Without tourists, Asia’s vendors turn to Facebook

24 Jul, 2020 - 00:07 0 Views
Without tourists, Asia’s vendors turn to Facebook

eBusiness Weekly

Bangkok’s sprawling open-air Chatuchak market is a shadow of its former self. Coronavirus has emptied its thousands of tiny stalls and quieted its hundreds of narrow passageways, which usually teem with tourists sweating in the soupy heat.

Some locals still venture there for essentials, but the famed shopping complex, which normally sells everything from rattan place mats to street fashion, is largely deserted.

Yet many mom and pop retailers, robbed of their market income, haven’t given up. Instead, they’ve turned to social media platforms such as Facebook and Instagram to hawk their wares. So many small vendors have embraced buying, selling, and haggling online that Thailand is now Southeast Asia’s largest market for so-called social commerce transactions, according to Line Corp., maker of the popular eponymous messaging app.

Everything from home-baked brownies to lemongrass-scented cleaning products can be found on Thailand’s virtual shelves.

Some fishermen are even selling their daily catch from the Andaman Sea.

A similar trend is unfolding in Indonesia and the Philippines, where outdoor markets and street vendors are also common and traditional retail has been upended by Covid-19.

Lalilladar Sirisukamon, whose Rock Me Jewelry sells cute pineapple-shaped rings and tropical-motif pendants, established her first outlet at Chatuchak in 2013. After the virus hit and sales stopped, she shifted online.

“Chatuchak, out of all our stores, is the place with the lowest sanitation and cleanliness. So we were hesitant to reopen there,” the 34-year-old says.

“We started doing live Facebook video sales to make some money so we could pay employees and cover our costs. It’s the only thing keeping us afloat right now.”

Much of the online activity in Thailand is “conversational commerce,” the sort of buying and selling that takes place over chatrooms, messaging services such as WhatsApp, or platforms such as Instagram. It can be particularly useful for micro-retailers, allowing them to connect quickly and directly with consumers and to offer personalised service, with little to no upfront investment.

“You just need to know how to take a nice picture, post it online, and set a price for what you made,” says Vilaiporn Taweelappontong, a lead partner at PwC Consulting in Thailand.

“In the beginning it was small items like homemade cookies or other food products, but now it’s getting serious. People are selling land, their houses, condos.”

Big brands are also getting in on the act: Last year, McDonald’s Corp. used Facebook’s in-stream live video ads to reach 3,5 million people in the Philippines over a two-month period. Selling via livestream is already huge in China, where the megastar saleswoman known professionally as Viya can draw audiences of more than 37 million. In April, she sold space on an upcoming rocket launch to a satellite company. The price: $5,6 million.

One drawback of using social media platforms to transact is that some don’t have payment systems. Money is typically transferred directly, by bank transfer or cash upon delivery; it’s a system that relies on mutual trust. But in much of Southeast Asia, where cash payments are still common, that works.

The process may gradually become more structured. Facebook Inc. recently launched Facebook Shops, a feature that allows users to set up an online store within its main app, and plans to start rolling out a similar service for Instagram later this year.

“People have been using live video on our apps to showcase products for years, from shoe stores announcing new sneakers to beauty influencers trying on different lipsticks,” the company said in a statement in May.

“Now we’re making it easier to shop for products in real time.”

Facebook is also the social media platform of choice in the Philippines, where 98 percent of the roughly 73 million internet users are on it. Since lockdowns began there in March, conversational commerce has mushroomed. Thousands of Filipinos have become online merchants using Facebook or Viber, a messaging app from Japanese company Rakuten Inc. that’s also hugely popular. The potential for growth is enormous.

In terms of gross merchandise value, the Philippines’ total internet economy—including e-commerce—was worth just $7 billion in 2019, the lowest figure in the region, according to a study from Google, Temasek, and Bain & Co.

It’s projected to grow to $25 billion by 2025, but that would still leave it far behind Indonesia (projected to reach $133 billion by then), Thailand ($50 billion), and Vietnam ($43 billion).

“So many people are struggling to find a way to make a living,” says Jay, who uses Facebook to sell produce from Pangasinan, a province north of Manila famous for its mangoes and oven-baked rice cakes. The 29-year-old canteen owner asked not to be quoted by his full name because the government is looking to tax home-based transactions.

“Without a vaccine and until there’s no fear of going out, operating a store isn’t viable,” he says. “Facebook is really the medium for the smallest retailers.”— Bloomberg.

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