So­cial com­merce and op­por­tu­ni­ties for busi­nesses

Your cus­tomers want to buy in so­cial me­dia chan­nels, so why aren’t you sell­ing to them there? Asks Sirish Ku­mar, CEO and co-founder of

Gulf Business - - CONTENTS -

CEO and co-founder of on­line pay­ment gate­way Telr, Sirish Ku­mar, dis­cusses the ben­e­fits of sell­ing on so­cial me­dia plat­forms, and why more busi­nesses need to take ad­van­tage of the re­gion’s love of so­cial

It’s an in­cred­i­ble statis­tic that we spend an ex­tra 58 mil­lion hours on Face­book dur­ing Ra­madan in the re­gion. That’s 5 per cent more time than usual, ac­cord­ing to the so­cial me­dia chan­nel’s own statis­tics.

But is this matched by an in­creased ef­fort by the re­gion’s busi­nesses to sell on the chan­nel? I sus­pect not – and this is a lost op­por­tu­nity, given that the Mid­dle East em­braces so­cial me­dia like nowhere else on earth. So why would this be?

So­cial me­dia is com­pletely in­stinc­tive. That par­tially ex­plains why there are teenagers out there with In­sta­gram fol­lower numbers that brands would die for. Teenagers are happy to act im­pul­sively, to just get on with com­mu­ni­cat­ing in a chan­nel that they in­her­ently un­der­stand. Brands, on the other hand, have a ten­dency to over-think how they en­gage with so­cial me­dia.

This shouldn’t be the case. So­cial me­dia can no longer le­git­i­mately call it­self new – the most fa­mil­iar chan­nels such as Face­book and Twit­ter are now over a decade old. In in­ter­net years, that’s sev­eral gen­er­a­tions that they’ve been around for. In­deed, the spur for the cre­ation of the in­ter­net it­self was ef­fec­tively to build a so­cial net­work – to al­low con­nected de­vices to com­mu­ni­cate di­rectly with each other.

So we are not deal­ing with a new phe­nom­e­non here – quite the op­po­site, in fact, as be­havioural pat­terns are now well es­tab­lished and un­der­stand­able. What is rel­a­tively new, how­ever, is how mer­chants

small and large are us­ing th­ese chan­nels to not just prospect and build au­di­ences, but to di­rectly mon­e­tise them – to use so­cial me­dia chan­nels as both a store-front and a point of sale.

Here in the Mid­dle East, we have one of the world’s high­est rates of so­cial me­dia us­age. Fa­mously, 90 per cent of the UAE’s in­ter­net users also have an ac­tive Face­book ac­count. Saudi Ara­bia has the high­est YouTube per capita view­ing fig­ures of any­where on Earth, and with a re­ported 310 mil­lion video views per day across the MENA re­gion, only the US sees more ac­tiv­ity on the chan­nel.

It’s a sim­i­lar pic­ture on the newer so­cial me­dia chan­nels – Snapchat, for in­stance, re­port­edly has more ac­tive users in the UAE than in all but a few of its other ge­ogra­phies.

This mat­ters. It mat­ters be­cause the dy­nam­ics that cre­ate such a fer­tile environment for so­cial me­dia adop­tion are not likely to change – not least in the short-term. And it mat­ters be­cause clearly so many of our con­sumers are in­creas­ingly spend­ing their time on so­cial me­dia chan­nels in pref­er­ence to tra­di­tional web­sites. If this is where the mar­ket is, then this must be where the mer­chants should be as well.

So what are those dy­nam­ics? What cre­ates the Mid­dle East’s grav­i­ta­tional pull for so­cial me­dia chan­nels? The an­swer is ac­tu­ally rel­a­tively straight­for­ward, and it’s down to the triple whammy of de­mo­graph­ics, dis­pos­able in­come, and de­vice use.

The Mid­dle East’s pop­u­la­tion is young. In the UAE alone, a third of the pop­u­la­tion is un­der 25 years old – and that youth­ful­ness is re­flected right across the re­gion. The GCC’s pop­u­la­tion is wealthy, and in many of the Gulf States it’s ur­ban in na­ture. And due to the in­vest­ments in in­fra­struc­ture over the past few decades, ur­ban liv­ing means good net­work cov­er­age. But most im­por­tantly, we just love our mo­biles. In the UAE, for ex­am­ple, smart­phone pen­e­tra­tion rates are among the high­est in the world.

