Social media channels are no longer just networking platforms but have become digital marketplaces, where merchants and consumers buy and sell goods and services, according to new research by PayPal. Social commerce (s-commerce), is driving the adoption of digital payments as users demand more seamless and efficient payment experiences.
PayPal’s new study which surveyed 4,000 consumers and 1,400 merchants across seven markets in Asia, highlights the rapid growth of s-commerce in the region. It also showcases the positive impact s-commerce is having on merchants’ and consumers’ financial lives, and how digital payments plays an integral role by providing a secure way for sellers to sell products and services on social media platforms.
With social media users in Asia expected to reach one billion in 2018, which is almost double the number of users in 2012, social media platforms have become an attractive marketplace for merchants. Low overheads, ease of setting up and a readily available consumer base are adding to the lure of s-commerce. Fifty-seven per cent of those surveyed said that it is easier to set up their business on social media, while 48 per cent liked the idea of leveraging their network of friends and relatives.
Amongst merchants surveyed, 80 per cent are already selling through social media platforms/messengers with 72 per cent currently accepting digital payments, of which e-wallets/mobile wallets is the most popular. Within this segment, PayPal (71 per cent) emerged as the most used payment platform in the region by merchants on social media, followed by Alipay (36 per cent) and Google Checkout (25 per cent).
The proliferation of s-commerce is expected to continue, with 80 per cent of merchant respondents who have yet to incorporate social media into their business model saying that they are likely to sell through social media/messenger platforms in the future.
S-commerce has the potential to be a key enabler of economic empowerment and greater financial health, with 92 per cent of merchants surveyed saying that s-commerce has significantly improved their financial condition.
“Social media came into fruition 15 years ago and consumer expectations of how these platforms can impact their everyday lives is rising. Selling on social media without a seamless payment system is ineffective. At PayPal, we see digital payments beyond just a form of transaction. It is an enabler of economic empowerment and improved financial health via the convenient and secure facilitation of cash flows,” said Dr. Rohan Mahadevan, Chief Executive Officer, PayPal Pte Ltd and Senior Vice President, APAC, PayPal Inc.
In addition to established businesses, s-commerce is opening up economic opportunities for individuals. According to PayPal’s study, people are turning to social media platforms to casually sell goods and services, dispose of unwanted goods and monetise their skills and hobbies.
Amongst consumers surveyed, 30 per cent of respondents with Internet access said they have already began transacting on social media. Of those already transacting on social media, 93 per cent said that s-commerce has empowered them to become independent and 94 per cent see it as a way to monetise their skills.
Besides being able to earn additional income that improves their financial well-being, s-commerce has empowered individuals to become entrepreneurs, without the risks that are associated with traditional retail models. Eighty-nine per cent of consumer respondents noted that it has lowered the barriers/risks of starting something of their own.
Social-commerce, bolstered by digital payments, is creating new economic opportunities and empowering merchants and individuals to better their financial standing. The ripple effect of this on the overall economy – from boosting growth to creating jobs – is even more promising.
“Merchants and consumers want convenient and smart payment solutions that can adapt to the alternative e-commerce platforms, like mobile commerce and s-commerce, that are emerging. PayPal.Me for Business, which is a personalised link that allows for swift and secure transactions compatible with social media platforms is an excellent example of PayPal’s customer-centric approach to innovation. By shortening the cycle between discovery and purchase, we offer consumers a convenient buying experience, helping reduce cart abandonment and generating even greater revenue businesses,” said Dr Mahadevan.