Does social media boost ROIs for e-commerce sites?

12 Oct,2012

By Robin Thomas


Merely setting up shop is not enough today, and brands are not limiting themselves to advertisements on television, print, radio or even the internet alone. They are logging onto social media in a big way, interacting with and updating their consumers about new products or other initiatives, and e-commerce sites are not far behind. Myntra, for instance is already said to have registered over 7 lakh Facebook fans. Myntra also has a fashion blog, ‘Style Mynt’, wherein it shares information about the latest celebrity fashion trends, new product offerings on and so on. Another e-commerce site, Indiatimes Shopping, started its Facebook page early this year and is said to currently have more than 2 lakh fans on Facebook.


eBay on the other hand claims to answer over 1,200 queries every month across social media platforms. It is said to resolve over 120 post-transaction complaints every month and is ranked sixth in Social Bakers’ ‘Top 100 Global Brands on Facebook’ index and is also said to be the third most engaging FB Brand Page in India. In addition to these, eBay also conducts online contests enabling the e-commerce site to engage with its consumers. For instance, it conducted a contest called ‘Battle of the Fans’ around the IPL last year. It also launched a Facebook application called ‘Battle of the Fans FB App’ for the contest. As a result, the ‘Battle of the Fans’ app is said to have become the most popular Facebook IPL app two years in a row. Simultaneously, over 15,000 streams were said to have been published from within the app and is also said to have witnessed nearly 27 percent click-through from app-to-merchandise on the site. Besides Facebook, e-commerce sites like Indiatimes Shopping, Myntra, eBay India, Olx etc. are also active on other social networking sites like Twitter, Google Plus and so on.


Social media vs sales targets

Ashutosh Lawania

According to industry estimates, nearly 25 percent of the time spent online is on social media platforms. Out of this, 50 million are said to be on Facebook, and 13 million on Twitter. The question however is, do social media activations lead to better ROI’s (Return on Investments)? Do the ‘likes’ and interactions or engagements with consumers translate into sales? According to Mr Ashutosh Lawania, Co-Founder and Head – Sales & Marketing,, “Though engagement is our focus on social platforms, the activities there do contribute to traffic and sales on Myntra, and we keep track of it. Contributions from these platforms are in the lower single digit figures (percentages) when compared to other channels but they do add up. Besides, Twitter and Google Plus, we also use Facebook for advertising along with generating organic traffic. About 80 percent of all Facebook traffic on Myntra is paid with the remaining 20 percent driven via organic.”


Subhanker Sarker

Myntra uses tools such as Facebook, Twitter, Pinterest, Google Plus to make announcements about new products, trends and to give out regular fashion updates which Mr Lanwania observed results in increased awareness and in turn influences purchase decisions.


Having a slightly different take on the impact of social media activities on the sales, Subhanker Sarker, COO,Indiatimes Shopping was of the opinion that social media activities at times do result in better ROI’s. “Experimentation is the key. There is a certain tonality of communication, a very precise targeting of the message and a very strong follow through that can work magic. Social media is an excellent tool to keep expanding the circle of trust. The offer ads introduced recently drive a lot of sales for us now. The revenue percentage would still be in low single digits, but it all depends how you define it. Measured over a longer time period and favourable attribution logic, it touches double digit percentages.”


Kashyap Vadapalli

Kashyap Vadapalli, Chief Marketing Officer, eBay India observed, “Social media channels get us over 12% of our daily traffic which translate into deeper reach and higher conversions. In terms of ROI, they are one of the cheapest tools for generation of daily visits and excellent mediums for acquisition & retention marketing.”




Anurag Gupta

Anurag Gupta, MD, DGM India was also of the opinion that social media activities surely do reflect on the sales and revenues of e-commerce business. “Most of the e-commerce companies are using advertising on social media to drive transactions in addition to engagement activities. This is on an increase especially since platforms like Facebook have begun providing re-targeting capabilities. Sub-optimal use of social media platform by brands happened earlier, now brands have graduated and are using social media beyond likes and onto engagement and transactions.”


The road ahead

Social media is said to play a significant role in driving rapid growth for e-commerce brands. Only recently Myntra is said to have used social media platforms to launch its latest TVC before launching it on other media platforms. “It is an important platform to engage the audience, increase awareness and drive top of mind recall. It also plays a significant role in collecting feedback and giving customers a platform to voice their opinion and share their views on what they like or dislike” explained Mr Lanwania.


According to Mr Gupta, social media activities for brands are increasing significantly. Most brands today have their presence on social media, including e-commerce brands. The brands are now using social media for engaging with users and a lot of e-commerce brands are increasingly using social media for commerce as well.


However Mr Sarker was of the opinion that although social media has become a very significant platform today, brands must not be seen intruding their consumer’s privacy. “Social media can give you immense insights into your customers psyche. How you leverage that is up to you. Hence it is definitely significant for everybody. But one must respect the privacy of the audience. They are on social media mainly to socialize. If they were in the mood of buying something they would be on an e-commerce website. Intrusion is not taken kindly. We see social media as a customer insights opportunity rather than a sales one.”


Taking social media onto a different level altogether, e-commerce sites are beginning to effectively use advertising on social media to drive their transactions. Although the revenue generated or the revenue percentage from social media activities are still said to be in single digits, it is believed to grow depending on the innovations and the engagement that e-commerce sites have to offer to their consumers.


“Offline shopping tends to be a social phenomenon, and this will catch up with online shopping as well. We foresee online shopping getting integrated with social media as more and more enthusiasts will start seeking opinions before they indulge and seek compliments post indulgence. This could take the form of deeper and richer integration of social tools in the online shopping experience. One would also e-commerce players leveraging the social graph to add engaging ways to enable users to talk & share about shopping on various social media channels” concluded Mr Vadapalli of eBay.


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