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Instagram celebrated the first anniversary of IG Stories earlier this month. In one year, the platform has become one of the most important online channels for brands to reach customers as more than 70% of IG users follow a brand page and 22% of shoppers have regularly used Instagram to browse products.

With 250 million daily active users, Instagram Stories has become a new favourite tool for marketers as half of the businesses on the social channel have produced a story in the last month alone.

Its appeal comes from the contrast of Instagram’s two functions; the polished image shots and the “raw” side of the capture process.

“Within the same platform now we’ve got this lovely juxtaposition that allows you to tell a richer story, but maybe [providing] a more authentic, or more earthy experience alongside the more polished core visuals,” said Hugh Pile, CMO L’Oreal Western Europe.

Instagram Stories Brands

L’Oreal’s post on Instagram Stories

However, with so many advertising channels now available to brands, it is important to know what is the right content to produce on Instagram Stories for success.

The path to conversions

There are five main categories of activity that brands can encourage users to do with the feature in the ads for Instagram Stories, but shopping is the most popular objective for brands as 59% of the ads Stories produced since its launch in March linked to a page where the products featured in the ads were available online.
Instagram Stories Brands

 

“Instagram has integrated ecommerce handoff technology into Stories, namely swipe-up links leading to brand sites, linked influencer tags, and checkout buttons that support brand efforts to move beyond engagement metrics and render their live video content shoppable.” – L2

Brands also use Stories as a gateway or teaser to drive traffic to more elaborate content on platforms like Youtube or Facebook where shareability and engagement are more likely with the user.

Product promotion is still the most popular type of content in Stories, which accounted for 36% of content produced by brands, followed by ‘behind-the-scene’ pieces, and influencer endorsement.

Instagram Stories Brands

Video has also increasingly become a more effective media format that drives online shopping – 34% of Indonesian youth were influenced by video ads to shop online.

With more tools available for brands to engage consumers, especially in a market like Southeast Asia where online marketing channels are dominantly Google and Facebook, it’s time for brands to get more creative.

Ramadan, the time of year when Muslims around the world fast from dawn to dusk, is only six weeks away. The holy month is not only for reflection and prayer through the Islamic world but surprisingly also one of the busiest shopping seasons for businesses.

Online sales and web traffic have been especially profound for online businesses with a rise of 77% and 110%, respectively, during Ramadan last year. With approximately 240 million Muslims in Southeast Asia, the upcoming holy month means more eating, praying and shopping.

But what are observers of this religious festival shopping for? When and where can businesses reach them? Facebook has shared a presentation that contains insights about users during Ramadan. Here’s what to keep in mind:

Shopping peaks before, during and after Ramadan

Ramadan falls on May 27 to June 25 2017, however, sales increase both pre- and post-Ramadan offering businesses a period of nearly three months to capture the attention of potential buyers.

According to Facebook, the pre-Ramadan phase this year falls from April until May 26 followed by the holy Ramadan month, while the post-Ramadan phase falls from June 26 to July 31.

Pre-Ramadan

People start browsing to discover products as early as April, but shopping peaks in the Ramadan month, by as much as 27% compared to the season average in 2016.

Women especially are looking for tips to decorate the home, create a new dish or buy a dress, so it’s best to reach them through online campaigns when they begin prepping for the celebrations.

The pre-Ramadan period is good for offering things like household cleaning supplies as people embrace “purity” and “cleanliness” preparing to welcome Ramadan. The week before Ramadan, people will stock up on food and beverages.

Mobile is the observer’s best friend

  • 60% of Indonesians use the mobile during this season to connect with family and friends. Family, food and the home dominate Facebook conversations.
  • 86% of Indonesians access the internet via the mobile.
  • 96 million people access Facebook monthly on mobile making the platform a smart marketing channel.  
  • More service-based apps are downloaded during and post-Ramadan for a stress-free (28% increase in installs in June, 26% in July).

The Ramadan shopper

The focus is on women during this time of year as more activities become stressful in Ramadan. They include:

  • Keeping a tidy home (30.6%)
  • Cooking (30.4%)
  • Dressing well (27.9%)
  • Entertaining family/friends (19.5%)
  • Being a parent (14.9%)

And because they tend to miss out on relaxing (29%), watching TV shows (20%) and spending time with family/friends (16%), they turn to the mobile to post on Facebook and 50% look for inspiration during Ramadan.