Smart­phone use drives so­cial me­dia adop­tion. So­cial me­dia adop­tion drives smart­phone use. Over 50 per cent of Face­book users, for in­stance, now ac­cess Face­book ex­clu­sively on their mo­biles. So­cial me­dia ac­counts for 15 per cent of today’s mo­bile data use, ac­cord­ing to Eric­s­son’s Mo­bil­ity Report – and the com­pany es­ti­mates that this will grow by 39 per cent over the next six years. There’s only one cat­e­gory of mo­bile phone use that’s set to grow faster, and that’s video con­sump­tion – it­self a sig­nif­i­cant as­pect of so­cial me­dia ac­tiv­ity.

So there’s no doubt that this is where the au­di­ence is. And so­cial me­dia chan­nels them­selves have gone to great lengths to fa­cil­i­tate e-com­merce ac­tiv­ity in-chan­nel. It is now straight­for­ward for a brand to not just present them­selves prop­erly on the ma­jor­ity of so­cial me­dia chan­nels, but also en­gage with po­ten­tial cus­tomers all the way through to the point of ac­tual con­ver­sion.

This shift is echoed by the ex­pec­ta­tions of the cus­tomers them­selves. Mary Meeker’s 2017 report on in­ter­net trends has shown that for Pin­ter­est, as an ex­am­ple, although the num­ber of peo­ple that view the chan­nel as a great place to browse has in­creased by a third in the past two years, the num­ber of peo­ple that view it as a great place to buy has ac­tu­ally dou­bled in the same pe­riod.

Your cus­tomers are not only con­gre­gat­ing in one place, they’re also there with the ex­pec­ta­tion that they’ll be able to pur­chase in the chan­nel. So­cial me­dia is a highly demo­cratic environment: an SME has just as much op­por­tu­nity to reach, en­gage with and sell to con­sumers as a global brand does – pos­si­bly more so, given that so­cial me­dia users tend to put a high value on au­then­tic­ity.

SMEs are also able to be nim­ble – and where their on­line pay­ment ag­gre­ga­tor both sup­ports so­cial com­merce and links to their in­ven­tory man­age­ment plat­form, they have a very pow­er­ful ‘on­line pay­ment plus’ so­lu­tion for rapidly mov­ing in­ven­tory.

This ties in beau­ti­fully with the na­ture of so­cial me­dia chan­nels, where be­hav­iour is more im­pul­sive and users are more in­clined to share con­tent that they feel their net­works will ap­pre­ci­ate. If a mer­chant can rapidly cre­ate an of­fer that al­lows him or her to sell off ex­cess in­ven­tory at an ac­cept­able price and then post it into so­cial me­dia, the im­me­di­acy and value of that of­fer makes it more at­trac­tive to a so­cial me­dia au­di­ence. It’s a win-win sit­u­a­tion.

And let’s not over­look the vis­ual as­pect of so­cial me­dia use; par­tic­u­larly here in the Mid­dle East where chan­nels like In­sta­gram and Snapchat have very char­ac­ter­is­tic adop­tion rates and us­age pat­terns.

We al­ready love to com­mu­ni­cate with images – and us­ing images to search will be­come more of a nat­u­ral process. It’s not a stretch to see that tap­ping on an im­age to buy the prod­uct it shows within a so­cial me­dia chan­nel is go­ing to be­come an ex­pected ac­tiv­ity.

We know, then, where your au­di­ence is. We know that they are in­ter­ested in buy­ing. And we know that the so­cial me­dia chan­nels they are in are do­ing what they can to make it as easy as pos­si­ble for them to find the prod­uct they want and pur­chase it, all with­out leav­ing the chan­nel.

So why aren’t more mer­chants there? At Telr, we are con­fi­dent that be­fore long they will be. Although the per­cent­age of SMEs in the UAE with an on­line pres­ence is low com­pared with more de­vel­oped mar­kets (18 per cent in 2015), this is chang­ing rapidly. And we be­lieve that so­cial com­merce will be one of the ma­jor driv­ers of this change, as mer­chants re­alise that a ready-made on­line environment al­ready ex­ists with an ex­ist­ing ecosys­tem of on­line pay­ment ag­gre­ga­tors and other e-com­merce ser­vice providers with ex­pe­ri­ence and prod­ucts.

We gen­uinely be­lieve that so­cial com­merce will fa­cil­i­tate a wave of rapid – but still so­phis­ti­cated – moves on­line by the re­gion’s SMEs. This can only be to the de­light of their cus­tomers, who are al­ready there and ex­pect­ing to buy.


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