The Meteoric Rise Of Social Commerce In SEA

Social commerce, a subset of e-commerce, accounted for half (44%) of Southeast Asia’s U$109-billion e-commerce market in 2020 and became the second most preferred shopping method in the region after e-commerce, according to data by Bain & Co., overtaking traditional retail buying.

A recent report by iKala titled ‘Riding the Pandemic Wave & Beyond’ revealed that e-commerce (D2C and marketplaces, 91%) still remains the preferred channel for shoppers in Southeast Asia, but is now closely followed by social commerce (78%), far ahead of traditional retail (35%), the report states. 

In the first half (H1) of this year alone, orders and Gross Merchandise Value in SEA’s social commerce sector jumped 102% and 91% year on year, respectively. The report surveyed 1600 social shoppers and more than 23,600 social sellers in Thailand, Malaysia, the Philippines, and Singapore during H1 of 2021.

About 42% of shoppers surveyed used social media to purchase 1-2 times monthly, while 35% use it to shop more than 3 times a month, iKala said. Revenue per order rose 88%, showing that consumers are spending more on social media. Ikala CEO and co-founder Sega Cheng believe that social commerce has earned a permanent place in regional shoppers’ habits due to its ease, convenience, and accessibility.

The study, however, unearthed challenges in social commerce, foremost of which are high shipping fees (51%), no return and exchange policies (41%), and a lack of customer service (34%). Differing payment modes also add to the challenge, as buyers in Singapore and Malaysia prefer credit cards and digital wallets respectively, while Thailand and the Philippines prefer cash on delivery.