Women namely discuss family, food and beverage and the household in Facebook conversations. The most popular Instagram hashtags during Ramadan include:

  • Hijab, Hijabers, Hijab fashion
  • Fashion
  • Dress
  • Kemeja (shirt)
  • Bajuanak (children’s clothes)
  • Holiday (more local destinations than global)

The most popular shopping topics among women:

  • Clothing – particularly for new clothes for Eid/Lebaran
  • Electronics – TV, Playstation and mobile phones (particularly Samsung)
  • Gifting and promotions

How to reach this demographic? Facebook has shared a handy table for setting up ad campaigns and the topics/keywords to focus on to provide convenience to observers:

Other tips to reach more Ramadan browsers

eIQ case study a few years back found that web traffic peaks in the early hours of the day so boosting online promotions and offers between 3AM to 6AM will be more effective than scheduling those for later in the day.

Digital marketing is a good way to send your brand message to customers during this period, especially if it’s optimized for the mobile device. Businesses also need to be aware that if they are connecting to their audience during this religious time, content should be appropriate and sensitive while providing as much convenience as possible.

  • Inspire with best Ramadan deals: tips for decorating the home, healthy recipes, stylish dresses
  • Begin campaigns early: Start as soon as April (now!) before it gets to Ramadan crunch time.
  • Be a problem solver: Women are stressed about cleaning, cooking and dressing well. Be creative, bundle cleaning supplies with home delivery and curated fashion solutions.

Be it marketing through Facebook, email or any other channel, this is a helpful checklist for optimal marketing efficacy:


Join the eIQ Network for more exclusive insights here

Malaysia Ecommerce Landscape

Malaysia may be the second smallest Southeast Asian nation but it doesn’t lack ambition to develop itself into a powerhouse. Prime Minister Najib Razak recently out-hustled neighbour Indonesia to appoint China’s ecommerce tycoon Jack Ma to advise the country’s government on its route to develop a strong digital economy.

These ambitions don’t come out of thin air. In 2015, Malaysia’s ecommerce market was estimated at $1 billion, which constitutes 1.1% of country’s total retail sales (though these numbers may be skewed). Malaysia’s ecommerce market is on a par with Singapore not only in market size, but also in terms of the well-developed infrastructure within the country compared to the rest of Southeast Asia. This might explain why Malaysia is the origin for some of the biggest tech companies in the region such as the taxi hailing app Grab and Catcha’s iProperty Group.

In the next ten years, Malaysia is predicted to increase the online shopping market size eight-fold to $8 billion, but where does the country’s ecommerce stand now? ecommerceIQ shares ECOMScape: Malaysia to provide a quick overview.

1. Surprise, surprise, Lazada emerges as the leading mainstream platform

Lazada, Southeast Asia’s clone of Amazon, has emerged as the leading business-to-consumer (B2C) marketplace in Malaysia with around 20 million visitors per month while closest rival 11street.my, a South Korean marketplace, grew to become the second biggest online marketplace with more than 7 million visitors per month only a year and a half after launching.

Malaysia Ecommerce Landscape

Locally-run Lelong.my, which started as an electronics auction site but now turning itself into a B2C marketplace, gets around 6 million visitors per month.
While these companies are still competitors to Lazada, none of them pose a real threat to Lazada’s leading position, especially after its acquisition by Alibaba earlier this year (deep pockets)

2. Service providers are early online adopters

Malaysia’s online space is filled with service providers who choose to sell services through ecommerce to happy users. A smart move considering 50% of Malaysians in a recent PwC Survey said they shopped online because of convenience.

These early adopters include:

  • KFIT: started its fitness business in Malaysia offering a subscription model for unlimited access to various gyms, and has now expanded to other categories such as selling online spa and beauty procedures.
  • GoCar: car rental by the hour or day through mobile app that offers an alternative to car rental and car ownership in Malaysia’s capital Kuala Lumpur.
  • ServisHero: a mobile marketplace that allows search and booking of home service providers such as a plumber or repairman.

