Watch out e-commerce, 'social commerce' gaining ground in Singapore
Watch out e-commerce, 'social commerce' gaining ground in Singapore and other Southeast Asia countries: Report
- More people are buying products online through social media platforms, like Facebook, WhatsApp and Instagram, a study has found
- They are also spending more per order, with fashion apparel being the top category of products purchased
- As a result, more social media platforms are rolling out shopping features to try to capitalise on the growing market in the region
- The study was conducted by AI solutions firm iKala, collating responses from 1,600 shoppers and 23,600 business customers in four countries, including Singapore
- Shipping costs and lack of exchange policy were among the concerns flagged by consumers
SINGAPORE — Online shopping through social media platforms during the pandemic continued to surge in the first half of this year as Singapore consumers shopped more often this way and also spent more on each order, a study found.
Compared with the same period last year, the number of orders using this relatively new online shopping option jumped 29 per cent and spending for each order leapt 89 per cent, the annual study by Taiwan-based artificial intelligence solutions firm iKala concluded. The report was released on Tuesday (Oct 12).
Known as “social commerce”, it is where shoppers buy products through social media channels such as Facebook, WhatsApp and Instagram rather than through e-commerce marketplaces such as Lazada and Shopee.
The practice has become more popular than physical retail stores or the websites of retailers, the report said.
The study’s researchers had surveyed 1,600 shoppers and more than 23,600 businesses, which are iKala customers, in Singapore, Malaysia, the Philippines and Thailand in the first half of 2021. The study did not provide a breakdown of the number of respondents in Singapore.
They found that 90 per cent of Singapore respondents preferred to shop via e-commerce platforms, followed by social media (73 per cent), retail websites (45 per cent), offline stores (43 per cent) and coupon websites (21 per cent). Respondents were able to express a preference for more than one option.
iKala's co-founder Sega Cheng said that Southeast Asians are among the most avid social media users in the world and have been spurred by the Covid-19 pandemic to shop on these platforms.
“Even as brick-and-mortar reopens, it’s become clear that social commerce is not a phase. The ease, convenience and accessibility of this format has earned it a permanent place in the way this region shops,” he said.
To meet this demand, the firm said that social media platforms have rapidly added new functionalities and features to support online shopping.
For example, Facebook, which owns Instagram and WhatsApp, introduced its online storefront feature, called Shops, to Instagram last year. The feature is also integrated on Facebook Marketplace and WhatsApp.
This year, it began trialling checkout capabilities in the application in the United States instead of redirecting shoppers to retailers’ websites.
Pinterest has also expanded its shopping list feature to more countries, and Twitter has started to experiment with tweets that include a “shop” button.
TikTok, too, has announced a partnership with e-commerce platform Shopify and is preparing to allow brands to showcase catalogues on the platform, the study noted.
1. Regional social commerce growth doubles
Across the four Southeast Asian countries, the social commerce market roughly doubled, with orders up by 102 per cent, gross merchandise value up by 91 per cent, and revenue per order increasing by 88 per cent.
The growth in social commerce in Singapore is somewhat weaker than the other three countries studied. Orders in Singapore grew by 29 per cent and gross merchandise value increased by 25 per cent.
However, revenue for each order went up by 89 per cent, indicating that Singapore shoppers are spending more on each order through social media.
2. Shopping frequency on social media
More than four in 10 Singapore respondents said that they shop using social networks at least once to twice a month, with 12 per cent doing so more than five times monthly.
Around 24 per cent said that they do so infrequently — less than once a month. That figure was 23 per cent across the four Southeast Asian countries.
3. Apparel most popular among shoppers
The most popular products bought through social media are clothes and accessories, with 70 per cent of Singapore social shoppers stating that they bought fashion products on these platforms.
This is followed by health and beauty products (55 per cent), electronics and appliances (49 per cent), household goods and homeware (48 per cent), food and beverages (43 per cent), groceries (38 per cent) and furniture (18 per cent).
4. Convenience, price key drivers of social commerce
Seven in 10 Singapore respondents said that they shopped on social media due to the ease and convenience, as well as lower prices compared with e-commerce platforms and retail stores.
Other respondents said that it was the variety and choice of products, familiarity with the brand or seller, the engagement experience such as live auctions and customer interactions, and their familiarity with shopping on social media.
When asked about the downside of social commerce, however, 37 per cent said that they did not like expensive shipping options and 33 per cent said that there was a lack of return or exchange policies.