According to a research by PayPal, social media channels are no longer just networking platforms but have become digital marketplaces, where merchants and consumers buy and sell goods and services. Social commerce (s-commerce) is driving the adoption of digital payments as users demand more seamless and efficient payment experiences.
IMAGE FROM PIXABAY.COM
PayPal’s study “Beyond Networking: Social Commerce as a Driver of Digital Payments”, highlights the rapid growth of s-commerce in across seven markets in Asia, including the Philippines. 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 of 67 million active users in the Philippines are adding to the lure of s-commerce. Seventy-five percent of those surveyed said that it is easier to set up their business on social media, while 55% liked the idea of leveraging their network of friends and relatives.
According to the survey, 87 percent of Filipino merchants are currently selling on social media, with 74 percent them accepting digital payments, of which e-Wallets/mobile wallets is the most popular. Within this segment, PayPal (87%) emerged as the most used payment platform in the region by merchants on social media, followed by GCash (54%) and PayMaya (39%).
The proliferation of s-commerce is expected to continue, with 69% 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.
Social commerce has the potential to be a key enabler of economic empowerment and greater financial health, with 96% of merchants surveyed saying that social commerce has significantly improved their financial condition.
“The role of social media has evolved tremendously since it was first introduced a decade and a half ago, and the platform is now being used as a channel for customers to discover and purchase products immediately. This could not have happened without innovation in payment technology,” said Rahul Shinghal, managing director for PayPal Southeast Asia and head of merchant support for PayPal Asia Pacific. “At PayPal, we see digital payments as an innovative tool that goes beyond being just a form of transaction. Digital payments is an enabler of economic empowerment and improved financial health through providing convenient and secure facilitation of cash flows.”
In addition to established businesses, social 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 monetize their skills and hobbies.
Among consumers surveyed, 32% of Filipino respondents with Internet access said they have already began transacting on social media. Of those already transacting on social media, 94% said that s-commerce has empowered them to become independent and 94% see it as a way to monetize 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-seven percent 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 Philippines government have taken their part in encouraging Filipinos to adopt digital payments such as the National Retail Payment System (NRPS) that aims to offer safe, efficient and reliable payments system that is interconnected and interoperable. When the potential of digital payments in social media is fully realized, 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,” said Rahul.
As Philippines takes the lead globally for longest time spent on social media (approximately 4 hours per day), small-to-middle size businesses have more reasons to dial up their social media footprints and capitalize on the large user base to grow their business. It is a worthwhile opportunity for vendors to better engage with buyers and create meaningful disruption in a space where the buyers are frequently present. For their customers, it will mean a more frictionless form of shopping or transacting at the moment of discovery.
