Despite its prominence in large areas of the Western world, the ecommerce industry is still relatively early in its development, with a huge amount of room to grow — particularly in the developing world.
As technological standards rise on a global scale, more and more people are afforded the means, the infrastructure, and the awareness that make it possible and desirable for them to enter the convenient world of online shopping.
And while there are plenty of ecommerce markets booming at the moment, Southeast Asia is really leading the way, with 330 million internet users — a number that will continue to grow — and a high ecommerce uptake.
When such dominant organizations as Google have openly taken note of its staggering opportunities, it’s clear that the future is bright.
But with such rich online retail opportunities in the region, how is the marketing industry adapting?
Well, it’s rapidly embracing the power of conversational commerce in moving towards flexible cross-platform sales funnels that take advantage of the immense saturation of messaging channels to reach prospective customers and turn them into loyal advocates.
This messenger marketing method isn’t just proving a valuable addition to advertisers and retailers in the Southeast Asian ecommerce industry — it’s outright changing the market.
In this piece, we’re going to take a closer look at how messenger marketing works, what makes it so useful, and why it’s such a strong fit for this particular region. Let’s begin.
Why Messenger Marketing Is So Powerful
Traditional approaches to marketing have been seeing diminishing returns for some time now, and the slide is only going to get worse.
We’ve become inured to standard advertising techniques, accustomed to ignoring media spots and scrolling past (or actively blocking) digital banners and pop-ups.
The practice of putting up a few posters for a product and yielding numerous conversions is dead in the water for any brand that doesn’t already have massive public recognition.
Meanwhile, social media ads have already been found to be strongly effective in areas such as Thailand, with advertisers spending more on Facebook ads than on any other digital marketing — giving a clear glimpse of the direction in which things are going.
Messenger marketing goes even further in neatly side-stepping ad resistance by offering different messages in different contexts. Instead of leaning on generic promotional elements in generic media, it provides targeted utility through personally-affecting channels.
Since we have such control over the content of our chat applications (and use them primarily for conversing with friends and family members), we view them with affection instead of indifference, and are thus much more vulnerable to suggestion from chat-based recommendations.
Let’s compare two basic examples. In the first, you see a banner ad for a product — it’s from a brand you like, but it was placed there for a wide audience, so there’s a decent chance it falls outside of your range of interests.
If it does interest you, then you must either plan to visit a corresponding store or take out your smartphone and make a search (perhaps not tremendously likely since we’re lazy creatures at heart).
In the second example, you see a notification from a brand you follow through a chat application — it’s a new product recommendation based on your order history and your indicated preferences.
Because it’s hyper-relevant to your interests, and you can take action directly from the messaging app, the conversion process is incredibly quick and easy. If you want it, you can get it with just a few taps, then move on with your day.
A Smartphone-Led Digital Revolution
In the Western world, the influence of computer technology grew incrementally, and the internet was rolled out slowly over time.
Dial-up connections through unwieldy desktop machines introduced the concepts, and years passed before the ecommerce world achieved anything close to the level of slick convenience it offers today.
As a result, the technological distribution is still very scattered there. Retailers must not only contend with the lingering significance of legacy software and hardware (old versions of Internet Explorer, for instance, or sluggish elderly laptops) but also understand that awareness of digital technologies varies hugely.
For example, there are consumers in the West that remain very reluctant to embrace smartphones. Having slowly become accustomed to the early approach to internet access, they recoil from the prospect of once again dropping what they know and picking up new skills. Some even view smartphones as wastes of time or even distractions from reality.
In the developing world, and particularly Southeast Asia, technological adoption was quite different. Instead of being slowly introduced over time through unintuitive desktop operating systems, the online world first achieved public awareness in many areas through the provision of smartphones.
As a result, generations of all ages (but particularly children) are extremely comfortable with using mobile platforms for all facets of online activity.
And because the smartphone has been so ubiquitous and influential in the technological development of the region, social networking has taken on a very different shape than in the West — as we’ll see next.
The Dominance of Chat in Southeast Asia
In markets such as the US or the UK, social media — mainly introduced through MySpace and subsequently made dominant through Facebook — preceded extensive mobile connectivity, and when smartphones came along and started growing in popularity, the existing networks began making their operations more mobile-friendly.
