Amazon India Makes Social Commerce Entry By Acquiring Reseller Startup GlowRoad

Amazon India has acquired Bengaluru-based social commerce startup GlowRoad in an all-cash deal marking an entry into the social commerce segment; a space which has been witnessing a massive jump in gaining users and offering a platform for businesses to sell.  

This is the first acquisition of the ecommerce giant in the social commerce segment where sellers and merchants use platforms such as WhatsApp and Facebook to sell their products and earn profits.

Amazon said, this acquisition will help the ecommerce behemoth to accelerate entrepreneurship among millions of creators, homemakers, students, and small sellers from across the country as well. 

On the other hand, founded in June 2017 by Sonal Verma, Kunal Sinha, Nitesh Pant, Shekhar Sahu and Nilesh Padariya, GlowRoad is a social commerce network which enables suppliers to sell their products to end customers through resellers across more than 400 cities globally.

The founders together hold close to 50% in the startup with Verma and Sinha holding a relatively larger chunk of stake in GlowRoad. 

GlowRoad claims to have more than10 Mn registered members, and enables lakhs of resellers to earn money every month. It is working with all major logistics service providers to solve the challenge of deliveries and returns; delivering products in more than 23K postal codes, primarily in Tier 2 and 3 towns.

GlowRoad raised $7 Mn in a fresh funding round from its existing investors – Accel Partners, Vertex Ventures, and IND Fund – in 2020. The social commerce startup was valued at around $75 Mn after this round of funding.

The social commerce startup GlowRoad raised $11.5 Mn in a Series B+ funding round in 2019. Before this, it raised $10 Mn in Series B from Accel Partners and CDH Investments in the same year.

“We provide resellers with access to trusted suppliers, logistic services, and payment gateway. We want them to have long-term sustainable businesses, this means curating products in terms of quality, designs, and the product mix itself. We also offer a very simple free personal online storefront to our resellers, so as they grow, they can use digital marketing to expand their business,” Verma said. 

GlowRoad’s website says if a reseller sells 100 products a month then he or she can earn around INR 20,000 per month. While typically resellers look for bulk purchases, GlowRoad allows single purchases of items on the platform. 

According to Shekhar Sahu, GlowRoad’s founder, the startup is looking for target companies that specialise in AI/ML and offer smart videotech capabilities, image recognition and intelligent product recommendations. 

“We want to make shopping easy for the not-so-tech-savvy audiences. Once these companies are part of the GlowRoad ecosystem, their tech and tools will be used to make social commerce easy for first-time resellers and end customers,” he added.

While GlowRoad plans to foray into several Southeast Asian (SEA) countries such asThailand, Cambodia, Malaysia and Singapore, this initiative could not have come at a better time. A 2021 Bain & Company report shows that social commerce accounts for close to 44% of the SEA countries’ $109 Bn ecommerce market. 

Meanwhile, Amazon’s interest in the social commerce segment became evident with this acquisition. GlowRoad happened at the time when etailers are focussing to widen their customer base outside the Tier 1 cities and hence Amazon entering into the play makes the segment even more interesting. 

Further, social commerce platforms see categories such as fashion, home and kitchen and other segments drive a large volume of overall sales through the reseller network.

The social commerce platform has opened gates for ecommerce in Tier 2 and Tier 3 towns and beyond, as more than 155 Mn shoppers from these locations are using these platforms. 

The move might help ecommerce giant Amazon to achieve its goal of digitising 10 Mn businesses in the country by 2025 and majority of them reside in small towns. It will also help accelerate entrepreneurship among millions of creators, homemakers, students, and small sellers from across the country, as Amazon said. 

GlowRoad comptes with social commerce platforms such as Meesho, DealShare, CityMall, Flipkart’s Shopsy, among others. In 2021, Flipkart announced its foray into social commerce with Shopsy, an app involving a community of more than 1 Lakh Flipkart resellers. The segment is largely driven by price conscious customers.