While people have already had some understanding of social commerce, the increase in digital connectivity and the evolution of new technologies has bridged the gap that existed between commerce and social media. The emergence of the middle class across Southeast Asia has further paved the way for social commerce to spread its wings across the region.
A 2019 Econsultancy report revealed that 85% of Southeast Asian social media shoppers now found buying products through social media ‘quick and easy’. 84% of the respondents also said that they would purchase more via social media over the next few years.
Southeast Asia is home to a large population of social media users. A report by Facebook and Bain & Company predicted that the number of digital consumers in the region would reach 310 million by the end of 2020- a number that they had previously predicted for 2025.
To gain more insights into how social media would boost social commerce in Southeast Asia, iKala conducted a study over the first two quarters of 2020 across Thailand, Singapore, Vietnam, and the Philippines. The survey included 12,000 consumers and over 1,000 iKala business customers.
Here are the major highlights of the report.
1. Spending on Social Commerce Exceeds Expectations
Not only are people shopping more online, but they are also shopping for more. The Gross Merchandise Value (GMV), which is the monetary value of goods and services sold through online marketplaces, grew by 3x in the first half of 2020 compared to the same period in 2019.
While attributing this growth to the COVID-19 pandemic won’t be too inaccurate, it is true that there was already a trend for better shopping opportunities even before the outset of the pandemic. That’s precisely why social media companies continued adding better shopping features to their apps for effortless shopping.
2. Adoption of Social Technologies is Up, Albeit at Variance
While the adoption of social technologies has increased, it varies from country to country. Retailers in Singapore are using AI chatbots on a larger scale for order automation. Thai retailers are more inclined toward using AI-backed order management systems.
In Vietnam and the Philippines, there is a higher inclination amongst retailers to use payment reminder tools. However, auto-detection or the function of identification of purchase intent in live-selling remained the same i.e. on a higher scale for social sellers.
3. The Emergence of Live-Selling
Live-selling or broadcasting live videos featuring products has also gained prominence lately. Tools that facilitate live-sales saw substantial growth in all the four surveyed countries, especially in Singapore and Vietnam.
These findings by iKala are consistent with the findings of Facebook and Bain Company report, which revealed that 39% of total engagements via ecommerce come through live commerce. The number of live-sales in Southeast Asia had increased by 13%.
Also, consumers in Vietnam and the Philippines engage in live-selling more frequently than their peers in Singapore. While consumers in Vietnam and Philippines purchase via live sale twice a week, people in Singapore purchase once a week on social media.
4. Women Are Active Social Shoppers
Women have emerged as the biggest social media shoppers. While women in the age group of 25-34 represent the top shoppers in the Philippines, Vietnam, and Thailand on social media, women between the age of 35 and 44 are more likely to shop via social media in Singapore.
Women are, in fact, becoming the key decision-makers of the brands that find a way into their households. A Nielsen report revealed that women will control 75% of the discretionary spend by 2028. It means that retailers should pay more attention to what women want in their shopping journey.
5. Social Advertising the Most Effective Way to Boost Traffic
Although bigger brands have significantly halted their ad spending on Facebook, respondents told iKala that they have continued investing in social ads as they found them the most effective means of driving traffic and attaining their objectives.
While retailers in Thailand and Vietnam provide potential buyers with giveaways and special offers, retailers in Singapore rely more on Google Ads. Retailers use messenger broadcasts and live-selling in the Philippines to capture the attention of potential shoppers.
Also, regular content has become somewhat obsolete as multiple brands vie for people’s attention. A majority of the consumers revealed that they shopped on their mobile phones. This means that high-quality videos are a great way of resonating with the target audience.
6. Trust Remains an Unresolved Issue
Although social media has become a highly sought platform for shopping, lack of trust due to online frauds has become a major impediment to the growth of social commerce. Despite the rapid rise of e-wallets in Southeast Asia, cash-on-delivery (COD) remains the most popular payment method in the region.
While buyers in the Philippines and Vietnam are mostly dependent on cash payments, buyers in Singapore lead the race in terms of digital payment methods through e-wallets, credit cards, and bank transfers.
Wrapping Up
While COVID-19 has certainly amped up digital shopping via social media platforms, retailers need to get accustomed to the dizzying pace at which this change is taking place. For this, they also need the support of social media platforms, which need to add new capabilities to support social commerce.
Moreover, retailers need to make shopping seamless and interactive. Deploying AI-backed order management solutions, social CRM, and real-time predictive analytics can go a long way in consolidating the social commerce space.
To delve deeper into the findings of the iKala study, find the full report here.
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