The evolution of cross-border e-commerce merchants

Singapore

AS e-commerce continues its rapid evolution, industry insiders say the model of setting up an e-shop to sell goods is regarded as traditional. Selling through influencers - well-known Internet personalities - using live streaming is now gaining popularity across South-east Asia, as the model evolves towards social commerce.

In the social commerce model, the channel for attracting buyers is shifted from e-commerce platforms to social media, where more interactive aspects come into play. Facebook, Instagram, TikTok, Line and other messaging applications are some of the biggest platforms popular among sellers, who can set up their own online shops that are embedded within the apps, or use them as a channel for publicity and promotion.

The social element of these platforms increases what is known in the industry as "stickiness" - where users show a higher degree of engagement - while downplaying the transactional aspect of the exchange. The purchases arising from chatting with friends or while seeking entertainment may also subconsciously be perceived by consumers as a necessary expenditure for maintaining social ties.

After a consumer's purchase desire has been triggered by social and entertainment interaction, it might lead to impulse buying on the spot. Consumers no longer wait until they decide to buy something to search for the items on e-commerce platforms. Buyers and sellers negotiate prices and discuss product details in an interactive manner.

Sellers may also be ordinary members of the public instead of professionals; there's no requirement for them to be experienced "influencers" or online personalities to set up online shops or promote brands and products. As long as they have accrued adequate views and followers on their personal social media accounts, they might be able to work with brands or companies to sell products directly or indirectly and be paid a commission. All transactions are done through day to day social media interactions.

According to the latest data from management consulting firm Bain & Co, social commerce made up 44 per cent of South-east Asia's US$109 billion e-commerce sector last year, generating US$48 billion in sales. In Thailand, almost half of all e-commerce transactions are done over Facebook, WhatsApp, Line, or other social media platforms.

King Wu, secretary-general of the Guangdong-Hong Kong-Macao Cross-border e-Commerce Industry Education Integration Association, said that many of the major cross-border vendors are currently employing a dual-channel strategy: simultaneously selling over e-commerce platforms as well as their own company websites or social media accounts.

Zhou Hao is a Journalist with Lianhe Zaobao China News Desk. This article is part of a collaboration on a series of weekly features translated from Lianhe Zaobao. The original story first appeared on May 30. The next package on June 14 will take a look at the development plans of Chinese financial firms in Singapore.

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