Increasing social media use and mobile penetration is driving the market
The mobile commerce market is set to boom, driven by growing social media and mobile penetration.
The launch last week of Line Shop, a free application for both buyers and sellers, is also expected to drive the growth of e-commerce, especially consumer-to-consumer (C2C) e-commerce.
Line Shop was developed by Naver Japan, the operator of Line, the famous chat app.
Songyot Kanthamanon, chief executive officer of ReadyPlanet.com, said last week that Line Shop will accelerate the adoption of mobile e-commerce.
Thailand already ranks as one of the top users of social media and mobile devices in the region, and e-commerce on all platforms in the country is growing at a heathy clip of 20-30 per cent every year.
“A lot of commerce is done over social media, such as Facebook and Instagram. And Line is used as the key communication channel between buyers and sellers, so Line Shop is expected to fill in the potential opportunity gaps,” he said.
Line Shop will help thrust e-commerce up 20-30 per cent in this half year. However, transactions of social-mobile commerce cannot be tracked.
“In Thailand, only 30 per cent of all e-commerce is online. Most e-commerce transactions are not based on shopping cart and electronic payment systems.
“Initially, Line Shop is expected to be the same in that transactions and value cannot be tracked. However, Line Shop is expected to be one of the aggressive competitors in e-commerce marketing,” he said.
There are four types of e-commerce – traditional businesses run by companies with their own website as online stores, e-marketplace service providers such as Rakuten Tarad.com and Weloveshopping.com, C2C classified e-commerce such as OLX and Pantip Market, and e-commerce over social media platforms such as Facebook and Instagram.
Line Shop is expected to lead long-tail offline commerce, which mostly is small businesses and individual sellers going online.
“Line Shop will create long-tail e-commerce. It’s possible that the revenue streams will come from advertising, transaction fees and premium account fees. It’s my own prediction,” he said.
The strong points of Line Shop are the huge number of Line users numbering about 27 million, high level of engagement and the push message feature.
Pawoot Pongvitayapanu, president of the Thai E-commerce Association and managing director of Rakuten Tarad.com, said Line Shop will stimulate the e-commerce market. The 27 million Line users, of whom 70-80 per cent are active, is the strength of Line Shop. Even though Line Shop is a new app and separate from the Line chat app, Line is expected to help lead traffic to Line Shop.
Line Shop is categorised as a C2C e-commerce facilitator, which is now playing an important role in e-commerce, but cannot track how much its sales are.
Social media is now the crucial marketing tool to lead traffic to e-commerce websites and applications. Not only Line but also e-commerce businesses use other social media – especially Facebook, Twitter and Instagram – to promote their services in order to lead traffic to the marketplaces.
“Line Shop will not cannibalise Rakuten’s flash sales on Line. Line has a lot of users, but that does not mean Line Shop will have the same success. If Line Shop will be integrated into the Line chat application, it has a huge chance to succeed,” he said.
The two main factors for making Line Shop successful are the variety of products and the volume of traffic. It is possible that Line is used to lead traffic to Line Shop.
“ is because this app is separated from the chat app – Line. Line Shop has been introduced in Japan for four months as a separate app as well. That does not affect Rakuten,” he said.
Even though Line Shop is currently free of charge for merchants, in the future revenue streams are possible from advertising and transaction fees, he added.
Regarding the entry of Line Shop, Arrow Guo, head of for Greater China and Southeast Asia at Facebook, said he does not comment on other organisations’ business.
However, with over 26 million Thais using Facebook every month, almost 40 per cent of the population, and 17 million using it daily, as of March, Facebook sees Thailand as one of its priority markets in Southeast Asia and a very high potential market for e-commerce.
“We will continue to support SMEs with Facebook tools that help them achieve their business objectives, whether it’s driving online sales, boosting mobile app download volume or getting more people to engage with their content on Facebook pages,” he said.
As an example of e-commerce on social media, a 18-year-old freshman at Abac, Angumalyn “Fern” Jaisai, has been doing e-commerce on Instagram since she was studying Mathayom 5.
She loves tattoo stickers, so she turned her favourite hobby into a business.
She sells handmade tattoo stickers and smartphone cases decorated with tattoo stickers through her online shop @DIY Tattoo. She designs and produces every piece by herself and sells them for Bt50 to over Bt300.
She spends time after school making the products. She takes orders for once-a-week delivery.
“I’ve run @DIY Tattoo for three years. It helps me earn over Bt10,000 a week at least. I can take care of my own expenses,” she said.
This is an example of how a teenager can use technology in the proper way. Not only Fern, there are also so many people other making extra income from doing e-commerce via social media, instead of only being social with friends and only chit-chatting.
Social media can be applied and turned into such a good thing.