How Social Commerce Drives Your Online Business in Asia Pacific

15 May 2015

Why You Should Read This

Every day, customers are looking for new ways to connect with brands. And as the number of social media users in Asia Pacific grows, brands are faced with a great opportunity to leverage this captive audience in the social space to drive online commerce in the region. This article discusses why Asia Pacific stands out when it comes to social media, key challenges and opportunities for brands looking to build their social presence online and some best practices for social commerce success in the region.

Social media has completely changed the way brands engage with customers, so it’s no surprise that the rise in social media usage in Asia Pacific (APAC) has had a significant impact on eCommerce businesses. In 2015 overall social media penetration across the region was significant and growing; Singapore led at 91%, followed by Taiwan (61%), Brunei (66%) and Hong Kong (66%)[1]. In the same year, social media users in Philippines (3.4 hours), Malaysia (2.8 hours), Thailand (2.6 hours) and Indonesia (2.4 hours) are found to spend the most amount of time on social media[2].

Why is APAC So Social?

The APAC region is increasingly connected; internet penetration has grown to 36%, a 14% average increase since 2014[3]. While not homogenous in terms of penetration rates, ever-expanding mobile networks have also brought more people into the online space; the region is home to almost 50% of global mobile users in 2014 and is growing consistently[4]. In 2015, APAC’s average mobile penetration rate hit 92%, or over 3.7 million subscribers[5]. The region’s social network penetration reached 27%[6], a strong indicator of how important social networking sites are as a key communication channel with consumers. Overall, there are more than an estimated 906 million social network users within APAC who mostly access these platforms through their mobile devices[7].

The Big Boys in the Social Media Playground

While global social networking sites remain prominent in the social media landscape, sites specifically catered to local markets are also key players:

  • WeChat – The largest messaging app service in China, WeChat offers services such as mobile payments, taxi-booking services and money transfers[8]. Companies can also place in-app advertising messages to direct users to external eCommerce sites.

  • KakaoTalk – South Korea’s most popular messaging app allows video-and photo-sharing[9], and facilitates direct digital marketing through many interfaces. FriendPlus, where users can become ‘friends’ with consumer brands, allows brands to push various content like coupons, product information and media files[10] to existing and potential customers.

  • Sina Weibo – A Chinese micro-blogging site similar to Twitter and Facebook[11] , Weibo presents a unique advertising model based on Key Opinion Leaders (KOL) or influencers. Brands can leverage KOLs to promote their products or services as part of their brand building strategy[12].

  • Line – A popular messaging app from Japan, Line offers secure payment, taxi-booking and food delivery services[13]. It has recently embarked on Line@, which offers special corporate accounts that allow businesses to directly communicate with their customers[14]. A new customer relations management initiative, Line Business Connect, also lets businesses target and customize messages sent out to followers on the platform[15].

  • Hipwee – A popular Indonesian social news site similar to Buzzfeed, Hipwee offers businesses a platform to connect with vast young audiences through native advertising or more custom editorial products that come off as less commercialized[16]. These articles also create earned media opportunities for brands when shared across social channels[17].

To stay relevant to the changing needs of users, brands are constantly innovating to engage with consumers in the social media space. It is now a must to have mobile-optimized social platforms and sites. Along with greater usage of mobile devices, many social media applications have also integrated local payment solutions so as to provide a seamless customer experience for users shopping on their channels. For instance, WeChat users can make payments through ‘mobile wallets’, which link their credit cards to the application[18]. Line also facilitates onsite transactions with retailers using securely saved user credentials.

Brands Riding the Social Commerce Wave

So how are brands using social media to drive sales in the region? For one of SingPost eCommerce’s clients, a Black Friday push-message was sent on social platform Kakaotalk to leverage its 100,000-subscriber base. As a result, the client’s total site visits increased from 11,637 to 20,110 – an almost 100% jump[19]. In 2015, Coca-Cola launched its first foray into APAC’s social commerce space through its ‘Share a Coke’ digital campaign. Fans were invited to share their experiences with the drink using the #ShareaCoke hashtag on social channels and were able to create and share their virtually personalised Coca-Cola cans[20].

