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Facebook chats power a new $48bn market in social commerce

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Social commerce reportedly accounted for about 44% of Southeast Asia’s $109bn e-commerce market last year.


Image: Gabby Jones/Bloomberg

Samantha Proyrungtong, co-owner of an artisan food shop in downtown Bangkok, keeps three phones and a laptop glued to Facebook and Softbank Group-backed Line’s social-media app throughout the workday. She needs them not to hear from friends and relatives but to get orders from customers since her shop, Vivin Grocery, relies on chat applications for a big part of its sales of goat cheeses, locally sourced jams and organic vegetables.

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Throughout Southeast Asia, consumers’ affection for haggling and interacting with businesses is fuelling a boom in social commerce. Unlike the US or China, where most consumers do their internet shopping with established platforms run by companies like Amazon.com Inc. and Alibaba Group Holding, in Thailand almost half of all e-commerce takes place through social media or chat rooms on Facebook, WhatsApp or Line’s app.

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Social commerce accounted for about 44% of Southeast Asia’s $109 billion e-commerce market last year, according to Bain & Co.

Customers can talk directly with store employees or the owners themselves about prices and sales, and the relationships built through personal conversations have helped drive social commerce’s popularity.

The rapid adoption of commerce via social media across the region could offer valuable lessons to internet giants like ByteDance Ltd. and Facebook’s Instagram, which are experimenting with the format as they try to disrupt the traditional styles of platform commerce.

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On a recent weekday afternoon, Proyrungtong received a message from a customer through one of the store’s official messaging accounts asking whether their double-duck sandwich was available. Proyrungtong messaged back to confirm the duck’s availability, quickly concluded the sale, confirmed receipt of payment via bank transfer and arranged a time for pick-up at the store, all via messages.

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“We saw the need to shift online and have a competitive platform that people can order easily off of,” she said, adding that managing customers can be challenging.

“You need someone who can accommodate your customers and know your product,” said Proyrungtong, “so it’s not just having the channels to sell but also people to take care of it.”

The pandemic has led global brands such as Chanel and Louis Vuitton as well as Thai brick-and-mortar retailers to register for accounts on Line, spurring a 25% annual growth in official accounts in 2020, said Norasit Sitivechvichit, chief commercial officer of Thailand’s most-used messaging platform, which charges retailers based on their messaging activity and number of followers.

“Chat commerce has become a disruptor,” he said. “Not just small and medium-size enterprises are conducting chat commerce on Line, but also global and local corporate brands.”

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Southeast Asian countries are natural places for the model, said Alessandro Cannarsi, a Singapore-based Bain & Co. partner. “The fact that these are very young, tech savvy populations, especially on mobile, and they’re very entrepreneurial, encourages social commerce,” he said.

Vietnam led the region, with social commerce accounting for 65% of its $22 billion online retail economy, compared to $4.2 billion in 2018. Social commerce revenue in Thailand grew from $3 billion three years ago to about $11 billion in 2020, half of the total e-commerce market.

The popularity of personalised buying experiences and human-to-human conversations in an online shopping setting has led traditional retailers to allocate resources to chat platforms as shoppers remain home because of the pandemic. Thailand’s government in April announced new restrictions on malls, requiring them to shut by 9 pm from May, to curb a surge in Covid-19 infections.

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“Because of Covid-19, it grew very quickly at a much faster pace than many other channels,” according to Pimnara Hirankasi, acting head of Analytics and Intelligence Research Department at Bank of Ayudhya Pcl.’s Krungsri Research. “Having a seller present to respond to customers’ questions builds engagement while also creating more confidence for buyers before making their purchases.”

In countries like India, the popularity of shopping through WhatsApp has led Reliance Industries Ltd. to target 20% of sales at its Hamleys toy stores through direct selling over the messaging application. The Facebook-owned messaging application added shopping carts into its chat rooms last year to court more merchants and tap onto its 2 billion user base to shop on its platform.

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A search for home decor, fashion accessories or tech gadgets on Facebook or Instagram will often lead shoppers to find businesses’ pages, wares offered and prices listed on social media profiles filled with carefully orchestrated photographs to make their pages look enticing, similar to a digital photo catalog or magazine.

Natthapatt Sooppapipatt, a 21-year-old Thai university student, buys clothes, collectible figurines and accessories for her dogs from small stores through Instagram, and likes the way she can communicate with a real person via the app. “Receiving bot replies like ‘we will reach out to you’ or ‘we are a bit busy right now’ makes me feel scammed,” she said. “I want to talk to a human, someone who can understand my wants and concerns.”

Unlike more established e-marketplaces, though, the chat applications on social media pages aren’t designed for commerce and don’t include payment systems, so customers need to use external payment methods, such as direct bank transfers or e-wallet services like Amazon Pay and GrabPay to finalize sales.

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The popularity of social commerce creates challenges for regulators. Independent vendors or individuals operating home businesses on social media platforms can offer cheaper prices in part because they often don’t include tax charges, and authorities have difficulty confirming that stores operating on social media pages pay the correct amount of tax, according to Sommai Siriudomset, a spokesperson for Thailand’s Revenue Department.

Proyrungtong expects social commerce to become even more popular with her shop’s customers. “All of them are on social media, making it absolutely essential to have social media presence,” she said. “ It has become a part of mainstream culture.”

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© 2021 Bloomberg

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Facebook-Meta Earns the ‘Worst Company of 2021’ Title in This Survey

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Facebook has had its share of controversies this year. The company was under more scrutiny after whistleblower Frances Haugen leaked a series of internal documents.

