Conceptual, social trading isn’t new – it’s been around in one form or another since people made recommendations to each other. Today, social networks are more powerful than ever, and startups and companies are innovating new trading models that take advantage of the wider reach available to us.
It’s important to understand the vague but persistent difference between social commerce and conventional e-commerce. While e-commerce strives for a direct, digital translation of physical browsing, social commerce refocuses the entire customer journey on people.
Social commerce doesn’t separate our shopping experiences from the rest of our lives; rather, it uses the power of community and connection to create opportunities in everyday life through social networks.
Globally, social commerce is on track to become a $1.2 trillion industry by 2025, with the biggest gains in Brazil and India. India’s current $2 billion to $3 billion social commerce market is estimated to reach $70 billion by 2030, empowering approximately 40 million small business owners.
However, the real growth story of social commerce is in Southeast Asia, where it is already worth more than $13 billion.
Using Social Trade to Promote Community Growth
The popularity of social commerce in Southeast Asia has been accelerated by the high penetration of mobile internet, a mobile-first generation that spends a lot of time on social media and a high level of engagement.
But the biggest driver of social commerce is the fact that this is a collectivist society. At the heart of Southeast Asian culture and approach to life is a community intertwined with the fabric of everyday life. While Southeast Asians are confident that they can succeed as individuals, they still appreciate the value of their traditionally collectivist society.
Image Credits: Kantar Global MONITOR 2019
Southeast Asians have a strong desire to be part of a community, and finding strong relationships is more important to them than their global counterparts. They use their networks for socializing as well as for transactions, and they are especially enthusiastic about peer-to-peer services.
And this sense of community influences the way they buy.
The social commerce model uses community leaders and influencer connections to generate sales by marketing directly to their friends and family. Through social platforms or a platform app, these leaders, acting as resellers, can order products at wholesale prices before being redistributed to their networks for a fee; although in some cases they can also earn a percentage of commission.
Image Credits: Kantar Global MONITOR 2019