The age of social commerce will be powered by Southeast Asia
- iKala’s CEO & Co-Founder, Sega Cheng reckons trends like social commerce and live-selling will continue to intensify in SEA.
We are living through times where the opportunity for social media as a sales channel cannot be ignored. It is the sheer amount of time spent by people, especially younger generations, on social media apps that are making social commerce the new indisputable market trend.
Being one of the youngest and largest communities in the world, Southeast Asia has been and is expected to continue being the biggest market for social commerce. Especially given how a large chunk of its population is entering its prime of technology adoption.
In fact, according to the latest report by Google, Temasek Holdings, and Bain & Company, more than 75% of the population in six major Southeast Asian countries have access to the internet. To top it off, this year alone, as many as 40 million people across Singapore, Malaysia, Indonesia, the Philippines, Vietnam, and Thailand came online for the first time.
That has led to the total number of internet users in those six countries rising to over 440 million people, of which 80% made an online purchase at least once, the report said. In short, it is clear that social commerce offers significant long-term potential for businesses willing to leverage it.
Tech Wire Asia had the opportunity recently to speak with iKala’s CEO & Co-Founder, Sega Cheng to discuss the potential for social commerce within the Southeast Asian region. For context, iKala recently published a report titled ‘Riding the Pandemic Wave & Beyond’ which surveyed 1600 social shoppers and more than 23,600 social sellers across Thailand, Malaysia, the Philippines, and Singapore to identify emerging trends in the region’s social commerce space.
What does the rise of social commerce mean for SEA’s retail industry?
Southeast Asia is home to some of the most avid social media users in the world, and in recent years, many of them have started leveraging social platforms not just to connect and explore, but also to shop. According to our new research report, social commerce (78%) has overtaken traditional brick-and-mortar (35%) to become the second most preferred shopping channel in the region, second only to e-commerce platforms (91%).
As usage continues to increase, social media platforms — from Facebook to TikTok — are rapidly adding new shopping features and capabilities to support the surge in demand. This is creating new channels and opportunities for retailers to easily reach shoppers and provide them with unique, engaging experiences.
But these opportunities are not without their challenges. Higher shopper expectations mean retailers need to work harder than ever to win consumers’ attention and share of wallet. Fortunately, technology is evolving at an equal pace — and leveraging the right tools will enable them to unlock growth.
How has the pandemic played a role in accelerating the transformation of the industry?
The agility and convenience of shopping on social media had already made it a popular alternative to e-commerce and brick-and-mortar in recent years, but the pandemic has played a huge role in accelerating the growth of this format. The closure of physical stores amidst Covid-19 restrictions saw consumers flocking to online mediums for all their shopping needs.
Those who weren’t already selling via online channels had to quickly pivot towards a digital-first strategy, while those who did have an online presence began to look at new, innovative ways of engaging with their customers. These shifts in shopper behavior are here to stay. For brands, the key to success is to focus on ways in which they can continue to engage and hold the attention of their customers through emerging digital platforms and channels.
Which of these trends are the most crucial for brands to note & take action on?
Our research found that not only are consumers buying in higher volumes and more frequently on social media, they’re also exploring newer shopping categories. Social commerce is no longer restricted to categories like clothing, beauty, and electronics.
Pandemic-induced lockdowns and restrictions across Southeast Asia have prompted more people to turn to social media for essentials, including food and beverage (F&B) and grocery shopping.
In fact, the latest report by Facebook, Bain & Company found that groceries were the fastest growing online shopping segment in the region for this year.
As the landscape continues to evolve, opportunities are emerging in new and underpenetrated sectors. It is imperative for brands to keep an eye on these changing trends and adapt quickly in order to achieve success in the new shopping world. In fact, retailers who are quick to make shifts are already reporting tremendous success.
What does the future of retail look like (bearing in mind these new trends)?
The retail industry is undergoing a massive shift right now. As physical retail came to a standstill amidst global restrictions and lockdown orders, online shopping thrived. Trends like social commerce and live-selling are growing at an exhilarating pace — and this is only going to intensify.
The rules of retail are changing, which means that brands and sellers must either adapt now or lose out. The key to success lies in adopting emerging technologies and providing consumers with new and unique experiences. It is crucial for brands, retailers, and even individual sellers to start looking at social commerce as a long-term sales solution instead of a short-term gimmick. They need to be willing to invest in a growing array of value-adding technologies to lay the foundations of a robust strategy.
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