Merkle says there’s been a 114% increase in web referrals through IG between Q1 2018 & Q1 2019.
At 12 noon every day, Deepika Nandal competes with 20,000 other followers to buy her favorite handloom apparel from an Instagram account called @ SanskritikVastrashala. The Mumbai-based food blogger frantically types the account name on the search bar of her app before it’s too late. There are only 30 unique pieces to choose from every day. “The catalogue is booked within minutes, and sold out in an hour,” says the 32-year-old.
Nandal doesn’t mind the frenzy. Kriti Chaudhary — who runs Sanskritik Vastrashala from a tiny studio in Delhi’s Janakpuri — is her virtual shopkeeper. With work and a nine-month-old baby, Nandal, a self-proclaimed shopaholic, has no time to visit exhibitions to look for the handcrafted stuff she likes. “Instagram saves a lot of time for me. In fact, I only shop on Insta now,” she says. From apparel to accessories, cosmetics to cutlery, “I find everything on Instagram by typing the right hashtags,” she says. Even Bengaluru-based Sanhita Ganguly follows a select few business accounts on Instagram for her daily shopping fix. The 24-yearold automobile software engineer fancies organic skin care and hair care products and sometimes an odd dream catcher, too. “If you do a basic Google search for organic items, these brands won’t pop up. Most are small businesses, often run by one person. Some don’t even have a website.” But their products are better than those available on ecommerce portals, Ganguly claims. “I hardly buy anything from anywhere else .
Nandal and Ganguly have been utilising Instagram for search-based shopping for over a year now. Meanwhile, in Delhi, Himanshu Khanna indulges in discovery-led shopping on the platform courtesy of Instagram’s algorithm-generated ads popping up on his feed. “If I chance upon something interesting and affordable, I share the post via Instagram messaging with my wife. She may take time to respond on WhatsApp, but on Insta, she’s prompt. She responds in emojis,” says the 32-year-old design and tech professional. Over the last six months, he bought several “offbeat” items he claims are hard to find elsewhere. These include artistic dinner plates, odd key chains, jewellery, salt & pepper cases (in the shape of birds and dolls, we are told), and several other collectables. On any other social media platform, Khanna would find ads intrusive, but not on Instagram. Here, “the objective is fun-browsing, not info-browsing,” he explains.
Over the last three years, Instagram has introduced several add-on features for businesses to facilitate commerce on the platform, estimated to be a global market worth $10 billion by 2021, according to a Deutsche Bank analysis. Besides the Shop Now button seen at the end of a few sponsored posts, the platform allows businesses to use Shoppable Tags for regular posts and Insta Stories. Users can tap on a tag in a picture or a video to buy products directly from a brand’s site. Additionally, the Explore section has a separate vertical titled Shop that showcases brands across categories based on user’s interest.
A recent report by performance marketing firm Merkle says there’s been a 114% increase in web referrals through Instagram between Q1 2018 and Q1 2019.
In March, Instagram launched a Checkout feature in the beta-testing phase for 20 brands in the US, including Adidas, Zara, Nike and Dior. It facilitates buying without having to leave the app. In May, UKbased trade portal Digiday reported that Adidas saw a 40% year-onyear growth in online sales in Q1 2019, which CEO Kasper Rorsted “largely attributed to Instagram”.
Archana Vohra, director of small and medium businesses at Facebook India, gives a few Instagram-centric case studies to illustrate Gupta’s point: “Recently, Swiggy used ads in Instagram Stories to find new users and drive app installs, achieving a 30% lower cost per install and a 17% increase in installs. Dineout ran an app-install campaign in Instagram feed and Instagram Stories that featured an animated video, which facilitated a 17% lower cost per install.”