Malaysia Ecommerce Landscape

3. Mobile shopping platforms on the rise

66% of consumers surveyed in the PwC report have used their phones to make purchases. It implies that the majority of 50% of respondents who have started shopping online in Malaysia within the last three years are heading straight to mobile marketplaces.

Among Malaysia’s most popular shopping apps are companies such as local imSOLD, Singapore-based Shopee and Carousell, Japan’s Qoo10 and global players like Taobao and eBay.

Malaysia Ecommerce Landscape

As Malaysians on average spend 3 hours per day on social media, social commerce becomes quite popular – 31% of online shoppers in Malaysia have purchased directly via a social media channel. The most common being Facebook and Instagram, which is preferred by 41% and 22% of Malaysians, respectively.

4. Good banking system means one less problem for ecommerce

Malaysia has well-developed banking infrastructure and as a result, its residents are more accustomed to digital payments than most Southeast Asian nations. 37% of Malaysia’s population uses mobile banking, while nearly 20% made digital payments and used banking cards in 2014.

According to the global payments solution provider Adyen, the preferred payment method of 42% online shoppers is online banking where shoppers are redirected to their online banking environment to complete purchases.

Malaysia Ecommerce Landscape

Source: The Global Ecommerce Payments Guide by Adyen

As a result, there are plenty of payment gateway solution providers in Malaysia, yet few companies offer mobile wallet solutions as they would struggle to change Malaysian habits regarding using online banking.

Malaysia Ecommerce Landscape

5. Newcomers fight to grab a share of logistics

Successful ecommerce in Malaysia has contributed to increased competition among logistics service providers. The country does not have major infrastructure issues such as islands or bad roads like in the Philippines and Indonesia, posing less obstacles for startups to offer straightforward parcel delivery.

Malaysia Ecommerce Landscape

Traditional last mile delivery companies such as POSMalaysia, Nationwide Express and SkyNet have been somewhat lagging behind adopting new technology and are now being challenged by newcomers like Ninja Van, who proudly states it’s “powered by proprietary cloud-based technology”.

And it’s not only rookies in logistics fighting for their share. In Malaysia, the competition is quite tough among fulfillment service providers who focus on serving the needs of online merchants.

Companies such as DHL, SP Ecommerce, aCommerce, theLorry.com and others are battling for clients not only among themselves, but also with the biggest client – Lazada.

Malaysia Ecommerce Landscape

Lazada already pushed its own logistics service, Fulfillment by Lazada (FBL) in Malaysia, Singapore and the Philippines. The online marketplace offers end-to-end fulfillment solution at a fixed cost per item delivered. As the biggest player in the market and scaled operations, Lazada’s price may be hard to beat.

“Increasingly, having an online shopping functionality is becoming the norm, rather than the exception and it is only going to be more widespread,” said Jon-Paul Best, Head of Financial Services for Nielsen Malaysia.

Click here to download the full, high resolution version of ECOMScape: Malaysia and join the ecommerceIQ network to not miss out on ecommerce market trends and insights.

For more information on other ecommerce landscapes, take a look at:

ECOMScape: Indonesia

ECOMScape: Thailand

ECOMScape: Singapore

ECOMScape: Philippines

Philippines ecommerce landscape

The Philippines, although part of Southeast Asia’s growing ecommerce family, is quite the odd cousin. It’s the only market in the region where Lazada totally dominates the competition, getting around 35 million visits per month with no second player in sight. In addition, with over 10 million overseas Filipino workers and 3 million of them in the United States, Philippines’ online shopping behavior has been heavily influenced by the US, paving the way for innovative cross-border logistics businesses.

As the second most populated country in Southeast Asia with around 100 million residents, the Philippines currently has the second smallest ecommerce market. But that’s not surprising when 46% of the population are connected to and browsing the second slowest internet connection in Asia Pacific region. On top of that, the country ranks lowest among its Southeast Asian neighbors in terms of ease of doing business, which doesn’t help to boost its online trade either.

However, there’s a bright side. Ecommerce in the Philippines is on a runway and expected to lift off to reach nearly $10 billion by 2025 outsizing Singapore and Malaysia. How developed is the market now? ecommerceIQ shares ECOMScape: Philippines to provide a quick snapshot.

