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Filipinos’ social media spending up in first half

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THE NUMBER of Filipino shoppers on social media grew less than its regional peers over the first two quarters of 2020, but shopping less frequently didn’t keep Filipinos from spending nearly as much as their neighbors.

In a recent research by Taiwan-based artificial intelligence firm iKala—which surveyed 12,000 consumers and more than 1,000 iKala business customers from the Philippines, Thailand, Vietnam and Singapore from January to June—it found that shopping orders on social media from the Philippines grew 36% versus the same six months last year.

This puts it behind the growth of social media shopping orders from Singapore, Vietnam, and Thailand, which jumped 155%, 101%, and 173%, respectively.

“Social commerce in the Philippines is still in early stages technology-wise, and most processes are being managed manually by retailers… This makes it harder not just for the sellers, but for the whole industry to scale faster,” iKala Co-Founder and CEO Sega Cheng said in an e-mail to BusinessWorld.

However, the increase in money Filipinos spent on goods sold on social media rose 309% year-on-year, besting Vietnam’s 28% growth and Thailand’s 212% growth. Singapore posted a 678% jump in gross merchandise value during the period.

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iKala said much of this expansion can be linked to the coronavirus disease 2019 (COVID-19) pandemic. As consumers were stuck in homes to observe quarantine measures, the growth of shopping on social media accelerated at a much faster pace.

“Social commerce is growing rapidly, and every day social media companies are adding new capabilities to support this growth,” Mr. Cheng said in a statement.

The firm noted that in the Philippines, live-selling has become a popular trend to mimic in-store shopping. The research found that shoppers in the Philippines and Vietnam normally buy through live-selling twice a week.

“[R]etailers can ensure greater success of the efforts by recreating real-life shopping experiences and investing in the right tools and technologies to engage and convert audiences,” the research said.

The study also found that women aged 25 to 34 drive most of the traction in social media shopping, accounting for 34% of the surveyed shoppers in the Philippines. This means women are growing to become the key decision-makers of home purchases, it said.

Comparing the first quarter versus the second quarter, shopping activity also shifted in the country: clothing products were the most frequently shopped product during the first quarter, but changed to food and beverage (F&B) during the second quarter.

“Although the Philippines economy is slowly opening up with strict social distancing and safety protocols in place, supermarkets, cafes and restaurants will still not be able to operate at pre-COVID levels, which means that the growth in online F&B shopping is likely to stay this way for a while,” Mr. Cheng said.

While the adoption of social commerce has grown, iKala said trust remains an issue for online shoppers. Cash-on-delivery is still the most popular form of payment in the Philippines, accounting for 69% of the respondents.

“To overcome this, retailers may consider working with micro-influencers who have smaller but more engaged followers and are often considered more trustworthy by consumers,” it said. — Denise A. Valdez

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