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With Facebook now trialing their new messenger-based payment system in Thailand, the Southeast Asian region is rapidly growing into its social commerce potential. As messaging begins to dominate social interactivity, it is no surprise that businesses are now turning to this platform to inform, understand and sell to their customers. The next stage of this technological revolution is clear: automated robots that can interact with customers to drive and facilitate sales, simulate human conversation and carry out repetitive tasks.

Need help finding shoes to match a outfit? Imagine typing in “what shoes will match this outfit?” followed by a photo of what you’re wearing, and then having the algorithm instantly analyse and respond with three different options that fit your criteria. Imagine being able to complete your purchase without leaving the messaging app. Businesses are providing their customers with a convenient, time-saving and easy to use service. Win win.

What chatbots are doing today

There are many different types of chatbots in the ecommerce sphere, made to serve different purposes such as answering customer queries, providing product recommendations, and simplifying online purchases. Here are a few examples of what is currently being done in the world wide web of chatbots:

Facebook Messenger

When Facebook announced the integration of ecommerce capabilities within its widely-popular Messenger app at the company’s F8 developer conference in April, CEO Mark Zuckerberg demonstrated how quick and easy it was to send flowers. With 1-800-Flowers, users are given suggestions for a variety of occasions (“Thank Yous”, “Birthdays”, and “Love & Romance”), and all details are obtained directly through the chat interface.

chatbot revolution in Southeast Asia

Businesses are already investing a notable portion of their marketing budgets in maintaining personable and engaging Facebook pages to complement their brands and drive traffic to their website, it is a logical transition for them to also adopt a chatbot within Facebook’s native messaging app.

Kik

Kik is another social media platform that has become increasingly popular in the US with more than 270 million users. Its chatbot service has drawn attention by many well known companies – one of them being makeup retailer Sephora. Not only has their chatbot service provided a method for users to purchase products, but also allows them to ask about anything regarding beauty, reviews, product recommendations and tips. The exchanges are sprinkled with emoji’s to make the automated reply appear like a true human brand representative at the other end.

chatbot revolution in Southeast Asia

Sephora chatbot on Kik. (source)

WeChat

With over 760 million monthly active users, WeChat has positioned itself as the dominant messaging app in China. However, its features extend way beyond chatting: without having to leave the app, users can order food, book a taxi, book doctors appointments, follow their favorite brands and pay their bills, just to name a few. Through WeChat, Nike created a chatbot that provides fans with news and updates on the company, and consistently communicates with the user.

chatbot revolution in Southeast Asia

The Nike chatbot on WeChat. (source)

Why chatbots? Why now?

Growing Internet Penetration

A primary factor currently driving ecommerce and soon the chatbot revolution in Southeast Asia is the growing number of people who are increasingly using the internet. The 199 million Internet users in 2014 is predicted to increase to 294 million users by 2017. Out of the 150 million digital consumers who search for products online, two-thirds of them proceed to make purchases there.

chatbot revolution in Southeast Asia

Internet penetration in selected Southeast Asian countries (source)

Mobile is King

chatbot revolution in Southeast Asia

Smartphone user penetration in selected Southeast Asian countries (source)

For users, traditional methods of ecommerce – opening browser, navigating through countless pages and items, and keying in details to check out – still feels tedious and unnatural on mobile thanks to small screen sizes and limited ability to multitask. Businesses need to come up with an alternative solution to ensure that the purchase process is as simple as possible on these devices. The chatbot interface takes advantage of what behavior people have adopted with mobile phones: carry out conversations, anywhere, anytime.

The App Bloodbath

Thanks to the introduction of the iPhone back in 2007, apps have played a huge role in shaping technology, contributing to the dependence on our phones. But the thing is, consumers are growing sick of trying new apps, coming to the realization that they simply don’t need so many. Not only are they costly to build setting you back anywhere from $50,000 to $1,000,000, but further efforts need to be invested into marketing the app, and getting users to download and regularly use it. With a saturation of apps in both the Apple and Android app stores, and limited app discovery tools, it’s becoming harder and harder for new players to cut through the noise.

Smartphone users spend most of their screen time on a single app, which means, as a business, that is where you have to be.

Messaging: The New Platform

Creating chatbots within existing messaging apps is attractive because someone else has already done a large chunk of the hard work for you. In Southeast Asia, there are over 73 million people on LINE. Integrated chatbots give businesses the opportunity to directly reach these large pools of users without forcing potential customers to download yet another application.

