Singaporean e-commerce startups tap the power of social media

Dave is senior strategist at Septeni APAC and is based in Singapore. Septeni is a Japanese digital agency that has optimized over 300 Facebook ad campaigns since July 2010. You can reach Dave at dave@septeni.com or on Twitter at @dave_sloan.

How are Singaporean e-commerce startups using the power of social media? A panel at Social Media Week Singapore shared some tips on the latest social media trends.

Last week’s Social Media Week Singapore featured a breakout session on “the marriage of social media and e-commerce.” Moderated by Gwendolyn Regina of SGE.io. Panelists included Alexis Horowitz-Burdick, founder at Luxola.com (an online beauty products store), Christopher Chong, co-founder of Groupon Singapore (the leader in flash sales) and Douglas Gan, co-founder and CEO of VanityTrove (a beauty product subscription service).

What is the size of the e-commerce market in Southeast Asia?

Panel moderator Gwendolyn had published a statistic that refers to Asia as 32 percent of global e-commerce sales, but those numbers are highly skewed by China and mature e-commerce markets like South Korea, Japan, and Australia. In many ways, yes, Asia represents a juggernaut for e-commerce markets. According to Emarketer “this year, e-commerce sales will grow 18.3 percent to US$1.298 trillion worldwide as Asia-Pacific surpasses North America to become the world’s No. 1 market for B2C e-commerce sales.”

But keep in mind that Southeast Asia barely even shows up in those Asia-Pacific numbers. According to Channel News Asia, “although Internet sales in Singapore amount to only US$7 million a year compared to China’s US$100 billion, e-commerce firms say Singapore is a good base to test-bed strategies before they launch or expand into other Southeast Asian markets.” Of course the long-term opportunity is to expand across all of Southeast Asia, which is comprised of 11 countries and 620 million people.

Signs of life for e-commerce in Southeast Asia

Traditional e-commerce 1.0 business models never made much of a dent in the Southeast Asia market, mostly due to lack of universally adopted payment systems, the complication of international shipping logistics, and a cultural propensity to shop in comfortable air-conditioned shopping malls rather than from a home computer.

But obviously we’re seeing some signs of the e-commerce 2.0 growth in the region, with the emergence a few progressive business models, namely the subscription model (Vanity Trove), flash sales (Groupon), and an exclusive, curated fashion market (Luxola).

The discussion and debate among these Singaporean e-commerce entrepreneurs fascinated the standing-room-only crowd, and the panelists certainly didn’t hold back in telling the audience the nitty-gritty details of their social media strategies. Here’s a quick overview of a few hot topics:

Attribution – where does the sale come from?

Is social media best for brand building or can it really drive sales conversions? How do Facebook ads compare to Google ads?

Historically traceability of social media leads has been difficult. Alexis points out that it’s gotten a lot easier to trace the source of every sale in Google Analytics, but social media should not be treated as a simple lead generator like search. You may be able to trace “last click” attribution but its difficult to really understand how much influence previous brand impressions from social media presence contributed to the sale.

Related, Facebook has recently focused their attention on performance marketing for e-commerce companies.

Social media as a customer service and research channel

The panelists agree that social media’s greatest strength is its ability to serve as a customer service channel. Most brands are wary of opening up a social channel like Twitter or Facebook since it could expose the brand to public criticism, but Alexis finds the upside of openness to be well worth the risk – “Luxola got a lot more love than we expected.”

And social media channels allow you to listen to your audience as they discuss your products and services, much like a digital focus group. Monitoring social media discussions can inspire topics for a brand’s content strategy.

Content strategy

Many brands in Southeast Asia are guilty of posting silly images (like cute kittens) to get quick engagement. But does content that doesn’t reinforce your brand message really help build long-term relationships with customers? Christopher of Groupon argues that shopping is fun and social, so there’s nothing wrong starting a conversation with a silly photo. Alexis of Luxola disagrees, arguing that cutsie photos can distract from the core brand message. Those cheap likes won’t benefit your brand in the long term.

Which social channels are the most strategic?

Naturally Facebook is top of mind. Instagram and Pinterest are also important for discovery of rich visual photos, especially in the fashion market, but Pinterest does not drive traffic back to the brand as much as hoped. YouTube is probably the most important social channel to Luxola because it provides the best platform for engaging customers with authentic fashion content.

Online marketing meets offline marketing

For many e-commerce brands, social media can help amplify offline campaigns and vice versa. Luxola has tried local Twitter treasure hunts and photo contests, tying physical locations to their online presence. These offline campaigns help to reinforce the beauty lifestyle that is part of the Luxola narrative.

Groupon, ironically, set up a physical redemption center to compliment their online presence. The purpose of a physical shop was to make it easy to redeem deals, to discover new deals, and to provide customer service. A physical Groupon store is a good fit for mall-crazy Singapore, and it’s a great example of tying offline marketing activities to online, especially in a market that has not historically adopted stand-alone online commerce.

It’s early days for e-commerce in Southeast Asia, but the landscape is maturing quickly. Next generation e-commerce business models in the region will no doubt focus on widespread social media adoption, the emerging mobile landscape, and Asia’s fashion-crazy culture.

Image Credits: Perrymanku

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