to other users who spend a lot of time on social networking. It is a perfect blend of social media, mobile internet usage, and e-commerce. With a global penetration rate of over 45% (Statista), more than 3.6 billion people use social media platforms worldwide. In Absolunet’s 2020 e-commerce report, over 87% of buyers on e-commerce platforms strongly agree that social media influences their purchase decision. Catching up with the trend, major social media platforms such as Facebook, Pinterest, TikTok, and Instagram have developed e-commerce capabilities, albeit in select continents of the world. Smartphone owners spend roughly ten hours daily browsing through social platforms, thus, there is an increased likelihood to start and complete shopping on social media. 72.9% of ecommerce sales will take place on a mobile device by December 2021(Statista) whereas spikes in e-retail sales revenue are bound to be noteworthy between 2020 and 2024, according to Statista’s e-commerce report in July 2020. Countries such as China, South Korea, Germany, Canada, France, Japan, Indonesia, India, United Kingdom, United States, and Brazil, are earmarked for driving sales of physical goods through digital channels to private end users successfully. An in-depth scrutiny of e-commerce within the aforementioned countries identifies what enlisted key players have in common; noteworthy cross-border activity and favorable landscape for social commerce. China’s top spot in worldwide e-retail charts can be tied to its 27.3% annual growth rate, expansive shipment structure, high smartphone penetration, large digital buyer population, and 94% of shoppers using mobile payment in China. Annual growth rates of 14.5%, 7.2%, 6.2% highlight the level of cross-border activity as much as mobile commerce that goes on within United Kingdom, Brazil, and Japan respectively. These countries also indicated high level of e-retail sales across online verticals such as clothing, books, music, movies, games, downloads, shoes, and consumer electronics. India’s fast rising position on the global e-commerce chart places attention on the role of social commerce in the country. In maximizing social circles and social influence, e-commerce is powering forward in specific countries through popular social and highly interactive video commerce integrations, by actively engaging every user in the buying decision-making process of his/her social community.

In China, social commerce drives 13% of e-commerce growth (eMarketer). A Mckinsey report in 2020 indicates that Chinese consumers spend over 40% of their time on social media apps, an 85% increase in the use of social media to evaluate products, and an alarming 257% increase in the use of social media for purchase. It explanatory how social commerce in China sprung out of its most popular social media platforms such as WeChat, which is investing heavily in social commerce mini programs to support live video streaming features (video commerce). Other key players in China’s e-commerce sector include platforms that integrate social commerce services such as Taoboa, Yunji, Haoyiku, and Pinduoduo. China’s mobile-first social commerce company, Pinduoduo, holds a record of astounding growth for exceeding $100 billion market cap in 2020, barely five years after being launched. Recently, Pinduoduo invested $200 million in Anxun logistics, which has over 6000 service outlets in China, to facilitate nationwide distribution. Understudying its rapid growth, critics argue that being established at a time when Chinese e-commerce is at its peak in addition to funding by Alibaba and JD.com explains some unfair advantage. While it is easier to agree, it’s a more intelligent approach to consider that Pinduoduo’s business strategy leverages its consumer-to-manufacturer (C2M) model and targets rural and semi-urban consumers with a custom value proposition, thus a strategy hinged on group buying reduces the cost of goods, enables the company to go upmarket, and remains a major strength. A good representation of the global potential of social commerce is an Indian startup currently valued at $2.1 billion, which is 26.9% higher than in 2019.

Meesho, a five-year-old privately held company in Bengaluru India, sustains a network of over 13 million entrepreneurs by providing a platform where regular people create catalogues off wholesale listings and earn commissions for reselling products via Facebook and WhatsApp. With over 200 million resellers registered and popularly celebrated for empowering over 200 million Indian housewives to work from home, sell without owning a physical store, and utilize their social circles for extra income, it is inarguably India’s number one social commerce platform. Meesho, which specializes in home essentials; grocery, appliances and electronics, and women’s fashion, has been able to raise $300 million in a new financing round led by SoftBank Vision Fund. It has initiated efforts to expand to Southeast Asia, in its quest to become an ecosystem that will enable all small businesses to succeed online. Certainly, Meesho’s platform for SME suppliers and social resellers will skyrocket the e-commerce revolution in India and continuously increase personalized experience to consumers. It is likely that social commerce will be a source of competition for longstanding e-commerce firms such as Amazon and Flipkart in India.

Moving closer to Africa, a survey by DINA on the e-commerce market in Cameroon indicates that 88% and 68% of respondents purchased items through WhatsApp and Facebook respectively. These channels are not built to support end-to-end online shopping experiences thus users require support for logistics and payments among other causes of customer dissatisfaction with merchants. In Africa, online buyers of all sorts are found across social media platforms however, the term and practice ‘social commerce’ has not been as popular as ecommerce until the launch of Rabawa in Nigeria’s busiest city ‘Lagos’. The recently launched social commerce platform is fast-rising as a result of some enabling factors fostering its acclaimed vision to breed a strong community of African entrepreneurs (micro-merchants or hustle-preneurs) and a sustainable reseller model. Some of these factors include Africa’s young population (51% of 1.2 Billion Africans are under 19 – Cellulant), largely unemployed (60% of the jobless in Africa are youths – World Bank), with access to smartphones and actively social networking (170 million active social media users – Wesocial).

E-commerce is rapidly evolving into social selling, which provides opportunities to leverage alternative business models that offer unique value to consumers, micro-entrepreneurs, and their social networks. Social commerce models may be based upon customer-to-customer sales, peer-to-peer recommendations, reseller clusters, usercurated shopping, social media store integration, group buying etc. Whether it expands an existing customer base beyond the borders of its original community (country) or establishes a ‘side hustle’ to enable users (MSMEs) earn extra income, social commerce continues to blur the lines between social interactions and online shopping by leveraging social media to shorten sales cycle. In an analytical report by Statista, global social commerce sales are expected to triple to $720 billion by the end of this year. It was only 5% of total e-commerce sales in 2018 (globally). While models and enabling factors may differ, a recent report by the International Trade Center foresees rapid growth of social commerce in emerging markets; Middle East and Africa. Considering the evaluative performance of social and video commerce in counties like China and India, it is not strange to expect leading social commerce companies in Nigeria such as Nigeria’s Rabawa to leave noteworthy footprints on global e-commerce charts between 2021 and 2025

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