Other brands were also quick to capitalize on APAC’s growing social commerce landscape. Having a strong social media presence in Indonesia, Lenovo utilizes social listening and campaign tracking to stay relevant in the eCommerce space[21]. As such, the company reached 23 million people by using Facebook to facilitate smartphone sales, while referrals to lenovo.com increased by 61%[22]. Starbucks also uses social media to widen its consumer base, where collaborations with social platforms such as Foursquare incentivise customers to check in at their local outlets[23].

For brands looking to build increased engagement with their customers, social media is indeed a great tool for connecting on a more personal level[24]. However, it is important to note that social media communication is a two-way street and requires significant planning and ongoing support. While social media platforms are in some ways “free” advertising, effectively reaching out to and engagement with your customers in the social space still involves advertising spend for sponsored content to get your posts in front of the right audience. Another key factor is the resources required to manage all social media platforms. Customers who do connect with brands in the social media space will expect greater engagement and shorter response times to their comments and questions, be it positive or negative, particular when commerce is involved. Customers would have urgent requests for deliveries or returns and having a dedicated social media or community management team is critical for brands to ensure that these expectations are met. Brands need to ensure that their online reputation is managed in a professional yet personable way so that they can maintain credibility and trust of their online customers. So what can brands do to achieve success in social commerce?

How to Succeed in APAC’s Social Commerce Space

Despite multiple success stories in social commerce, companies need to approach APAC’s diverse social media landscape with a thorough social media and content strategy that accounts for local consumer preferences[25]. These are some key consideration in formulating a strong social commerce strategy in APAC:

1. Take A Mobile-First Approach

Businesses need to develop and design their eCommerce space with a mobile-centric approach. With over 97% of social media users in APAC accessing their networks via their mobile in 2014[26], social media users are essentially mobile users. Most eCommerce Content Management Systems have a number of fully responsive design themes that allow you to create a site for any device.

2. Make Social Part of Your Business

Brands should integrate social elements into their business models. Retailers can seek to develop storefronts within social platforms, or utilize integration options provided by major social media sites. Visual platforms, like Pinterest and Instagram, can serve as virtual product showrooms to capture customer interest and meet inherent customer needs to obtain product information. Furthermore, various platforms such as Pinterest and Polyvore (an online community where members curate products from a shared product index to create collages) also allow users to curate and share personal social lists that can help retailers gain product or brand exposure, especially if the user is an ‘influencer’. Real-time social discovery features such as activity feeds and popular items can also allow other users to ‘discover’ products on social channels. After establishing a large base of engaged users, businesses can trial ecommerce initiatives such as exclusive social offers. With low barriers of entry and highly targeted audiences, social media channels can potentially derive high returns for businesses.

3. Integrate Ratings and Reviews

With 61% of consumers reading reviews prior to making purchasing decisions[27], there is an increasing dependence on product and brand feedback by other users. Thus, companies can enable ratings and reviews on their eCommerce channels, while ensuring a significant degree of moderation by having a customer review policy set in place. To encourage social sharing and product referrals, retailers can consider implementing a reward system that entail discounts or loyalty points. Such a reward system can be enhanced by Facebook’s Customer Open Graph to track users’ identities.

4. Develop Social Customer Service

Retailers need to be more customer-oriented. By providing an avenue for customer enquiries and assistance, one can greatly enhance customers’ post-shopping experiences. Nonetheless, as consumers reaching out to brands via social channels tend look for real-time responses outside business hours, failure to meet their needs can entail negative reviews or even loss of customers and sales. Thus, companies should ensure that sufficient resources are allocated to serving customers well.

5. Drive Cross-Channel Sales

Social media can also be geared to drive in-store sales. Depending on the type of retail business, social media can be used to push geo-localization offers, coupons and click-and-collect initiatives to promote traffic in physical stores.

6. Facilitate Direct Purchases Onsite

Some social media interfaces, such as WeChat, have implemented purchase links within their platforms that let users make direct transactions conveniently. This also gives customers the option to store their payment information for future checkouts.