1. Lazada dominates over local and regional B2C marketplaces

Lazada, Southeast Asia’s heavyweight of marketplaces controlled by the Chinese ecommerce giant Alibaba, is leading online shopping in the Philippines. It currently ranks as the 7th most popular website in the Philippines. More than 60% of Lazada’s sales in the country come from mobile devices. The marketplace has also doubled the number of merchants selling goods on its platform to 4,000 compared to a year ago.

Philippines ecommerce landscape

Other local marketplaces in the Philippines don’t come close to Lazada in terms of visitors so have found other revenue streams offering affiliate marketing or cashback through their platforms. Takatack, calling itself one the biggest discovery platforms in the Philippines, is one such example. It is both an online marketplace offering products and services from local ecommerce shops and at the same time features products from different ecommerce sites such as Zalora and Galleon.

Marketplace verticals also show potential for growth. The usually competitive Fashion & Apparel category is rather thin in the Philippines. Zalora, online fashion shopping destination focused on Southeast Asia, operates in the country. A small number of global brands have local online stores and only a handful of local merchants sell online meaning the space is wide open for new players.

Philippines ecommerce landscape

Other verticals, such as Electronics & Gadgets, Home & Living, Others, also aren’t too crowded indicating there is room for more sellers.

Yet, Phillipines’ online scene might not be too easy for foreigners to conquer as learned by Thailand’s online retailer iTrueMart. At the end of 2015 it opened online store in Philippines as their first point of expansion out of Thailand but eventually closed the shop in September 2016 after less than a year in the country.

2. Retailers test ecommerce waters through Lazada

The Philippines’ ecommerce market in 2015 was estimated at $0.5 billion or 0.5% of retail in the country as many brands and merchants were not yet committed to making the big investment of opening a full-fledged online store.

However, to test market potential, some traditional brick-and-mortar retailers are opening their shop-in-shops on Lazada. For example, popular local department store chain SM Store initially went online through a shop-in-shop on Lazada where it offers more than 4,000 items. It now has also its brand.com store, powered by Lazada.

Consumer electronics retailer Robinsons Appliances also partnered with Lazada in mid-2015 by opening an official shop on the popular marketplace. Even global brands like Samsung are adopting this strategy.

More brands and sellers will likely follow in these steps to tap online shopping opportunity and add to Lazada’s popularity.

3. C2C ecommerce thrives

Similar to other Southeast Asian countries, a consumer-to-consumer (C2C) market makes up a significant part of online shopping in the Philippines, likely at around one third of the ecommerce market as it is Indonesia.  

OLX is the largest platform for classifieds and peer-to-peer sales. Ranking as 17th most popular website in the country it started as Sulit.ph 10 years ago. Currently, it claims to attract 100,000 to 200,000 new sellers every month.

Philippines ecommerce landscape

In 2016, two other well known C2C marketplaces in the region – Shopee, supported by Southeast Asia’s largest gaming company Garena, and Singapore-based Carousell – entered the Philippines to fight for Filipinos’ hearts and wallets. Shopee’s strategy to lure sellers from Instagram and other marketplaces to its platform by offering merchants free shipping and cash on delivery in the Philippines increased the number of sellers by 40% and the number of listings sold on the app – by 60% within three months.

Philippines ecommerce landscape

As 55% Filipinos own a smartphone and 18% have made a purchase online via mobile, it comes as no surprise that Shopee and Carousell are betting on the Philippines as their next stop for growth.

Another driver of the C2C market is the Filipino preference of Western brands combined with limited options to buy them as international brands have started entering the country just recently and there still remains a significant number of underserved market segments. This fuels selling of popular brands on C2C marketplaces, where products usually don’t come directly from manufacturers but are obtained elsewhere.

4. Digital payments pick up

Around 70% of the Philippines’ population are unbanked and less than 3% of Filipinos use a credit card to make payments. Thus, opening an online store without a cash-on-delivery payment is not really an option in Philippines.

In the recent years, several new mobile wallet apps have been introduced first by local telecommunication companies. For example, PayMaya mobile wallet app and GCash app offer a virtual card for shopping online that can be topped up at various offline points throughout the country. Local banks are also launching mobile banking apps.

Philippines ecommerce landscape

Many of country’s fintech startups are attaining to the needs of the unbanked while also serving overseas Filipino workers who send remittances to their relatives. In 2014, two Silicon Valley entrepreneurs Ron Hose and Runar Petursson founded Coins.ph – a mobile blockchain-enabled platform aimed at the unbanked for easy access to financial services. This start-up raised $5 million series A funding just at the end of October, 2016.

