SINGAPORE: South East Asia is an emerging leader in social commerce, new data suggests, with 30% of all online sales in the region occurring via social networks in 2016.
Research by Bain & Co, published in the Wall Street Journal, revealed that social commerce makes up nearly a third of all online shopping transactions in the region, with Facebook and Instagram the most popular shopping platforms. Comparatively, Global Web Index data shows that just 7% of Americans use social media for shopping.
At around 175m users, South East Asia is already beating the United States when it comes to number of people on social media, and that figure is set to increase further over the next five years as millions of new users come online in emerging markets such as Myanmar, Vietnam and Indonesia.
The success of social media as shopping platform in the region can largely be attributed to booming smartphone uptake and the amount of time South East Asian social media users spend online – up to five hours a day, among the highest in the world.
Shoppers across the region discover products on Facebook or Instagram, then typically reach out to the seller via mobile messaging apps such as Facebook Messenger, Line or WhatsApp to complete the purchase.
Nadia Tan, head of Facebook's small-medium business unit in Southeast Asia, points to Facebook Messenger as a key reason why social commerce is booming in the region.
The platform allows shoppers to haggle, and communicate in real-time with sellers – often small- and medium-sized retailers – directly. Tan revealed that users in Thailand send twice as many Facebook messages to businesses each month as the global average.
Small businesses in the region like social commerce because it offers a workaround to fee-based services on bigger e-commerce platforms.
Facebook has also rolled out a Shop service in South East Asia to assist SME retailers using the platform. While Facebook has not disclosed how much revenue it generates from online shopping, the company told the Wall Street Journal that Thailand, Vietnam, Indonesia, Malaysia and the Philippines – all emerging markets – are among the top ten countries where Shop is most heavily used.
Data sourced from Wall Street Journal; additional content by Warc staff