A 2019 report from Econsultancy found 85% of the SEA social media shoppers said they would buy more on social media over the next few years. With Facebook and Instagram launching their commerce tools, how can we find a new way to connect with our customers through social commerce? What are the future prospects of social commerce?
We invited Nadia Tan, Director of APAC Marketing Partnerships at Facebook Inc. and Kimmy Chen, General Manager of Southeast Asia at iKala, to talk about their thoughts on the development of social commerce, and their expectations for "social commerce for good".
Here are some highlights from their conversations:
What are the key drivers of social commerce development?
Nadia: One of the drivers is the sense of intimacy. It's like talking to a storekeeper without having to go to the store offline. You have an opportunity to find out more about the product, the brand, or even the story of the brand itself. For a lot of us in Asia, it is very entertaining, too. We love chatting with the person that we are shopping from, and buy from the person that we trust. I love it when it's not a bot talking to me, when it's really another person at the end of the line.
What are the differences between social commerce and other types of e-commerce?
Kimmy: The core design is so different. For e-commerce platforms, they want shoppers to make their purchase decision right away, but for social commerce, or conversational commerce, people value the interactions and the comments, and treat it as a way for customers to learn about the product, or the story behind the products.
What are the country differences in social commerce?
Nadia: We actually worked together with BCG to understand what are the differences in customers behavior around, especially in Southeast Asia. In the five markets surveyed, the BCG survey highlights the ease and access to additional product information is the key reason for them to use chat while purchasing. The one country that is slightly different is Indonesia, where product customization was their key decision motive.
In terms of the maturity of the market, Vietnam and Thailand are advanced markets, demonstrating the strongest awareness of this trend and setting a lot of the trends as well. From the survey, one third of the customers said that they prefer to use this method to purchase. Three markets that we're seeing in Southeast Asia are Malaysia, Indonesia and the Philippines, where conversational commerce is prospering rapidly, and is definitely set to expand further.
Kimmy: Last year, we also did a social commerce trend report. Within the survey of 12,000 consumers and more than 1,000 social sellers across Thailand, Vietnam, Singapore and the Philippines last year. The favorite feature of technology they choose is very different. For example, in Singapore, the No.1 feature is AI chatbots, due to the maturity of conversational commerce and social commerce. People and the shoppers are more comfortable interacting with the chatbots. In Thailand, their favorite feature is the order management system, because social commerce is so popular in Thailand, even small businesses have a huge volume of orders, so order management system brings a lot of benefits. In Vietnam and the Philippines, it is interesting that we see people love payment reminders, especially the shoppers. After delivering some quantitative interviews, we know the shoppers love to be reminded because they usually buy the product during the discount, so if they forget to pay, they then miss the chance to have this special discount.
Why is social commerce having growing importance to big brands?
Nadia: We believe that the future is in messaging, as a way to communicate. It's a session between business and consumers. It is immediate, intimate and private. Brands, large or small, should seriously consider investing in learning about this way of communication, whether it is for transactions, or it is for customer care. Ultimately, you and I, and a lot of people, want brands to respect our time, and deliver interactions of utility and value. The demand for consumer service today is something that is interactive, immediate, personalized and frictionless. Especially to commerce, I think conversational commerce offers untapped growth opportunities for businesses. We have a study, something around 45% of respondents in this study from BCG, reported that they never shop online until they began a conversation with sellers via a chat. These new chat-preferred shoppers account for close to half of the purchases made by a chat.
Kimmy: Last year, because of COVID-19, we worked with Unilever Philippines to empower the retailers who had been suffering from the COVID-19 lockdown. With Shoplus, we helped a local supermarket chain store, NCCC Supermarket, to deliver a full e-commerce shopping experience on Facebook Shop and Facebook Messenger. In the first week, there were 17,000 new Messenger connections to their online shop. What's more, the average value of the orders was 5 times than offline bucket size and the return on ad spend was 4.9 times.
What are your vision when we're talking about "Social Commerce for Good"?
Nadia: Back to my passion about small and medium businesses, I feel so connected to the company, because we are in the business of businesses, big or small. We're here to give every individual, every entrepreneur, every small business access to the same kind of tool that historically only big companies have access to. The way I talked about it is we "democratized" marketing. We invested in a lot of features and programs to support economic recovery of small business brands in this region, and to also help people through the crisis.
Kimmy: iKala's mission is to "enable AI competencies" of our customers. We are eager to assist brands and entrepreneurs, especially SMBs, to capture the wave of social commerce, and we're trying to create a new era of social shopping with our AI technology.
Can you provide some tips and tricks for new entrants to social commerce or conversational commerce?
Nadia: First, understand what you are trying to achieve. I believe that every business needs to communicate with their customers, so understand the role that messaging should play in the communication. Second up would be assembling a team that tries to understand the messaging experience. I tell my team who works for the messaging business, "Go buy something on conversational commerce, go attend a live shopping event, then you understand the problem." The third one, start experimenting. Start with a hypothesis and try it out. If it doesn't work, change the approach, or figure out the problems in the hypothesis. In this truly unprecedented time, there's no tradition right now. It's all about innovation and trying something new.
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