Social commerce transactions soar 4-fold in H1

MANILA, Philippines — Social commerce in the Philippines grew over 300 percent in terms of value in the first semester, according to artificial intelligence (AI) solutions firm iKala.

In its report “The Rise of Social Commerce in Southeast Asia,” iKala said the average gross merchandise value (GMV) or the value of goods or services through online marketplaces in the Philippines surged 309 percent in the first semester.

This is slightly higher than the 307 percent average growth in GMV in the four Southeast Asian markets covered in the report.

Vietnam posted an uptick of 28 percent, Thailand at 212 percent and Singapore leading at 678 percent.

In terms of orders on social commerce, the Philippines registered a 36 percent growth in the first half, below the 116 percent average for the four Southeast Asian markets.

Thailand posted the biggest increase in orders at 173 percent, followed by Singapore at 155 percent and Vietnam with 101 percent.

“While much of this growth is attributed to the COVID-19 outbreak and lockdown orders, there was already an appetite for more and better social shopping opportunities before the pandemic, which is why social media companies have steadily been adding shopping features to their apps to make purchases effortless and seamless,” iKala said.

In the Philippines, iKala said retailers were using tools for payment reminders, as well as chatbots and messenger broadcasts.

Across the four markets, iKala said live selling or broadcasting live videos to feature products have gained popularity as malls and physical stores had to be closed due to the pandemic.

For the Philippines in particular, iKala said consumers were found making purchases via live sale twice a week.

As the live selling trend is here to stay, iKala said retailers could ensure greater success by recreating real-life shopping experiences and investing in the right tools and technologies to engage and convert audiences.

The report showed women aged 25 to 34 years old were the top shoppers on social media in the Philippines.

When it comes to how consumers in the Philippines are shopping online, the report showed bulk or 74.3 percent are using mobile devices, while 25 percent use both mobile devices and desktops, and 0.7 percent use desktops alone.

Clothing was the top product being purchased by consumers in the first quarter, but food and beverage took over in the second quarter.

As for payments for orders, the report showed 69 percent of consumers in the Philippines prefer cash on delivery.

Meanwhile, 21 percent prefer peer-to-peer payments, five percent use digital wallets, three percent opt for bank transfers, and two percent use credit cards.

However, trust, fraud and a lack of familiarity, are still considered barriers for retailers engaged in social commerce in the region, the report said.

“Social commerce is growing rapidly, and every day social media companies are adding new capabilities to support this growth. For retailers, the opportunities are apparent, but to truly succeed they must find ways to make the shopping experience live, interactive and seamless,” iKala chief executive officer and co-founder Sega Cheng said.