Of all the forms of eCommerce, few have evolved as interestingly as social commerce. The term refers to the promotion of goods and services through social spaces and platforms. It involves the purchase of a product through a social network and encompasses the entire ecosystem where it takes place. Users posting photos of their products, companies sharing links to their products and latest releases, and influencers promoting products all fall under the concept of social commerce

Social commerce in Southeast Asia is no exception. Several market firms have evaluated the region’s immediate potential and long-term ramifications of social commerce trends. One study of over 15,000 respondents across Vietnam, Malaysia, the Philippines, Thailand, Indonesia, and Singapore, led by market intelligence firm, Cube Asia, launched in early December of 2022. The insight provides a grounded perspective on social commerce in the region. The Cube also included primary research, web crawling of terms, articles shared within the last seven years, and interviews with key stakeholders and sector experts. The report’s key findings are shared below.

Evolution of social commerce

Previously, eCommerce firms and social networks were two separate entities. Social networks were where brands would attract users and then lead them to an eCommerce platform, to finalise the sale. The pandemic was pivotal in speeding up the interaction between these retailers and consumers. With users forced to stay inside or reduce visits to bricks and mortar stores, the added value of online customers became vital to brands’ relevance and positioning within the market. Lockdowns drove demand up, forcing networks to create spaces where the customer journey would be shortened. 

Social networks have enhanced their social commerce presence, with Facebook Marketplace becoming akin to Craiglist, and Instagram offering added value to the shopping experience.

Key findings of the Cube study

The Cube study located four fundamental archetypes to consider when engaging in social commerce: social platform commerce, conversational commerce, live shopping, and community group buying. These four archetypes’ combined gross merchandise value is around USD 42 billion, almost a quarter of all the approximate eCommerce value in Southeast Asia.

Social platform commerce is the integration of eCommerce within the platform itself, cutting out intermediaries. TikTok has adapted its platform to include a payment process within its website, with brands like L’Oréal in Thailand enabling users to shop within TikTok. This service is currently available in the US, the UK, and six Southeast Asian countries, highlighting the commercial importance of the region on a global scale. Only TikTok has a fully integrated payment platform on its website. Other networks rely on external services such as Shopee

Conversational commerce relies on a two-way conversation between a seller and a buyer, offering a higher sales conversion rate. It is a critical element of the sales funnel, as it answers clients’ questions in real-time. The top applications for conversational commerce right now are WhatsApp and Facebook Messenger. The Cube study indicates that these two apps contribute to nearly 50% of all conversational commerce transactions in Southeast Asia. 

The drawback of conversational commerce is that it requires a high average order value to be truly profitable. While the transaction might be successfully carried out, the unit economics are an issue, particularly if human resources are being allocated to optimise the sale. Many firms are implementing AI chatbots to reduce the unit economics behind conversational commerce.

Live shopping and group buying trends

Influencers have a solid stake when it comes to live shopping. This strategy is all about the “touch and feel” and “show and tell” experience an influencer has with an audience. These promotional and sales events occur in real-time, where a seller demonstrates a product to a group of viewers and responds to the customers’ questions. This format is prevalent in the beauty, electronics, fashion and appliance sectors, where the product’s reliability is highly valued. The key technology providers for this type of commerce in Southeast Asia are Be.Live and Singapore-based Upmesh. 

Finally, community and group buying are archetypes that rely on trust. A regional example of a group buy platform is Singapore-based WeBuy. The company launches a deal, then group leaders broadcast it on Whatsapp, and buyers purchase the products on the WeBuy website. They are then delivered to the group leader’s house for collection or distribution. This model relies heavily on logistics and supply chains but permits the expansion of the product to lower-tier cities. 

The findings in the Cube Asia study relate specifically to social commerce in Southeast Asia. While this overview has provided a bird’s eye view of the report, there is much more to discover from an operational standpoint in the report. With key insights and additional takeaways for each of the four archetypes, it is a valuable document showing a clear blueprint of regional social commerce trends.