In Southeast Asia, however, the relative lack of access to the internet and internet-enabled devices in the early years meant that social networks didn’t rise to prominence in the same way, and when the smartphone hit the scene, it was the configurable chat applications that started bringing people together — establishing the kinds of connections that were borne of Facebook and similar platforms in the West.
Today, there are several massively-popular chat platforms fighting for dominance in the region, with LINE out in front (and now the second-largest chat app in all of Asia).
Back in 2015, Thai ecommerce retailers already knew the promotional significance of chat engagement, using LINE conversations to follow up on Instagram leads, and things have only grown since then.
Because of this, the concept of taking meaningful action through a messaging app has long been well-established in Southeast Asia.
Consumers will not react with surprise at being given opportunities to buy things through messaging windows because they’ve been doing it for years in the service industry: placing bookings, ordering food, and arranging travel.
Conversational commerce isn’t changing the ecommerce market because it’s disruptive — it’s changing the market because it fits so neatly into an existing gap.
Aside from the sheer weight of numbers, this is the biggest thing that makes messenger marketing such a hot prospect in Southeast Asia. The main battle (the fight to achieve public awareness and acceptance) has already been won.
One of the leading apps in Thailand is the 7-Eleven TH app, for instance, providing access to discounts and various loyalty drivers — and 7-Eleven in the US launched a Messenger chatbot last year to provide even more convenience, hinting at what the future holds.
Indeed, the march of chatbots can already be seen in the region through LINE, with bots helping people handle their banking needs in Thailand and bolstering ecommerce buying in Indonesia.
Down the line, we might even see a confluence of the two approaches (dedicated apps and messenger chatbots), perhaps in the form of a primary app with native live-chat functionality. This would provide greater convenience and allow for additional customization through no longer needing to adhere to specific messenger policies.
Chatbots and Beyond: Looking to the Future
Messenger marketing has already changed the SE Asian ecommerce market very heavily for all the reasons we’ve looked at, playing a significant role in the growth of mobile ecommerce that has seen it become the dominant approach in the region, but its influence is only going to get stronger in the coming years.
Here are three big reasons why:
The chatbot market is fairly untapped. Chatbot growth continues to pick up pace worldwide, but it’s limited in particular regions that lack sufficient local expertise.
As technology improves and automation technology becomes ever-more accessible, this obstacle will go away — and when that happens, AI-led systems will perfectly fit the mobile-centric Southeast Asian market.
There’s a lot of money to be made. Hundreds of millions of internet users plus expanded purchasing options in flourishing economies are going to prove incredibly lucrative for smart retailers, and messenger marketing offers an unrivalled level of cost-effective promotion.
If you’re looking to buy a business (particularly to use for dropshipping), or if you’re planning to set one up from scratch, it would be very smart to look into the viability of targeting Southeast Asia.
There’s intense competition at the top. In the West, Amazon dominates to such an extent that other ecommerce businesses are struggling to compete. Not so in Southeast Asia.
While Amazon is in the process of entering the region, it’s operating at a lag relative to its inevitable competitors, and companies such as Alibaba and Tencent are likely to result in a heated battle for profit that will force the contenders to be forward-thinking in their marketing.
Within the next decade, we can expect to see Southeast Asia leading the way for messenger marketing and conversational commerce in general, achieving a synthesis of technology and retail that will lay out the blueprint for the Western world to follow.
To recap, messenger marketing is a perfect fit for Southeast Asia (and the developing world in general) because consumers are accustomed to the smartphone as a primary computing device, perfectly willing to see mobile messaging as an extension of the retail process, and set to spend huge amounts online as the ecommerce market goes from strength to strength.
Ecommerce retailers that want to flourish in Southeast Asia must be aware of the mobile-first approach and do everything they can do reach prospective customers through multi-channel promotional campaigns — to do otherwise would be to leave huge sums of money on the table.
Thinking about building a messenger chatbot to improve customer service for your online store, or to integrate with a third party platform? Contact Appsynth today and discuss your requirements with one of our marketing experts.
Written by Patrick Foster: a writer and ecommerce expert from Ecommerce Tips — an industry-leading ecommerce blog that shares the latest insights from the sector, spanning everything from business growth hacks, to product development. Follow him on Twitter at @myecommercetips.