Social commerce in Southeast Asia
Writing about news from young Thai e-commerce startup Shopspot got me thinking about e-commerce, and in particular ‘social commerce’, in Southeast Asia.
It’s pretty basic but fascinating stuff.
For a range of reasons, which vary by country but loosely include a lack of access to payment gateways and unique social cultures, consumer-to-consumer marketplaces like eBay haven’t taken off in the region. But e-tailers – small business owners who sell via Etsy-like Web-based 'shop fronts’ – have long been successful and the seeds have blown over into social.
In Thailand, for one example, women can buy dresses or other items via Facebook.
The actual process is clunky and crude, but it shows that social networks and mobile are platforms for engagement, and that people here have a real desire to buy online.
Most commerce is personal, that’s to say that merchants run regular Facebook accounts and 'friend’ their customers. They tap into the viral nature of the service to help pitch their products; tagging customers in photos that they think will interest them or their friends to help gain visibility.
Once a customer wants to buy an item, the seller will provide their bank details and request payment via transfer (credit card ownership is comparatively low). When the buyer completes the transaction, the item is sent over.
Mobile messaging services like Line, which recently hit 10 million downloads in Thailand – 100 million worldwide – are also popular for commerce. Once a merchant has connected with a customer, the app becomes a direct channel to pitch products or offers.
Shopspot is interesting because it’s trying to create a 'friction-less’ platform for these merchants and buyers to use. Even though that makes sense, I think it has a tough job on its hands since this 'social commerce’ model has evolved through convenience (happening over services used daily) and scale (Facebook is approaching 20 million users in Thailand, Line is also huge).
Given that many of the issues are logistical, another approach is to go beyond credit cards and bank payments. VC-backed mobile payments startup Coda Payments just went live with an operator partner in Indonesia, turning any mobile into a payment terminal using SMS and carrier billing – that’s a concept with much potential.
Related: Don’t build another Twitter or Facebook says Aulia from Indonesian tech blog DailySocial, instead think about how they are being used in emerging markets.