“Messaging apps are the platforms of the future, and bots will be how their users access all sorts of services.” — Peter Rojas, Entrepreneur in Residence at Betaworks

Furthermore, these companies are providing developers APIs so that it is easier for businesses to create their own bots since most don’t have the technical skills or resources needed to build a witty chatbot from scratch. And in return, the platform is loaded with customer data; a dream for any marketer. With the versatility evident through Facebook ads that allow businesses to target audiences based on anything from location to interests, imagine the degree of personalization and segmentation that could be made possible through their Messenger extension.

A Society of Social Commerce

The Southeast Asian economy already heavily engages in social commerce, a marketplace built within the walls of social media. According to a Bain & Company study released this year, more than 80% of digital consumers use social media or messaging apps to research products and connect with sellers. Moreover, social sales comprise of up to 30% of all transactions online. Thailand boasts the world’s largest C2C market, with over 50% of research respondents saying that they buy items found on social networks such as Facebook and Instagram.

chatbot revolution in Southeast Asia

A typical social transaction: users find items they are interested in, and get in touch with the seller who listed the item via chat.
Source: ecommerceIQ exclusive research

The magic of chatbots is that they are able to closely imitate the essence of conversational commerce. Set within the same interface, customers can talk with bots in a similar manner in which they would talk to human sellers through a series of questions and responses. In such a setting, algorithms may even be created to simulate the bargaining dialogue that occurs in everyday transactions.

Still some way to go

Through chatbots, businesses have the opportunity to initiate conversation directly with their target consumer that is highly personable. The brand-to-customer interaction is something that has not truly been scalable until now. While chatbots can not replace the feature-rich user interface provided by a website, they bridge the gap between functionality and convenience.

“Every brand is going to move into the mobile commerce space very quickly. In the next years, we will probably see 20-30% of the big brands having their own bots in chat apps, starting with Facebook’s messenger platform.” —  Pat Wattanavinit, Product Manager at aCommerce

The current state of chatbot functions are still quite linear and rigid, too early for companies to start replacing their customer representatives. Some users report conversations as being frustrating and slow due to the bot’s limited understanding and capabilities, think about your own interactions with Siri. Chatbots won’t truly be invaluable and gratifying until AI is able to achieve a human level of understanding but that’s another story in itself.

By Shirley Liu & Alexandre Henry

Tweet your feedback to @ecomIQ 

The rapid growth and heavy usage habits of Indonesia’s smartphone users have made the market one of the most closely-watched in the world.

A July 2016 study by Asian research firm DI Marketing into the habits of smartphone users by age helps illustrate some of the distinctions when it comes to the country’s device ownership and usage habits.

Indonesian Smartphone Habits by Age

Source: eMarketer

Best takeaways from DI Marketing report

  • Consumers between the ages of 26 and 30 tended to prefer more expensive Korean-made devices, with 31% of respondents in the age group mentioning they owned a Samsung smartphone.

Those under 25 preferred handsets from Chinese manufacturers like Xiaomi. 

  • Nearly 20% of smartphone owners in Indonesia have two or three smartphones.
  • Many from the study’s older age groups own multiple smartphones, with 26% of those between 26 and 30 and 30% of those over 30 owning two or three devices.
  • Younger users tended to prefer activities like playing games, listening to music and watching videos, while those 26 or older tended to like smartphone activities like taking photos and checking email.

The report gives insight in regards to what the coming generation is interested in and how to best connect with them. Mobile commerce has become an area of emphasis for many online companies, especially after witnessing the Pokémon Go craze.

A version of this appeared in eMarketer on July 19. Find the full version here

Lazada Thailand CEO at Alibaba

Lazada Thailand’s CEO, Alessanndro Piscini (center right) outside of the Alibaba Headquarters

After buying a controlling stake in Lazada in April, Chinese ecommerce giant Alibaba shares its Big Data & Analytics platform with Lazada, reported the Bangkok Post.  Alibaba hopes the data sharing will provide online merchants with relevant consumer purchasing data and allow Chinese retailers and manufacturers to sell their products through Lazada’s site. This will open opportunities for Chinese retailers to tap into the largely untapped Southeast Asian demographic of 500 million people.

Thailand Ecommerce Stats at a Glance

In light of this announcement, Alessandro Piscini, Chief Executive Officer of Lazada Thailand made some comments on the current nascent landscape,

  • The average Thai person spends 7.4 hours per day on different media platforms, with mobile phones accounting for 3.1 hours of that total. This demonstrates that online channels are increasingly playing a more important role among Thai users

By 2019, of every $10 dollars (THB 350.50) retail purchase made globally, at least one dollar would go online (Neilsen)

  • Policymakers and consumer protection authorities must closely monitor ecommerce companies to make sure they deliver on what they promise to consumers
  • 69% of Thai smartphone users do research online before making a purchasing decision
  • Thailand’s online retail market will continue to grow thanks to the rapid adoption of 4G smartphones and increasing numbers of mobile internet users
  • Despite Ensogo’s recent closures, Lazada isn’t worried because they operate through a different model and have financial support from Alibaba

There have been many speculations in regards to Lazada’s new road map after the large acquisition. An anonymous source has confirmed the two companies are in the midst of integrating new policies and HR initiatives to encourage outstanding employees but translating legal documents from Chinese into English first has slowed down the process. Piscini has stated that the company has no plans to rebrand.

