Southeast Asian retailers are placing big bets on social media with 68% planning to increase investment in social commerce over the next 12 months, according to Shopify's 2024 Southeast Asia Retail Report.
The study, which was conducted by YouGov for Shopify, found that social media has secured its position as the biggest driver of brand and product discovery in Southeast Asia at 82%.
To this end, social commerce platforms are currently 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, Shopify’s report found that 39% of retailers believe social media engagement to be one of the most crucial metrics for determining the return on investment (ROI) of commerce infrastructure, ranking just behind profit margin at 44%.
Following the current climate of inflation and rising cost of living, around 83% of Southeast Asian consumers are cutting back on non-essential expenses with over half seeking the best value when shopping.
Price has since become a top factor for consumers, with 36% indicating that they would stay loyal to a brand if it offered them an incentive such as consistently low prices or promotions.
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Despite this, retailers are also competing on more sustainable forms of value, such as customer experience.
In Singapore, free shipping, accessibility of payment with debit and credit cards and free returns form the top three online shopping considerations at 71%, 55% and 51%, respectively.
Additionally, Shopify’s report also revealed several challenges faced by retailers.
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With 52% of surveyed Southeast Asian consumers preferring to shop online, business websites become integral to shopping journeys within the region.
Shoppers tend to trust companies with brand websites, especially for large purchases with 42% of Southeast Asian consumers preferring to make large purchases on a company’s website instead of its online marketplace store.
However, physical stores also remain an important channel, with 28% of consumers enjoying both in-store and online shopping, and another 19% preferring in-store shopping.
This reflects the importance of omnichannel shopping experiences for retailers.
The report also found that 85% of retailers are facing operations-related challenges, with efficiency issues stemming from manual processes and complex business systems.
Currently, 99% of all surveyed retailers see technology as the solution to these struggles with plans to invest around 20% of their total revenue into innovation initiatives in the next year.
Increased technology investments including contextual real-time pricing, social commerce , business intelligence, and unified commerce platforms stand at 71%, 68%, 67% and 66% respectively.
With the increasing importance of technology in reshaping the retail landscape, 93% of retailers are highlighting the role of chief technology officer in contributing to the evolution and revenue growth of business.
