MAM
53% online shoppers favour social commerce owing to affordability, transparency & convenience: Report
Mumbai: The combination of social media with digital commerce is seeing huge growth in India considering the benefit it brings to customers as well as businesses. Currently, there are 157 million social commerce shoppers, which is 53 per cent of the total shoppers in the country, according to a report by WATConsult, an Isobar company. This number is expected to grow at a rate of 45 per cent to reach around 228 million by the end of 2022.
The hybrid digital agency, from the house of dentsu India has released ‘Digital Commerce in India – Social Commerce,’ the second report of WATInsights – digital commerce series. The report by Recogn, WATConsult’s research division that provides consumer & business insights, explores the consumer sentiments and attitude towards using social media platforms for shopping.
For businesses, it brings cost-effectiveness and reach through digital marketing, as it connects them directly to their customers. At the same time, the recommendations and comments help customers make a buying decision. This ensures that products are offered at affordable prices with an ability to shop on the platform itself rather than switching to other e-commerce apps or websites.
As per the report, most consumers use social media apps like YouTube, WhatsApp, Facebook and Instagram to shop online. Apart from YouTube, the younger customers prefer to shop on Instagram and Facebook, while the older customers prefer to shop on Facebook and WhatsApp. Social commerce users are very likely to make online purchases from ShareChat in the future, says the report.
While a large majority of these customers are thrilled with the concept of browsing through social media platforms and shopping at the same time, the shopping behaviour varies between males and females, the report noted. Most male shoppers scroll through social media without any intention of making a purchase and if they end up making one, it’s because the marketing campaign initiated by the brand has played a vital role in influencing the buyer. On the other hand, female shoppers specifically search for their preferable brand on the app to either know more about the product/service or to validate their final choice.
Social commerce is becoming popular as more and more Indian customers are moving online and discovering newer ways of shopping. Moreover, it includes a range of immersive shopping experiences, wherein consumers can buy customised products/services without switching apps.
“Social media and e-commerce are paving strong inroads in the regular Indian internet users’ daily routine. Since the shopping environment on social media has ripened, there is huge potential to drive sales through these platforms. Hence, the need for an optimised system revolving around building customer trust and creating seamless experiences is critical,” said Isobar India group CEO Heeru Dingra. “With the customer being at the core of these platforms, focusing on rich customer feedback in the form of comments, opinions, reviews, etc. will help brands cater to their audience effectively and improve their brand consideration and loyalty. This issue of WATInsights reports the pulse of today’s shoppers and serves as an invaluable resource for anyone who intends to demystify social commerce in India.”
WATConsult managing partner Sahil Shah added, “Shopping was, is & will always be social. Platforms, behaviour and mediums will keep evolving while more and more people will go online to shop. This report gives a deep view into what the current consumer behaviour is and highlights that social media in paid, owned and earned terms does get the maximum contribution across the funnel; especially where it matters the most, e-commerce.”
Starting a business is one of the most financially demanding transitions a person can make. In the early months, expenses are immediate and often unpredictable, while revenue streams may take time to stabilise. For first-time entrepreneurs, securing small business loans can feel like a paradox: lenders expect a clean financial track-record before approving a loan, but the business cannot establish that track record without funding. Understanding the start-up lending environment in India and knowing the realistic funding options make this process far less daunting, allowing entrepreneurs to plan strategically.
Why Traditional Business Loans Are Harder for Start-ups
Most financial institutions require a minimum business vintage of 2 to 3 years before approving a term loan. This is because the first two years of operations carry the highest risk of failure. For start-ups less than 12 months old, traditional loan options are limited, and lenders often ask for substantial collateral to mitigate risk.
The vintage requirement is not arbitrary. Businesses that have survived their first two operating cycles demonstrate market viability, which significantly lowers the lender’s risk. Until this milestone is reached, entrepreneurs often rely on bootstrapping, personal savings, or alternative financing to build a stable business foundation. Understanding this reality helps first-time entrepreneurs set practical expectations when seeking funding.
