Southeast Asia is a burgeoning market for social commerce with about 30 percent of online sales in the region happening through social media in 2016.
New data from consulting firm Bain & Co. published in the Wall Street Journal, social media websites, such as Facebook and Instagram, are attracting 150 digital consumers in the region into e-commerce by using messaging tools and introducing shopping features.
Compare those statistics with the U.S., where only 7 percent out of the 287 million Internet users are likely to purchase something from social networks, according to market-research firm GlobalWebIndex.
The success of social media sites as an e-commerce platform in Southeast Asia is due to small to midsize enterprises, trend in the global smartphone market and a fragmented e-commerce landscape.
Buyers across the region usually stumble upon products on Facebook or Instagram, then contact the seller via messaging apps such as Line or WhatsApp to find out more information, and proceed to checkout in person.
Nadia Tan, head of Facebook’s small-medium businesses unit in Southeast Asia, told the WSJ that Messenger is one of the main reasons social commerce is growing in the region.
Users in Thailand, for example, send twice as many Facebook messages to companies every month as the global average.
Small and midsize businesses in the region depend heavily on social commerce because it is the cheapest and most convenient way to promote their products; online marketplaces usually require transaction fees.
Facebook expanded Shop — which helps entrepreneurs who already run business pages on the platform — to other markets in August.
With Shop, buyers can view photos of products being sold on Facebook, including T-shirts and sewing machines, and then use Messenger to chat about the sale, get directions to the store in real life or buy on an official website.
While Facebook does not reveal how much revenue it receives from online shopping, it said that the top markets where Shop is used most often include Thailand, Vietnam, Indonesia, Malaysia and the Philippines.