Social commerce has seen rapid growth in recent years across the region. This upward trend has largely been fuelled by increased access to the Internet, as well as the prevalence of mobile network subscription and social media usage. While global social media platforms continue to remain popular, the emergence of major local players such as KakaoTalk and Sina Weibo has added diversity to local social commerce landscapes. As consumers today continue to demand greater interaction with brands in the social space, one thing is certain. In order to succeed in Asia Pacific, brands need to go social.

How SingPost eCommerce can help

SingPost eCommerce is a full service eCommerce enabler that provides global brands with Asia Pacific’s first end-to-end managed eCommerce solution which includes – Enterprise Grade eCommerce Technology, Warehousing, Delivery, Returns Management, Site Operations, Regional Customer Care and Performance Marketing. We operate across Asia Pacific with a fully interconnected eCommerce infrastructure and 22 distribution centres.

As part of the Singapore Post Group of Companies, our clients leverage on this extensive fulfilment and logistics network as well as our market knowledge across the Asia Pacific region including China.


Resources:

  1. http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-apac-in-2015
  2. http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-apac-in-2015
  3. http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-apac-in-2015
  4. http://wearesocial.net/blog/2014/01/social-digital-mobile-apac-2014/
  5. http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-apac-in-2015
  6. http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-apac-in-2015
  7. http://www.statista.com/statistics/233989/number-of-social-network-users-in-asia-pacific/
    http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-apac-in-2015
  8. Developing eCommerce Market Entry Strategies in Asia Pacific, Advisory Report 2015 (SP eCommerce)
  9. http://www.businessinsider.sg/how-to-use-kakaotalk-2014-1/#.VUco8MYxKlI
  10. http://blog.asiance.com/2013/06/11/1773/
  11. http://chinamarketingtips.com/most-effective-ways-to-promote-your-brand-on-weibo/
  12. http://chinamarketingtips.com/most-effective-ways-to-promote-your-brand-on-weibo/
  13. https://www.techinasia.com/line-dives-head-payments-taxi-hailing-ondemand-food-delivery/
  14. https://www.techinasia.com/line-unveils-line-and-line-business-connect-users-chat-with-businesses/
  15. https://www.techinasia.com/line-unveils-line-and-line-business-connect-users-chat-with-businesses/
  16. https://www.techinasia.com/hipwee-indonesia-media-online-buzzfeed/
  17. https://www.techinasia.com/hipwee-indonesia-media-online-buzzfeed/
  18. http://www.specommerce.com/asia-pacific-serving-consumers-without-credit-cards/
  19. Developing eCommerce Market Entry Strategies in Asia Pacific, Advisory Report 2015 (SP eCommerce)
  20. http://www.campaignasia.com/Article/396730,Coca-Cola+invites+Singapore+to+‘Share+a+Coke+for+SG50+local+nicknames+and+phrases+to+feature+on+cans+and+bottles+to+celebrate+Singapore.aspx
  21. http://www.slideshare.net/fortuneindo/lenovo-digital-campaign-by-fortune-indonesia
  22. https://www.facebook.com/business/success/lenovo-indonesia
  23. http://www.jeffbullas.com/2014/09/15/4-brands-cracked-social-commerce-code/
  24. http://www.kpmg.com/au/en/beyond/new-thinking/pages/social-media-risks.aspx
  25. Developing eCommerce Market Entry Strategies in Asia Pacific, Advisory Report 2015 (SP eCommerce)
  26. http://wearesocial.net/blog/2014/01/social-digital-mobile-apac-2014/
  27. https://econsultancy.com/blog/9366-ecommerce-consumer-reviews-why-you-need-them-and-how-to-use-them/

 

Marcelo Wesseler, CEO of SingPost eCommerce

Marcelo leads the eCommerce business unit for SingPost. He has more than 15 years of international experience in global eCommerce businesses and held senior management positions at KPMG Consulting, Hewlett Packard in the US, and RS Components. Prior to joining SingPost in 2012, Marcelo implemented businesses like hpshopping.com, sonystyle.com, mini.com, china.rs-online.com to name a few.