A version of this appeared in Bangkok Post on July 5. Read the full article here.

shopback-logo-cropped, ShopBack Dominates iOS Store

Source: Tech in Asia

ShopBack, a service that lets you get cashback on your ecommerce purchases from over 500 merchants in Singapore, launched its iOS and Android apps yesterday. The app is now the top free app in the shopping category in the iOS App Store, and number four (as of July 5 at 9.45am SGT) in the top free apps category in Singapore.

Founded in August 2014, ShopBack has since raised $1.1 million from investors. It acts like an affiliate marketer for ecommerce sites, collecting a fee for every purchase made through ShopBack, part of which is passed to consumers. A variety of marketing methods such as influencer marketing through actor Tosh Zhang, Facebook paid marketing, email marketing to its existing user base, and YouTube videos were used to drive app downloads.

ShopBack Dominates iOS Store

Ecommerce cashback apps are not a new concept

San Francisco company Ebates was doing it since 1998, and in 2014 it was acquired by Rakuten for $1 billion. In Indonesia, Ardent Capital funded Snapcart, offers a cashback app for offline purchases, to encourage O2O behavior. Asia has seen an ecommerce boom only in the past few years, fueled by a combination of venture capital fervor, greater internet and smartphone penetration, and rising incomes in emerging markets. The ecommerce market is nascent but fast growing.

ShopBack doesn’t appear to have generated the same amount of enthusiasm among Android users yet, as it’s nowhere near the top rankings there. For developed countries such as Singapore, the concept may be successful as the market has reached maturity but for many countries such as Indonesia and Philippines where Android users are dominant, adopting the simplest of ecommerce behavior still has a long way to go.

A version of this appeared in Tech in Asia on July 5. Read the full article here.

mobile opportunity in Myanmar

Source: mizzima.com

The new digital wave in Myanmar is both very recent but extremely fast. In particular, the mobile opportunity in Myanmar is currently creating untapped opportunities for tech start-up and ecommerce ventures across the region. The country has seen massive growth in internet penetration, mobile phone adoption and social media usage in the past few years, spurred by the end of direct military rule and rapid opening up of its market after decades of isolation.

The consumer market in Myanmar has essentially bypassed the development stages seen in other economies and moved straight to digital and mobile, making the country a potentially interesting test bed for internet-enabled businesses.

The mobile phone penetration rate in Myanmar, which barely touched double digits in 2013, has now reached around 50% of its estimated 54 million population last year.

According to Ericsson report, Myanmar is the fourth fastest-growing mobile market on earth and over six years, the cost of a SIM card has shrunk from US$ 1,500 to US$ 1.50 today.

The major challenge to overcome urgently is “that the digital transformation is happening so quickly, it’s difficult for countries in the region to keep up in terms of talent” explains Rami Sharaf, Senior VP of Royal Group of Companies Ltd in Cambodia.

The upside of the new mobile opportunity in Myanmar is that it creates new markets for local and foreign tech and ecommerce startups around the region. “With more users, more businesses will come because the market is here,” he said.

A version of this appeared in Bangkok Post on June 20. Read the full article here.

OnePlus Quits Indonesia

Source: Google Images

OnePlus blames Indonesia’s complex and strict regulations on imported smartphones for its decision. Last year, the government passed a law that requires imported 4G phones to contain 30 percent locally sourced components. OnePlus failed to complete the mandatory certification process on time and the investments needed to comply with the new regulation, set to take effect in January 2017, is too overwhelming for the relatively new brand.

“Chinese phone maker OnePlus is halting its operations in Indonesia. That means the company’s upcoming flagship phone, the OnePlus 3, will not be sold in the archipelago through official channels”

The regulation would require OnePlus to build a new fulfillment center or join a local factory, something beyond the company’s current capability. OnePlus will be missing an enormous opportunity to reach the 326M Indonesians on mobile where foreign companies such as Samsung and Asus are performing well.

Indonesia mobile

The new regulations set by the Indonesian government as an attempt to give room for local players may decrease success found by smaller foreign brands. It also highlights the complexities of doing ecommerce in Indonesia as ever-changing government regulations is often seen as a bottleneck to business growth.

Read the full article on Tech in Asia here.