ANN/THE JAKARTA POST – Latest study forecasts social commerce to directly influence 25 per cent or USD42 billion of annual e-commerce sales in Southeast Asia by the end of 2022, the majority of which happened on social media platforms such as TikTok, Facebook and Instagram.
The inaugural report titled Social Commerce in Southeast Asia 2022 was released on Wednesday by Cube Asia, a market-intelligence company offering granular-market data, competitive insights and cost benchmarks for online retail in Southeast Asia.
“Social commerce trends are making (e-commerce) space more complex, leading different brands to ask the same questions about social commerce – ‘How big is it? Is it a viable channel for our brand? Is it profitable? Which platforms can help us scale it up?’,” read the report. The report categorises the whole social-commerce segment into four archetypes, which are not mutually exclusive – live commerce, conversational commerce, community-group buying and social-platform commerce.
The latter contributed the largest figure in the Southeast Asia region with USD34 billion and this archetype refers to any form of sales activity that occurs directly on social media platforms, whether it is live shopping, conversational commerce or community-group buying.
The report said social-platform commerce in Southeast Asia can grow by around 20-30 per cent of the compound annual growth rate with a value of around USD85 billion to USD125 billion in five years.
Thanks to its various distinctive features and solutions, TikTok is currently leading the market, despite how Facebook and Instagram had a relatively massive head start.
However, Facebook was traditionally the goliath when it comes to live commerce; that is, until Meta, its parent company, removed the feature in October this year, a manoeuvre which experts believed to be Meta’s effort on making Instagram its ultimate stop for live commerce.
The live-commerce market itself has been reverberating loudly given how it grew by more than tenfold in 2022 alone to a respectable size of USD13 billion, with Vietnam and Thailand the most-active audiences. According to the report, 55 per cent of the traction takes place on social media platforms and the rest was carried out elsewhere.
Meanwhile, conversational commerce transpires on social media platforms exclusively; it is essentially a transaction where customers select a product and pay directly on a messaging app.
The value of Southeast Asia’s conversational commerce stands at USD12 billion, although the report states that it indirectly affects a much larger volume of USD500 billion through web chat, and USD200 billion for online-to-offline transactions, meaning they initiated the transactions online and complete the purchases in brick-and-mortar stores.
Community-group buying, on the other hand, takes place on social media platforms 50 per cent of the time, with the other 50 per cent on other platforms. Despite its low market share of just two to three per cent in the social-commerce segment, the transaction value in this archetype still amounts to USD5 billion.