Facebook parent Meta has been named the Worst Company of the Year (2021) by Yahoo Finance respondents. According to the publication, an “open-ended” survey was published on Yahoo Finance on December 4 and 5, where 1,541 respondents participated. Facebook received 8 percent of the write-in vote, but respondents were seemingly mad about the Robinhood trading app as well. Electric truck startup Nikola, which was named last year’s worst company by the same publication also faced respondents ire.

Yahoo Finance notes, “Facebook has had its share of controversies this year.” Starting in January, Meta-owned WhatsApp got caught up in a huge controversy after the messaging app announced a new privacy policy (Terms of Service). WhatsApp said it would collect user information and share it with third-party apps for a better user experience. However, the app gave users no choice but later made modifications to the policy under pressure. Similarly, the company was under more scrutiny after whistleblower and former Facebook employee Frances Haugen leaked a series of internal documents showing the company’s problematic practices. It was revealed that Meta-owned Instagram had a negative impact on teenage girls, but the company did almost nothing to rectify the problem.

Yahoo Finance even highlights, “At the same time, some critics, including conservatives, say Facebook over-policed the platform’s speech and stifled their voices.” Critics also blame Facebook and other social media platforms for not curbing hate speech that led to Capitol Building riots.

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However, around 30 percent of Yahoo Finance readers said that Facebook or Meta could redeem itself. One respondent suggested that the company could issue a formal apology for negligence and donate a sizable amount of its profits to a foundation to help reverse its harm.

On the other hand, respondents chose Microsoft as the Company of the Year (2021). The Satya Nadella-led company touched the trillion-mark this year and introduced notable upgrades. The most notable is the Windows 11 OS update that succeeds Windows 10.

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Facebook pays 1.7 Cr fine to Russia after failing to delete content Moscow deems illegal

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In the latest legal tussle with Russia over controversial social media regulation laws, Facebook paid 17 million roubles (Rs 1.7 Crore) for failing to remove content deemed illegal by Moscow. With a threat of potential larger fines looming, Facebook parent company Meta, owned by Mark Zuckerberg, is scheduled to face court next week over repeated violations of Russian legislation on content, Interfax News Agency reported. As per the latest updates, the social media giant could be fined a percentage of its annual revenue.

In October, Moscow sent state bailiffs to enforce the collection of 17 million roubles. Meanwhile, as per Interfax report citing a federal bailiffs’ database, on Sunday, there were more enforcement proceedings against the company. Apart from the popular social media app, Telegram has also paid 15 million roubles in fines for failing to comply with the Russian social media legislations that came into force in 2016.

Facebook pays $53k to Russia for refusing controversial social media laws

It is pertinent to mention that Facebook has locked horns with Moscow earlier in November, resulting in it paying 4 million roubles ($53,000) over its refusal to adhere to Russian data localisation laws, the Moscow Times reported. The Moscow court on November 25 had said that Facebook paid the fine levied in February, following which all proceedings against the US-based social media giant. The payment comes against the litigation filed against the company in 2018, alongside Twitter. The tech companies were also forced to pay an additional 3000 rubles ($40) for failing to comply with user data sharing rules as per the law. The Russian authorities have also previously blocked LinkedIn, owned by Microsoft, for failing to abide by the laws.

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Russian social media laws

As per Moscow Times, under the Russian social media regulation laws, all foreign technology companies are required to store data related to Russian customers and users on servers located in Russia. Additionally, the Russian tech companies will also have to share encryption data with the federal authorities as well as record user calls, messages and civil society group conversation records. The apparatus is said to be a severe breach of privacy rights and unfettered back-door access to personal data that could be used to harass Kremlin critics.

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Facebook Messenger Is Launching a Split Payments Feature for Users to Quickly Share Expenses

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Facebook Messenger Is Launching a Split Payments Feature for Users to Quickly Share Expenses

Meta has announced the arrival of a new Split Payments feature in Facebook Messenger. This feature, as the name suggests, will let you calculate and split expenses with others right from Facebook Messenger. This feature essentially looks to bring an easier method to share the cost of bills and expenses — for example, splitting a dinner bill with friends. Using this new Split Payment feature, Facebook Messenger users will be able to split bills evenly or modify the contribution for each individual, including their own.

The company took to its blog post to announce the new Split Payment feature in Facebook Messenger. 9to5Mac reports that this new bill splitting feature is still in beta and will be exclusive to US users at first. The rollout will begin early next week. As mentioned, it will help users share the cost of bills, expenses, and payments. This feature is especially useful for those who share an apartment and need to split the monthly rent and other expenses with their mates. It could also come handy at a group dinner with many people.

With Split Payments, users can add the number of people the expense needs to be divided with and, by default, the amount entered will be divided in equal parts. A user can also modify each person’s contribution including their own. To use Split Payments, click the Get Started button in a group chat or the Payments Hub in Messenger. Users can modify the contribution in the Split Payments option and send a notification to all the users who need to make payments. After entering a personalised message and confirming your Facebook Pay details, the request will be sent and viewable in the group chat thread.

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Once someone has made the payment, you can mark their transaction as ‘completed’. The Split Payment feature will automatically take into account your share as well and calculate the amount owed accordingly.


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Tasneem Akolawala is a Senior Reporter for Gadgets 360. Her reporting expertise encompasses smartphones, wearables, apps, social media, and the overall tech industry. She reports out of Mumbai, and also writes about the ups and downs in the Indian telecom sector. Tasneem can be reached on Twitter at @MuteRiot, and leads, tips, and releases can be sent to tasneema@ndtv.com.

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