Apparel major House of Anita Dongre has seen a 10% month-on-month growth in business on its site from Instagram referrals over the last one year, says Kavindra Mishra, the company’s CEO. From hyperlocal service companies like UrbanClap to marketplaces like Myntra, Nykaa and Snapdeal, these are all on Insta. “The visual appeal of Instagram works well for the impulsive, discovery-led proposition of Snapdeal,” a spokesperson for the company tells ET Magazine.
However, for Rahul Deorah of UrbanClap, being on Insta’s Shop is mere hygiene at this point, fetching the app orders in high double-digits a month at best. “It may not be the best fit for channel conversion for us yet, but if we have a product on the lines of e-commerce in future, we will be able to squeeze more out of the platform,” says the Gurgaon-based company’s VP of marketing.
The real winners in Instagram’s e-commerce avatar are the small and medium businesses (SMBs). Businesses like Chaudhary’s Sanskritik Vastrashala that started with an investment of Rs 5,000 in 2016 and make Rs 1 crore in annual revenue now. Chaudhary operates exclusively on Instagram and gets business through word-of mouth recommendations — hers is one of those rare private accounts to have over 20,000 followers.
Apparel is a rage on the platform. Supreet Bhatia from Chandigarh earns Rs 1-2 crore annually by selling chikankari dress material through her account @LucknowiAndaaz. The 32-year-old even got queries from the US and Canada for Eid, she says. Mumbai is the biggest market for Kanpur-born communication professional-turned-entrepreneur. Beauty is another category that does well. Accounts like @RawBeauty2018 and @Soapworks_India that operate in the organic skincare space, have annual revenue of about Rs 1 crore. “Until a couple of years ago, the products we sell were only available abroad. Now, people can buy them from us via Instagram. The platform’s efforts in giving us a blue tick to signify a verified profile have added a layer of security and trust to the transactions,” says Harini Sivakumar, Gurgaon-based founder of Soapworks India.
It is easier to trust these businesses, says Mumbai’s Nandal. “You can just go through the comments on their posts and read public reviews.” And trust works both ways, adds Sunayana Walia, founder, @RawBeauty2018. “I never take advance from buyers. They pay only after they’ve received the parcel and ever since I started the account in 2017, only three people have defaulted on payments,” says the 43-year-old from Jalandhar. Commerce on Instagram also has room for quaint categories — like miniature-food magnets and slime. Shilpa Mitha, 32, is famous for her Indianised miniature food magnets — of vada pav and dosa — on @SuenoSouvenir. Then there’s Avi Natesan, 19, an engineering student from Chennai, who makes Rs 11-12 lakh a year by selling slime. Natesan started doing Instagram Stories on making slime when nobody was selling the sludgy stress-reliever in India. Incidentally, she discovered the craze for slime on Insta. “I saw that a girl in the US had made $1,000 in a week by selling slime and started experimenting with it,” she recalls. “Soon, people started tagging me on slimerelated queries on the platform.” Initially, she would sell slime boxes to friends in Chennai. Now, she gets orders from Punjab and even Kashmir. “It’s all because of Instagram,” says Natesan, adding she wants to branch out into aromatherapy soon.
“Traffic for microtransactions from Instagram Stories has seen more than 5x growth in the last 12 months compared with the same period the previous year,” says Sampad Swain, co-founder of digital payments gateway Instamojo. “The same traffic has grown by 2.25x for regular Instagram posts,” he adds.
A lot of these sellers prefer Instagram to traditional e-commerce. Delhi’s Chaudhary finds it hard to stick to Amazon’s picture-uploading guidelines for 30 photos every day. For Walia from Jalandhar, it’s a matter of principle: “Marketplaces are too commercial for my taste. I’m promoting a minimalistic lifestyle through my products. That story can never be told through Amazon.” Could Insta then pose a threat to the likes of Amazon in the future? Unlikely, says an e-commerce professional who wishes not to be named. “Every large tech platform wants to get into ecomm today. But they forget that e-commerce itself is struggling to make money.” Additionally, bulk-buying may not be an option on the platform even after Checkout comes into play.