Facebook, Line bet on social commerce

Social commerce has seen 15-20% growth per year, on par with the growth in e-commerce.
Social commerce has seen 15-20% growth per year, on par with the growth in e-commerce.

Social media giants Line and Facebook are ramping up efforts to attract merchants and offer new features to boost shopping experiences in order to drive growth in the country’s burgeoning social commerce market, valued at 160 billion baht.

“The pandemic is driving merchants’ shift to online channels as evidence shows an uptick of new sellers on Line Shopping,” said Lertad Supadhiloke, head of e-commerce at Line Thailand.

More than 7 million users are engaging with Line Shopping, a two-fold increase from last year, he said, noting there are around 200,000 merchants on the platform currently, a seven-fold surge from April 2020 to April 2021.

Online merchants on Line Shopping earn 150,000 baht to 500,000 baht a month, a 272% surge from last year.

In 2021, social commerce is expected to make up 60% of Thailand’s 270 billion baht e-commerce market.

Social commerce has seen 15-20% growth per year, on par with e-commerce’s growth.

Mr Lertad said social commerce presents a prime opportunity for businesses reeling from the new round of lockdown. Many micro-businesses are also joining Line Shopping.

Line is also looking to assist small businesses in overcoming this difficult time and ensure they rely less on e-marketplaces, he said.

Line, which has a total of 49 million users in Thailand — all of whom are potential buyers — plans to release new features to help merchants gain insights and reach customers more easily, he noted.

It is also supporting merchants with payments, logistics and chat systems for a better shopping experience, according to Mr Lertad. No commission fees are being applied to merchants joining Line Shopping as revenue can be earned through advertising.

Line recently announced a collaboration with Thailand Post for parcel delivery service, starting at 19 baht.

Popular items sold on Line Shopping are mostly in the segments of fashion, health and beauty, food and beverage, home appliance and IT.

Some 80% of shoppers rely on bank transfers to make payments while the rest pay through credit cards and Rabbit Line Pay.

“Line Shopping can be a social commerce platform that enables merchants and brands to connect with their customers in line with the Direct-to-Customer [D2C] trend,” Mr Lertad said.

Meanwhile, a new feature in the pipeline, known as Line Social Graph, will help foster more engagement between shops and users.

Facebook also recently launched Facebook Shops in Thailand, empowering business owners to easily set up online stores on Facebook and Instagram.

With over 1.2 million monthly active Facebook Shops and over 300 million monthly visitors globally, Thai businesses can gain more exposure to both local and international customers, according to Prae Dumrongmongcolgul, country director of Facebook Thailand.

“We also expect a rise in cross-border commerce in the future as conversational commerce allows businesses to connect with overseas customers,” she said.

Facebook, she said, is developing new technologies such as Application Programming Interface (APIs) for Messenger and Instagram to make it easier for businesses and customers to converse.

Tools such as Instagram Visual Search for Shopping and Augmented Reality ads will encourage people to “try-on” products, said Ms Prae.

She said 63 million people access Facebook every month in Thailand and more people are gravitating towards online shopping.

Based on a survey by Facebook and BCG, eight out of 10 Thai Gen Z and millennials prefer to contact businesses via messaging apps and four in five Thais said they feel closer to businesses after interacting with them through chat.

This reflects consumers’ growing interest in immersive shopping experiences that invites participation and foster connections, she said.

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