Philippines ecomscape landscape

ePeso app allows to create a digital account with an email address, top it up through scratch cards, over the counter facilities and merchants to send and request funds, pay bills. Paylance allows users to pay and transfer money to Philippines through Bitcoin for free. While Payswitch through its web platform allows small enterprises to offer services such as electronic loading, remittances and bill payments.

5. Innovative cross-border solutions and competition among logistics service providers

While ecommerce is not yet in full swing in the Philippines the logistics landscape is dominated by local players like 2GO and LBC while in other Asian countries international players like Kerry Logistics and DHL lead. Several regional players like Thailand-based aCommerce, Singapore-based SP ecommerce and Quantium solutions provide fulfillment services to online sellers.

Philippines ecommerce landscape

Poor infrastructure, difficult geography and high rates of cash-on-delivery make the shipping of online purchased goods complex. While there seem to be plenty of third-party delivery providers, only two companies – 2GO and LBC – offer countrywide shipping. The rest ensure delivery within metro area of Manila. This limits ecommerce growth and leaves many of country’s potential shoppers underserved.

At the same time, overseas Filipino workers have facilitated the development of innovative cross-border shipping solutions for goods purchased overseas. Beyond family members carrying their Amazon orders back in one big “balikbayan” box, several unique cross-border package forwarding services like LBC’s ShippingCart, Johnny Air Plus and POBox.ph have sprung up to take advantage of this phenomenon.

Philippines ecommerce landscape

Click here to download the full, high resolution version of ECOMScape: Philippines and join the ecommerceIQ network for the first look at the next ECOMScape in our series.

For more insights on the region’s ecommerce landscape take a look at:

ECOMScape: Indonesia

ECOMScape: Thailand

ECOMScape: Singapore

Are we missing any key players? Let us know on FacebookTwitterLinkedIn

singapore ecommerce landscape

With 83% of its population connected to the internet, Singapore holds the title as the most mature ecommerce market in Southeast Asia. Despite its small population, Singapore accounted for 25% of Southeast Asia’s 2013 online retail value, larger than the region’s largest market, Indonesia that contributed 20%.

Singapore’s ecommerce market is valued to reach $5 billion in 2025, making up 6.7% of retail sales in the country. What else can we see from the Lion City’s ecommerce scene? ECOMScape: Singapore will provide a quick overview.

1. Cross-border ecommerce is (still) preferred by the population

Around 55% of ecommerce in Singapore consists of cross-border transactions. Their developed infrastructure, liberal regulations on customs and tax, and large population of expats in the country opens the gate for foreign companies to flourish without having to establish local ecommerce operations in the country.

Singapore ecommerce landscape

The US and China are the top two destinations for shoppers from Singapore, putting Amazon and Alibaba’s Taobao on the top five most visited ecommerce websites in the country.singapore ecommerce landscape
As a result, there aren’t many home-grown players opting for a marketplace business model. Lazada and Qoo10 are the only mainstream B2C marketplaces in Singapore, unlike in Indonesia and Thailand where the space is a battlefield for deep-pocketed companies.

Its strategic location also attracts global companies to use Singapore as an ecommerce hub for their Brand.com presence to serve online customers in nearby markets such as Indonesia and Malaysia. Adidas used to fulfill regional orders from Singapore before opening an online store in Indonesia this October while Charles & Keith, a brand native to Singapore, offers free shipping to most countries with minimum purchase conditions.

2. Grocery shopping becomes more convenient

As the popularity of online shopping in Singapore increases, more Singaporean are turning online to fulfill their basic needs, including groceries. According to Ipsos and Paypal, online grocery shopping in Singapore is predicted to increase 21% in 2016.

