Conversational commerce is on the rise worldwide because it positively impacts businesses, customers, sales, and revenues. It involves two-way interactions between buyers and a company, and those conversations may continue throughout the sales funnel journey. VIMOS, a WhatsApp automation solution for online and offline sales, lists several benefits of conversational commerce:
- After-sales service
- Guiding customers through the product consideration stage
- Boosting sales conversions
- Enhancing customer experiences
- Building long-term relationships
According to research from Statista in cooperation with Juniper Research, global spending on conversational commerce will reach USD 290 billion by 2025, an almost sevenfold growth from 2021’s numbers. Similarly, conversational commerce trends in Southeast Asia show the significant outcome of this approach. According to the Social Commerce in Southeast Asia 2022 report, social interactions will directly influence USD 42 billion in sales in the eCommerce sector by the end of the year.
Here are the top martech trends 2023 experts expect in Southeast Asia
The report was sponsored by the unified customer experience management platform, Sprinklr, and conducted by a Singapore-based market intelligence firm, Cube Asia. Researchers surveyed over 15,000 respondents across Singapore, Thailand, Malaysia, Indonesia, the Philippines, and Vietnam and also compiled data from public sources, interviewed experts, and reviewed company reports.
Cube Asia sought to address a couple of issues with its report. The COVID-19 pandemic pushed many people in the Association of Southeast Nations (ASEAN) to go online, significantly increasing the number of active users on social media. eCommerce had many opportunities to blossom in the region as more companies adopted digital solutions.
As a result, many eCommerce platforms started leveraging social media to boost their financial results—otherwise known as social commerce. Here are some of the key findings from the Social Commerce in Southeast Asia 2022 report:
Impacts of social commerce
This year, social commerce will contribute USD 34 billion to ASEAN. Real-time interaction with customers, community influence, authenticity, and trust all aided sales activities on social media platforms. The social media platform TikTok had a greater impact than Instagram and Facebook, despite both having an earlier start.
Some factors aiding TikTok were its growing user base, free shipping and cashback, and more engaging social commerce experiences. Furthermore, the company offered more teaching resources about selling on its platform than other social media networks.
Conversational commerce is on the rise
Conversational commerce contributes USD 12 billion directly to the region. It indirectly contributes USD 50 billion through interactions on web chat and USD 200 billion for online-to-offline (O2O) transactions. O2O happens when customer engagement begins through a messaging application and ends with the customer buying the product at a store.
It is a successful form of social commerce because it improves customer experiences, creates a window for feedback, helps answer customer queries, and confirms whether certain products are in stock. Confidence is high about conversational commerce’s vibrancy since it has grown through organic demand and has achieved high penetration and usage despite not being implemented effectively.
Various products and tools are aiding the growth of conversational commerce. They include text-based messaging, Application Interface Programming (API) integrations for communications, phone calls, live chat, voice assistants, artificial intelligence (AI) chatbots, WhatsApp and other instant messaging apps, email, video streaming, and more.
Increase in Live Shopping sales
Over the last 12 months, 44% of internet users in ASEAN have participated in live shopping sales. Thailand and Vietnam audiences led the way, with 60% of them making a purchase, but Singapore lagged behind, only getting about 35%. As a result of this engagement, live shopping sales in 2022 grew more than tenfold to reach USD 13 billion.
COVID-19 restrictions increased demand for product demonstrations on video and real-time online video engagement. Live shopping uses native platforms, social media, eCommerce websites, influencers, independent sellers, and retailers, benefitting from massive discounts of as high as 40%.
Scope and opportunities
Community Group Buying has a small market share of about 2-3%, making it the model with the smallest contribution to eCommerce. Over time, this model will take root as consumers find better ways of applying its potential to their daily activities. Community Group Buying can provide employment within communities through resellers, pool community money to buy products, unlock special deals, and look to uncover new markets.
As the report shows, conversational commerce is on the rise in ASEAN, bringing many opportunities to sell while giving customers positive experiences. COVID-19 affected society and how people interact, and there is a need to understand what kinds of experiences customers are looking for companies to deliver.
Conversational commerce trends in Southeast Asia are in flux. They could be improved upon by using analytics to review customer preferences, applying the feedback obtained from pre-sale and after-sale experiences, and using surveys after every interaction. There will also be more room for growth as new messaging technology emerges.