Social Commerce: What It Is and How to Generate Sales Using Social Commerce

Social Commerce: What It Is and How to Generate Sales Using Social Commerce

Over 60% of Southeast Asia’s 150million online users shop online. Though most online sales take place on e-commerce websites, 30% take place on social media. More and more people are making sales using social commerce.

Bain & Company explains:

…social sales comprise up to 30% of the volume of all transactions. A common scenario: A consumer interested in buying a product connects with a seller on Facebook, agrees to make the purchase and then arranges for payment and delivery on a peer-to-peer basis.

There’s a lesson in the comment from one Thai consumer interviewed for our survey: “I bought my tea on social media because it’s a small-batch production and I enjoyed interacting with the seller. If I had seen the same product on an e-commerce website I wouldn’t have bought it.”

This means that 1 out of 3 of your customers are buying through social media. So even if you have set up an e-commerce website for your business, you may still be missing out on at least 30% of online sales if you ignore social commerce.

Some of us may already be familiar with social commerce. But there are others who are new to social commerce and need help understanding what social commerce is about and how to use it for their business.

In this post, I hope to explain to you what social commerce is and how you can generate sales using social commerce. If you are already familiar with social media, the steps in this guide will be easy to understand and apply.

By the end of this post you will know more about social commerce as a way of selling your products or services than most businesses.

Are you ready?

Let’s begin!

First things first, what is social commerce?

Social commerce is described as

‘a subset of electronic commerce that involves social media, online media that supports social interaction, and user contributions to assist online buying and selling of products and services.’

You may not be familiar with the term ‘social commerce’, but you or someone you know may have already engaged in it.

Let me give you an example:

Say your phone is broken and you want to replace it with a second-hand iPhone 6 that is still in good condition.

You go to your local Facebook group to look for people who might be selling their phone. You find two people who have posted photos of their phone for sale. You contact them through by sending them a message on Facebook or through a phone number they have listed.

After seeing both phones you decide to buy from one of them.

This the process of buying and selling, where you contact the seller through social media and then makes a purchase is known as social commerce.

This is only one way that social commerce can happen.

Social commerce can take place on Facebook, Instagram, Line, WeChat or any other social media platform that is prevalent in the region.

Social commerce is not the same as using social media to create brand awareness for your business. In social commerce, customers buy directly from you on social media.

Why is Social Commerce popular in Southeast Asia?

Southeast Asian are one of the most active social media users in the world, spending at least 2 hours on average a day on social media:

social commerce time spent on social mediaSince they are already on social media most of the time, they naturally become exposed to and buy from the businesses who advertise there.

But that is not the only reason.

Social commerce is also popular in Southeast Asia because:

  • It is easier to interact with sellers: e-commerce stores often require you to fill up a form before contacting them.

    On social media, buyers can click on one button to send a message to a seller. Buyers can often get a faster reply on social media compared to e-mail. Sellers can help buyers with their concerns before buying. This can lead to faster sales than traditional e-commerce.

    Buyers can even ask to see a product in person before buying, as in the example earlier.
  • Payment methods are less rigid: when buyers are able to interact with sellers online, buyers can make informal arrangements on how to make payment. This is important because in most parts of Southeast Asia, people still do not trust online payments.Instead, they prefer to pay by Cash on Delivery (COD) or bank transfer. This option may not always be available in e-commerce stores. Or even when it is, buyers may trust sellers they can talk to in real time
  • Reviews from other buyers: social media has become a popular way for customers to write a complaint about a business.

    When buyers can see these reviews, they feel more powerful to make a decision. Other than that, being able to see reviews from other customers make buyers feel safe when making a decision.
  • Better customer service: buying from a business that has a strong social media business presence means that their social media reputation will matter a lot to them.

    This is beneficial to customers. They can file a complaint for poor service. Instead of having to write an e-mail.

Now you know why Southeast Asians buy on social media directly, let’s look at how you can create a social media strategy that encourages social commerce.

How to start generate sales using social commerce

Step 1: Find out which the most popular social media platform is

The most popular social media platform is where most people in your country is at. By placing your business in that platform you will be able to expose your business to more customers.

This way, you have a way higher chance of generating sales using social commerce.

In Southeast Asia, Facebook is still the most popular social media platform. Over 30% of Southeast Asians are on Facebook:

digital-social-mobile-in-southeast-asia-in-2015-17-638

If you are a business trying to reach your customers online, you can reach most of them using Facebook.

You probably already have a Facebook account. But if you don’t it is easy to create one:

Screen Shot 2016-07-30 at 2.44.54 PM

Once your Facebook account is ready, let’s move on to the next step.

Step 2: Create a social media presence that makes it easy for people to buy from you

Though most Southeast Asians use Facebook, not all use it for social commerce. If you have never sold anything on Facebook or any other social media platform before, the steps in this section will be useful to you.

But first, let me explain to you how social commerce takes place in Southeast Asia.

There are two ways social commerce takes place in Southeast Asia. The first way is informal.