This space seems to be very attractive for investors as seen by funding news of pure-play online grocers like Redmart and honestbee and transition of Singapore’s traditional grocers like Giants and Fairprice jumping on the online bandwagon. In fact, the majority of the etailer in Singapore are traditional grocers.

singapore ecommerce landscape

Food delivery services like Foodpanda and Deliveroo are also thriving in Singapore, the latter boasting 25% week on week growth, while Foodpanda claims Singapore to be one of its key markets in Southeast Asia after closing down operations in Indonesia and Vietnam.

singapore ecommerce landscape

3. Daily deals sites are still popular among Singaporeans

As news of daily deals companies shutting down across Southeast Asia grows, the business model may have overstayed its visit in the region but seems to be stable in Singapore. Groupon, which closed operations in Philippines and Thailand last year and sold its Indonesia operations, remains in Singapore’s top 5 most downloaded shopping apps and top 15 most visited website in Similar Web’s ‘shopping category’. Although Ensogo shut down earlier this year, many more deals sites still continue to operate.

singapore ecommerce landscape

4. Payments opportunity in Singapore attracting global players

Singapore’s established infrastructure and internet maturity makes an appealing testing ground for global players wanting to expand their reach in Asia, especially online payments players. The country’s credit card penetration is 38%, while most of the Southeast Asian countries are still below 5%, and the amount of cards circulating in the country averages 3.9 cards per person.

As a result, the Cards and Payments market in Singapore has become one of the most attractive and competitive markets in Asia Pacific. Adyen, a payment platform unicorn from Europe, recently opened its office in Singapore following the company’s plan to focus in Asia Pacific.

singapore-ecommerce-landscape-mobile-wallet

Singapore’s cashless habit has also made Singapore the perfect place for NFC payments solutions like Apple Pay, Android Pay and Samsung Pay to launch in Asia and the heavy traffic to Alibaba’s ecommerce platforms ensure the adoption of Alipay is well on its way.

5. C2C is driven through mobile apps

singapore ecommerce landscape

According to PwC, 38% of online shoppers in Singapore are making purchases on their smartphone, this number is higher than the global average of 28%. 57% of the shoppers in the republic also turn to social media to read product reviews. As an early adopter of internet culture in the region, Singaporeans are apt at using their mobile to access the internet.

Home-grown C2C platforms like ImSold, Shopee and Duriana have focused on their mobile platforms in order to appeal to customers who want the convenience of buying and selling their things on the go. More mobile-only players are expected to emerge.

Click here to download the full, high resolution version of ECOMScape: Singapore version and join the ecommerceIQ network for the first look at the next ECOMScape in our series.

You can also find ECOMScape: Indonesia and ECOMScape: Thailand.

Asia’s mobile phone penetration matched with the high popularity of social networks has paved the way for social commerce to flourish in Southeast Asia. More and more online shoppers are using social media channels like Facebook and Instagram to browse and to negotiate a purchase of beauty products, apparel and other goods instead of buying it on typical ecommerce websites.

Thailand is the world’s biggest social commerce market where 51% of online shoppers have purchased goods directly via a social media channel.

Social commerce has been practiced by every third online shopper in Malaysia and Indonesia, while globally around 16% of online buyers have shopped directly via social media.

Across the region, Facebook and Instagram are among the most popular networks and on average, internet users spend from 1.6 hours in Singapore to 3.7 hours in Philippines on social media every day. This, the fact that Southeast Asians are reluctant to share their financial information online and less than 20% of population (except Singapore) use either debit or credit card to make payments drive social commerce in Southeast Asia.

How Social Commerce Works in Thailand

Usually merchants set up ‘shops’ on Facebook or Instagram, or both, and post images and details of goods for sale. Potential shoppers can browse and inquire about product availability and arrange a method of payment, typically a bank transfer, through a popular chat app such as LINE.

In social commerce, the order is usually made online while the payment – offline.

Social media ‘shops’ offer nearly anything from food, beauty and health products of various brands to apparel and accessories, sometimes secondhand or with minor defects. 

How Big is Social Commerce in Thailand?

The consumer-to-consumer (C2C) market size in Thailand is significant. Page365, a startup that helps small retailers sell products via social media, estimated that social commerce is worth more than $500 million per year in the Land of Smiles alone. However, it is difficult to accurately measure the market size as majority of sales from social media are conducted via bank transfer and merchants refrain from disclosing their real revenues.

ecommerceIQ decided to test one of several popular forums where shoppers frequently discuss favored and reliable Instagram/Facebook stores for makeup. The team chose an Instagram makeup shop by user @lachompshop due to popular word of mouth and recommendations on Pantip forum.