Government-Linked Schemes for Startups
India offers several government-backed schemes to support first-time entrepreneurs. One such scheme is the Pradhan Mantri Mudra Yojana (PMMY), which provides collateral-free loans for micro and small enterprises in three categories:
● Shishu: up to Rs. 50,000
● Kishore: Rs. 50,000 to Rs. 5 lakh
● Tarun: Rs. 5 lakh to Rs. 10 lakh
These loans are available through eligible lending institutions, making them suitable for early-stage businesses. For first-time entrepreneurs, a Mudra loan not only provides initial working capital but also helps establish a credit history. Repaying a Mudra loan on time strengthens the entrepreneur’s profile and increases the chances of securing larger loans in the future.
Using Personal Loans to Fund Early-Stage Needs
When business loan eligibility is not yet established, a personal loan can serve as bridge funding. These loans are assessed on the individual’s credit profile and income rather than the business’s financial history, making them accessible to salaried individuals or those with a strong personal credit record.
Personal loans have limitations: the loan amount is capped based on personal income, and the interest rate is typically higher than secured business loans. Nevertheless, taking out a personal loan during the first 12 to 18 months can provide crucial support as the start-up builds its financial profile. It is especially useful for covering immediate expenses such as inventory, marketing, or office setup costs.
Alternative Financing Options for Startups
For start-ups that are not yet eligible for traditional business loans, other financing options are available through financial institutions. Many lenders offer startup-focused or small-business loans designed for early-stage businesses. These loans evaluate the entrepreneur’s personal credit profile, business plan, and projected revenue rather than relying solely on business vintage. Financial institutions such as Tata Capital provide these loans with minimal documentation and fast disbursal, enabling entrepreneurs to manage operational expenses, purchase equipment, or fund early growth initiatives without pledging collateral.
Some lenders also offer flexible loan amounts, quicker approvals, and streamlined processes, making them well-suited for first-time entrepreneurs. Exploring these options early allows start-ups to access working capital while gradually building a credit history that will support larger loans in the future.
Building the Right Financial Profile Before Applying
For entrepreneurs planning to apply for a business loan in 12 to 18 months, the preparation period is critical. Key steps include:
● Filing Income Tax Returns (ITRs) consistently and accurately from the first year
● Maintaining a clean current account with regular deposits and no overdraft patterns
● Keeping the promoter’s CIBIL score above 750
Lenders assess start-ups by examining these signals. Entrepreneurs who maintain financial discipline from the start will have stronger loan applications after two years. Additionally, tracking cash flow and avoiding irregular withdrawals can further enhance the business’s credibility.
Collateral-Based Options for Larger Requirements
Startups requiring larger amounts beyond government schemes can consider loans against property. These loans allow entrepreneurs to access larger amounts of funding at lower interest rates, as the property secures the lender’s risk.
This option carries significant risk: using personal or family assets as collateral can result in a loss if the business does not perform as expected. Such loans should be considered only when the business plan is validated, the entrepreneur has clear cash flow projections, and the repayment strategy is realistic. Careful assessment of risk versus reward is essential before pledging assets.
Practical Steps to Strengthen Your Loan Application
To maximise the chances of approval, entrepreneurs should:
● Maintain accurate financial statements, bank records, and GST returns.
● Avoid over-borrowing; apply for realistic amounts that match business needs.
● Keep personal and business credit profiles in good standing.
● Explore lenders that offer startup-friendly products.
● Be transparent and complete in all documentation.
Taking these steps early ensures a smoother and faster loan process when the business is ready for formal financing. A well-prepared application reduces processing delays and demonstrates professionalism to the lender.
Conclusion
First-time entrepreneurs often face a funding gap in the early stages, but it is usually smaller than it appears. Maintaining clean banking records, filing ITRs consistently, and exploring personal loans, government schemes, and alternative financing options help build a strong financial profile. Entrepreneurs who plan systematically from day one are better positioned to access formal credit sooner, giving their start-ups financial stability through small business loans.
The ideal time to start building a credit-worthy business profile is the very first month of operations, not when applying for a loan. By understanding available funding options and acting proactively, first-time entrepreneurs can confidently apply for a business loan and set their businesses on a path to long-term growth.