The informal process goes like this:

  1. A seller posts a photo of the product with a description in a Facebook group or page.
  2. A potential buyer sees the post and sends the seller a message, creating an interaction. Buyer asks seller questions about the product. Seller addresses them.
  3. If the buyer is sold on the product, buyer and seller agree on a payment and shipping method. Payment method can be using bank transfer or cash on delivery (COD).
  4. A. In the case of bank transfer, buyer pays seller using online bank transfer or goes to the nearest bank to bank in the amount.
    B. For COD, buyer and seller arrange to meet at a location. The product is traded for money on the spot.

The other way people buy on social media is in a more formal way. The process goes like this:

  1. A seller sets up a Facebook store on their Facebook page.
  2. The seller lists all their products on the page.
  3. A potential buyer sees the products on the Facebook store and uses Facebook’s ‘Buy’ button to buy directly from the store. This works just like an e-commerce store.

With these two options available, which should you go for?

In Southeast Asia, people still prefer to buy on social media using the informal way. So the best way to start is by focusing on the informal way of social commerce.

Now, let me show you how you can start your own business on social media.

Here is how to start:

Step 1: Create a Facebook page

It is easy to create a Facebook page. Just look for the ‘Create Page’ link on your sidebar.create page facebook
When you click on the link, you will get to this page:
page type
Let people know you are a business by selecting ‘Local Business or Page’ or ‘Company, Organization or Institution’.In the example below, I have selected ‘Company, Organization or Institution’.

When you select that, you will be asked to choose your business category.I chose ‘Retail and Consumer Merchandise’ and named my business ‘Wedding Gifts Central’:
page type
After that, you will need to describe your business. Here I have given a description of my Wedding Gifts business:
page description
Next, put a profile picture for your page.
Here I have used a generic photo of wedding gift boxes. But if you can, use a logo of your business. But no matter what picture you use, make sure it is a high quality one.
facebook profile picture pageThe next two steps are ‘Add to Favorites’ and ‘Preferred Page Audience’. For now, you can skip these two steps.

Step 2: Upload your product pictures and descriptions

Once you have created your page, you need to start uploading your product pictures and descriptions.The best way to do this is by creating picture albums.

Each album will be for a different product category.Let me show you an example of a business that has done this:Purple Borong Kosmetik
Purple Borong Kosmetik is a business based in Shah Alam, Malaysia that sells cosmetics and beauty related products.

By classifying their products into albums, they make it easy for their customers to find products.

They also provide pricing information on their product description pages, like this:
product page example
Depending on the products you sell, you may or may not need to write long descriptions. If you are selling products people already know, then price is the most important information they need.

If you are selling something people are unfamiliar with, you might need to spend some time explaining the features and benefits of the product.

Step 3: Make yourself look credible

The last but most important step is to make yourself look credible.The sad but honest truth is that many people still get scammed online.

To let your customers trust you, you must show that you are credible.

For the case of Purple Borong Kosmetik, they do this by displaying their contact information, website and business registration number:purple borong credible
To improve your credibility, you can also display screenshots of your customer testimonials on your page, like what the charcoal soap seller Noir Et Blanc Malaysia has done:
Screen Shot 2016-07-31 at 1.16.26 PMWhen you first start, you may not have many testimonials to show.

But as you continue to grow your business, you will be able to post more testimonials on your page.When your potential customers see the testimonials, they will know you are a legit seller. This way, more people will buy from you.

Step 3: Promote, promote, promote

After you have created your page, the next thing you need to do is promote your page.

Promoting your page is a way to let many people know that you exist. If you create a page but never promote it, no one will buy from you, even if you have the best products in the world.

Here are some useful resources where you can learn how to promote your page on Facebook:

Facebook Advertising Made Simple: A Step-by-Step Guide

7 Psychological Insights That Will Help You Develop a Powerful Facebook Strategy for Business

Facebook Advertising: The Social Commerce Lifeline for Small Businesses

By following the guidelines in these resources, you should be able to get more people to see your page and buy from you.

Conclusion

Southeast Asians are one of the most active social media users in the world. They use social media to keep in touch with their friends and to be updated on brands they like.

But that’s not all. For more than 30% of Southeast Asians, social media is also where they shop. Unlike e-commerce websites, customers can talk to their sellers in a casual and direct way.

Knowing this, you may now consider using social commerce as a way of increasing your business revenues. To be effective in social commerce, you need to show your potential customers that you have what they are looking for and you are someone they can trust.

Once you have done that, you need to promote your business page. This will get your business in front of your potential customers. Depending on your budget, you can do this using paid or organic marketing.

By following these steps, you will be able to create an extra revenue channel for your business using social commerce.

Does your business have a social commerce channel? What are your best practices?

 

Lu Wee is the Founder of The Entrepreneur Campfire. The Entrepreneur Campfire (TEC) is where smart entrepreneurs in Southeast Asia gather. You can find practical articles on how to grow, market and scale your business on TEC.



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