Social commerce is the online equivalent of hanging out with one’s friends in a mall. How it will impact commerce?
Plain electronic commerce will soon go out of fashion if it hasn’t already. Now it’s social commerce, which is what entrepreneurs and investors alike are betting on these days. It encompasses the whole gamut of online collaborative shopping activities such as shared lists, ratings, user reviews, advice and recommendations, and shared coupons.

The premise of social commerce is simple. Someone, somewhere, has already bought what you are about to buy. And they are willing to talk about it. It benefits retailers because they will have increased and more engaged traffic and higher conversions. It benefits users because a friend who has tested and tried something is a much more authentic and reliable source of information than a billboard.

The phenomenon of social commerce, however, has been around forever – in an offline world. Say you were travelling in a Brougham carriage in Victorian England, and needed a watering hole to rest your horses on the way. You asked people you knew. That was social commerce. However, the online revolution is taking this to the next level in scale and depth.

The term ‘Social Commerce’ first came into Internet lexicon five years ago when Yahoo wrote that in a blog. The trend has caught on now. Call it the Facebook conditioning. More and more people are spending more and more time online, often playing interactive social games. More and more offline interactions are getting pushed on the Web.

So a host of companies such as Groupon in the US and SnapDeal in India have emerged in the social commerce space. You can shop Pampers from Facebook, thanks to Amazon webstore. Retailers like Macy’s and Sears, and drugstore chain Walgreens are also on the social commerce bandwagon. Macy’s launched a Magic Fitting Room where they did social commerce with mirrors (or the 21st century equivalent - iPads and Windows 7 gesture control) and Facebook. Both Sears and Walgreens on the meanwhile have added social layers to their websites.

What is driving this trend?
VCCircle attended a seminar on social commerce last week organized by the Silicon Valley chapter of TiE. The panelists included Siva Kumar, Founder & CEO, TheFind, Inc. (a vertical search engine for shopping), Julia Kung, Director, Marketing, Moxsie, Inc. (an e-commerce start up that sells merchandise from independent designers), Jai Rawat, Founder, CEO, ShopSocial.ly (a social commerce start up), and Bipul Sinha, Principal, Lightspeed Venture Partners. The discussion was moderated by Sandeep Aggarwal, Managing Director, Caris and Company.