Singapore – Southeast Asian retailers are placing big bets on social media as 68% plan to increase investment in social commerce over the next 12 months, according to the latest data from Shopify. This dovetails with the finding that social media is now the biggest driver of brand and product discovery in Southeast Asia, with more than 4 in 5 consumers (82%) discovering new products through social media.
According to the report, social commerce platforms are seeing staggering growth in the region, with platforms like TikTok projected to grow their user base in Asia-Pacific by 11.3% in 2024. In line with this, 39% of retailers surveyed for the report said social media engagement is one of the most crucial metrics for determining the ROI of commerce infrastructure, ranking just behind profit margin (44%).
Moreover, the current economic climate has greatly impacted purchasing behaviour. Inflation and the rising cost of living have led the majority of Southeast Asian consumers (83%) to cut back on non-essential expenses, with over half seeking the best value when they shop.
When it comes to making a purchase, price is the top factor for shoppers in Southeast Asia. Nearly all consumers surveyed (96%) said that they would stay loyal to a brand if it offered them an incentive, with consistently low prices or promotions being a top draw for 70%. In line with this, contextual real-time pricing (71%) is the number one area in which retailers plan to increase their technology spending so that they can drive conversions while maintaining favourable margins.
It is also worth noting that business websites, also referred to as brand.com sites, are important to shopping journeys in the region. Around 81% of Southeast Asian shoppers agree that a company with a brand website is more trustworthy and credible, compared to those without one. This trust factor is especially important to shoppers when making large purchases – two in five (42%) of SEA consumers prefer making large purchases on a company’s website instead of its online marketplace store.
While online channels are the stand-out preference for Southeast Asian shoppers, physical stores remain an important channel. Over a quarter (28%) said they enjoy in-store shopping as much as online shopping, and another 19% prefer in-store shopping. This highlights the importance of creating omnichannel shopping experiences. To succeed in omnichannel, a unified commerce platform that provides a holistic view of customer engagement, inventory, and fulfilment across channels is key. Testament to this, more than 3 in 5 retailers (66%) surveyed said they will increase tech investment in a unified commerce platform.
The report also highlighted that around 85% of retailers face operations-related challenges, with efficiency issues stemming from manual processes and complex business systems. Almost all retailers surveyed (99%) believe that technology will remedy these struggles and are planning to invest about 20% of their total revenue into innovation initiatives in the next year. Topping the list of increased tech investments: contextual real-time pricing (71%), social commerce (68%), business intelligence (67%), unified commerce platform (66%, and composable stacks (65%). Given that technology is set to reshape the retail landscape, an overwhelming majority (93%) of retailers believe that the chief technology officer will contribute to the evolution and/or revenue growth of the business.
Shaun Broughton, managing director for APAC and Japan at Shopify, said, “In this current economic climate, the imperative for both shoppers and retailers to achieve more with less has never been greater. Retailers are turning to advanced technology solutions to not only meet evolving customer demands but also to fortify their long-term resilience.”
He added, “Unified commerce is set to be a key growth catalyst, enabling retailers to harness comprehensive data and insights across their customers, inventory, and operations to make informed and strategic decisions. With technology being the linchpin to the future of retail, Shopify is the partner of choice for retailers across Southeast Asia, from large enterprises to small businesses, with solutions that are purpose-built to cater to their unique needs.”