Case Study: The Social Commerce Journey

The search for products takes place by scrolling through @lachompshop picture gallery on Instagram. ecommerceIQ decided to purchase a MAC lipstick, which surprisingly was selling for 550 Thai baht, 300 Thai baht cheaper than in MAC’s official online store.

social commerce

social commerce

On social commerce shops products usually are browsed by simply scrolling through the seller’s Instagram picture gallery.

social commerce

A lipstick on MAC’s official online store costs 850 Thai baht while @lachompshop offered to sell it for 550 Thai baht.

The seller indicated her LINE account in the Instagram ‘About Me’ section so she could be easily reached for further product inquiries. The seller replied on LINE within one minute of the team’s question and confirmed product availability with a screenshot of the product from her Instagram page. The exchange was short – the seller noted delivery would take 3 days and after the team negotiated for express delivery in 2 days at no additional charge, she outlined more details – payment had to be made before shipping of product.

The seller sent her bank details so that 600 Thai baht (included 50 baht delivery cost) could be transferred to her account. The entire purchase process was simple – a short exchange on the chat app with a following bank transfer compared to filling online forms, payment card details, when buying online.

social commerce

The exchange with the seller took place on March 29, 2016.

social commerce

MAC lipstick that was ordered by ecommerceIQ team

Once the transfer was made, the transaction could not be cancelled. After the payment was done, the seller followed up in LINE with a tracking number from Thai Post so delivery could be followed online.

The MAC lipstick arrived in a brown package, sealed with a protective clear tape, and actually even a day earlier than expected. The delivery time in the end was just 1 day compared to 2-5 days waiting for products bought online from brand.com store or marketplace.  The product was in perfect condition in terms of exterior, in the original MAC packaging and was the right color. However, the lipstick texture was slightly smudged, possibly due to the heat during delivery. There was no pre-delivery text or call as would be in a typical ecommerce purchase.

social commerce

The new lipstick was delivered before expected for a nice surprise after agreeing on the purchase via Instagram shop.

Once the seller was notified of the product arrival, she responded politely within 5 minutes adding an element of personalized contact to make the experience more positive.

The Good and the Bad of Social Commerce

Facebook and Instagram provides an inexpensive opportunity for upcoming, small brands to sell online at a lower cost compared to creating a full-fledged webstore. The direct communication with sellers also adds a personal touch, which Southeast Asian shoppers find important to gain trust in the seller, the brand or product.

However, the same trust with regards to product authenticity and payment is also a concern when buying from sellers who stock various products on C2C platforms. Data from Page365 shows that 74% of consumers are reluctant to shop online because they fear fraud and 33% of consumers have complained about product imperfections when ordering from Facebook stores. There have been cases reported when the customer transfers money to a seller via bank transfer prior to a product delivery just to find out later that the seller took their payment and cut off contact.

There is also risk of receiving fake products and C2C shops are usually less willing to accept returns, as in the case with @lachompshop who explicitly stated that unless the product was damaged or delivered in the wrong color, returns nor refunds would be accepted.

Yet, for many, especially in provinces where malls are not easily accessible, social commerce is an easier way to get products they want without having to shop online and without having a credit card. Although it does takeaway from ecommerce websites, the wave of social commerce allows consumers to adopt online shopping habits and eventually encourage them to trust e-transactions. 

What to Expect Next

Seeing the popularity of social commerce, other businesses are looking for ways to enter the market. This June, Facebook started testing social commerce payments in Thailand and later decided to launch the world’s first Facebook Shop in August. LINE, which is widely used to communicate with buyers of social media shops, launched its own ecommerce app LINE Shop already in July 2014.

C2C marketplace Shopee, which is among the most popular apps in Thailand, is trying to attract merchants currently selling on social networks, to its online marketplace by offering easy integration of their Instagram shops and reimbursing shipping, cash on delivery fees to sellers.

The positive experience ecommerceIQ had testing social commerce shows why for many it may be more convenient to shop via social networks than overcome concerns about the security of digital payments to shop online even if it means a few added small risks. 

As the ecommerce market size in Southeast Asia is expected to increase nearly 15 times to $88 billion by 2025, social commerce will likely grow as well thanks to a relatively low online presence of Western brands

 

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ

 

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