iKala Future Talks

Social Commerce for Good

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. 

Source: The Rise of Social Commerce in Southeast Asia, iKala


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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CEO Insights

Social commerce is rewriting the rules of retail—and businesses must respond

It was late February when the team at iKala noticed a pattern—people in Southeast Asia were using social media to shop more, and they were shopping for more. But none of us could have predicted the accelarating change of pace in 2020, and the year's not even over yet.

To understand the many changes in the landscape, iKala conducted a study over the first two quarters of 2020. On the two key parameters of orders and gross merchandise value (GMV), we found a sharp increase of 115% and 306%, respectively, compared to the same period last year. We saw another emerging trend accelerated by the pandemic: the remarkable rise of live-selling, which rose 13%, due to rapid growth in Singapore and Thailand, and more frequent shopping in Vietnam and Philippines. 

To address these consumer shifts, retailers must act quickly. But many are wary or thrown off because responding to these changes entails reimagining the business, which is often easier said than done. So, how should an organisation approach social commerce?

Take a customer-centric approach

At iKala, we recommend retailers take a customer-centric approach to social commerce, especially when selecting platforms to connect with their target audience. Brands must also consider local audience preferences and platform penetration rates when deploying their social commerce strategies. 

In Asia (barring China), Facebook is a key platform for merchants to sell their products, followed by Instagram and Whatsapp. It is for this reason that iKala's Shoplus focused on building social commerce AI solutions for Facebook, the most widely used social platform. 

As a first step, repurposing social pages is an easy and readily available option for a sales channel. Businesses can reach their existing audiences by leveraging already established social media pages, such as their Facebook page, and turning it into an online shop. To run the shop effectively, retailers can then adopt add-on tools such as iKala's Shoplus to create a seamless experience for both the retailers and their customers.

Invest in value-adding technologies

As social media companies add new capabilities to support social commerce, retailers must find ways to make live-selling interactive and seamless. Early adoption is key for brands wanting to keep up, but doing everything at once may not be possible, especially for smaller retailers. 

Instead, start by investing in social commerce capabilities—including real-time predictive analytics, AI-powered order management solutions, social CRM, and high-quality lighting and audio-video equipment. A good example of how to do this successfully comes from Loonnystore, a Thai-based fashion clothing brand has found great success with implementing AI-enabled tools to create an effective and engaging social commerce experience. The company, which was used to doing live streams by manually tracking comments and orders, switched over to Shoplus' AI-driven solution and saved up to 8 hours of manual work, which in turn, led to a 20% increase in orders. 

Treat it as a long-term investment

Although social commerce is gaining popularity quickly, the field knowledge that we have about this promising new sales channel is still in the early stages. With huge amounts of unstructured data being collected, there is a need for a proper social CRM and order management system to integrate all the information and identify key trends. 

It is essential 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. Be willing to experiment with the growing array of social shopping technologies, lay the foundations of a robust strategy and overcome friction points.

Social commerce might be a trend that was accelerated by the pandemic—but we can guarantee it's one that will last well beyond the end of COVID-19. For retailers, the opportunity is theirs for the taking. 

Learn more about social commerce in Southeast Asia: