Will social commerce stunt the growth of ecommerce in Southeast Asia?

Photo credit: elwynn / 123RF.

It is no surprise that social commerce is flourishing in Southeast Asia as Facebook and Instagram are among the most popular social networks where internet users spend up to 3.7 hours every day on average.

Add to that Asia’s high mobile phone penetration, the fact that Southeast Asians are reluctant to share their financial and personal information online, and less than 20 percent of the population (except Singapore) use either debit or credit card to make payments, and you have the success formula for shopping via social networks.

It is very likely while browsing Instagram or Facebook that you’ve seen sponsored posts from many unknown brands selling clothes, shoes, or something similar. There’s also quite a high chance a coworker bought that nice top she’s wearing from a Facebook “shop.”

But how does social commerce affect ecommerce overall? And why is social commerce so popular amongst Southeast Asians? To answer these questions, ecommerceIQ decided to test how social commerce works.

Social commerce: surprisingly easy

In social commerce, an order is usually made online while the payment is done offline. Merchants set up “shops” on Facebook or Instagram and post images and details of goods for sale. Shoppers browse and inquire about product availability and arrange a method of payment, typically a bank transfer, through a popular chat app such as Line in Thailand.

To find a reliable shop on social media, many browsers skim through popular forums like Pantip in Thailand. Based on popular word of mouth and recommendations, the ecommerceIQ team chose to test an Instagram makeup shop by @lachompshop.

The search for products takes place by scrolling through @lachompshop picture gallery on Instagram. We decided to purchase a MAC lipstick, which was surprisingly selling for THB 550 (US$15), THB 300 cheaper than in MAC’s official online store.

Social commerce is not all positive

Social commerce will boost ecommerce