We take a look at the way major players and start-ups leverage the power of social commerce to deliver Asia’s retail future.
Over the last decade, e-commerce has taken the world by storm.
Following the global rise of technological access en masse, retailers have taken to the digital realm aiming to carve out their own stake in the latest commercial frontier. Retail giants such as Amazon and Alibaba dominate global retail sales, with an increasing trajectory moving forward.
In Asia, e-commerce players are privy to one of the largest and most diverse spheres of opportunity across the globe. The rapidly developing regions are becoming hubs full of disruptive companies selling all kinds of products, from fashion and electronics to cosmetics and houseware, catering to a highly tech-savvy customer base.
With monthly visitors estimated at around 2.4 billion, Amazon not only takes first place as the globe’s leading online retailer, but also in Asia. The company is supported by decades of experience in the industry working with retailers and is redefining e-commerce through offerings such as AWS (Amazon Web Services). AWS, a subsidiary of the company, provides on-demand cloud computing platforms and APIs (application programming interfaces) to people, businesses and governments, based on a metred pay-as-you-go basis. For retailers using AWS, the speedy and flexible cloud platform allows them to pour focus into creative and engaging experiences for customers, rather than focus on the technical aspects of e-commerce.
On top of this, Amazon has managed to breach into alternative markets, such as that of streaming video services with Amazon Prime, another realm of opportunity when it comes to product advertising.
Where Amazon is the largest e-commerce site, Alibaba is the world’s largest business-to-business (B2B) e-commerce platform. The Chinese giant accounts for over 80 percent of all online sales across its home country, offering in excess of 100 million products in 40 different categories.
With over 27,000 active sellers, Lazada is another popular choice within Asia. The e-commerce company attracts customers with its user-friendly experience and diverse categories, that can be dictated by filters to refine user searches. Lazada also boasts handy features such as website availability in multiple languages, bulk buying, and cash on delivery (COD).
Alongside the rise in e-commerce, the use of social media platforms has skyrocketed, and many companies have taken advantage of combining the influence of social media and the marketing of products to maximise sales internationally.
Today, most websites we visit request visitors to accept third-party cookies, to improve browsing performance as well as tailor adverts to user-specific interests or trends, often promoting desirable products; this is one of the many examples of how prominent e-commerce has become. This has dramatically increased when we look at social media and the variety of platforms that leverage advertising to bolster reach, influence and the mutual benefit of companies included.
Social commerce involves the use of social and online media in the context of e-commerce transactions, be this the assisted buying or selling of products or services and has been key to the growth of companies for over a decade.
With the rise in e-commerce sales, including the boom over the course of the COVID-19 pandemic, social commerce has seen enormous growth.
In the APAC region, the industry itself is set to adhere to this trend from 2022 until the end of the decade, following a recorded compound annual growth rate (CAGR) of around 34 percent from 2022 to 2028.
Countries including China, India, Indonesia and Singapore have each recorded substantial investments in the areas of internet and smartphone penetration, and supported by the digital boom, there is a major increase in social commerce across the region. Following this rise, there is an increase in start-ups entering the sphere, however, the market is still concentrated with multiple larger players holding the majority of market share, such as Facebook or Meesho in India, and WeChat in China.
In India, the social commerce space has already seen an influx in investment provided by individual investors, private equity (PE) firms and various venture capital (VC) funds. The difference between the e-commerce and social commerce markets is that the first is dominated by a few large players, such as Alibaba, whereas the latter is seeing many smaller start-ups popping up to stake their claim.
On top of this, a number of larger brands have also entered the space in India, such as Myntra, a major fashion e-commerce company. These companies have aimed to capitalise on the growing social commerce trend, utilising social media platforms in India’s nascent market.
Within this latest frontier of e-commerce, it is vital for companies to remain flexible, adaptable and customer focused in order to succeed in a market made up of international giants and energetic start-ups. In the social commerce space, it is creativity that becomes a keen tool to disrupt the market with new features and stand out.
An example of this was the revamping of platforms by the Facebook (Meta) family in 2020, including Pinterest and Instagram. These platforms helped improve social commerce by adding further tools for sellers, helping to streamline shopping experiences for customers, and providing the ability to improve the viewing and new storefronts, as well as the number of visitors increased via paid advertising.
In light of the COVID-19 pandemic, many businesses shifted to the digital realm and to e-commerce, fuelling growth in the sector over the course of 2020 while maximising exposure on social media at a time when online communication was at an all-time high. Now that these companies have realised the potential of e-commerce on the whole, the foreseeable future of retail remains digital.