It’s not a given that a leader in search can successfully pivot into other areas like social media — just ask Google — but a new service launching in Russia today, from that country’s search leader Yandex, shows one route a company with a lot of smarts can take to make sure they remain a central player in the social game. Today sees the launch of SocialMart, a social shopping startup financed by Yandex (through its seed-funding program Yandex.Factory), and powered by Yandex (via Yandex.Market), but is not Yandex itself.
Both Yandex and SocialMart are banking on the fact that the rising popularity of ecommerce in Russia is inevitably going to cross over with the equally popular trend of social networking: up to now, those twains have not met, unlike in other markets, where services like Mertado (now part of Groupon), Sneakpeeq, and Fab have been running away with the “social shopping” banner, picking up users and funding in the process.
Yandex says that its Market is already the country’s largest comparison shopping service, containing 33 million offers from 9,500 online shops. Its monthly audience in March 2012 was over 14.2 million, according to market researchers TNS. This launch with SocialMart marks the first time that the Market API has been used by any company — and, Yandex claims, the country’s first social shopping service overall.
There are already some big players in both ecommerce and social media in Russia that may also try to get in on this game: Sites like private buying club KupiVIP and “Russia’s Amazon” Ozon have made big advances in the country, now the biggest Internet market in Europe at 53 million users, with an ecommerce market projected to be worth $30 billion by 2020. Meanwhile, the country’s leading social networking site Vkontakte has around 110 million users, 70 percent in Russia, and is looking to grow beyond those borders.
There does seem to be an appetite for social shopping. Research from Nielsen notes that in a recent online survey, 86 percent of consumers said they trusted buying recommendations from friends and family — some 31 percent more than those that just relied on consumer reviews.
Under its original name of Social Market, SocialMart in June 2011 got a small round of seed funding (in the tens of thousands of dollars, Yandex tells me), as part of the Yandex.Factory investment program. One year on, SocialMart, underpinned by data from Yandex.Market, is now offering users a variety of social features to customize their shopping experience: for example, users ask for and give opinions on products, run polls and get reputation points for their influence.
SocialMart is currently available as an app on Facebook and the country’s number-one social networking site, Vkontakte, and for now it only focuses on the Russian market.
Investing and partnering in a project like this is not just about Yandex looking for social cred. Yandex will take affiliate commissions on web calls and website click-throughs generated through the service — a Yandex person declined to tell me exactly what the value of that commission will be.
Yandex says that its Factory seed-investment program has had applications from about 2,000 startups since launching last year.