The world’s purchasing behaviour shifted online in 2022.
This is true even for developing countries, like Ekshop in Bangladesh, Tokopedia in Indonesia. The pandemic has accelerated e-commerce adoption and also attracted significant funding interest in this sector.
Quick commerce (Q-commerce) companies promise ridiculously short delivery times, catering to the consumers’ demand for instant gratification. Blinkit and Zepto can deliver within 10 minutes in a big country like India and have raised millions of dollars of funding last year.
Social commerce companies allow you to buy the fancy shirt that someone is wearing on Instagram immediately and have it delivered to your house. While the commercial viability of these companies is still up for debate, online purchasing is here to stay.
Today, over 440 million people are online in Southeast Asia. According to a report by Google, Temasek Holdings and Bain & Company, 80 per cent of them made at least one online purchase.
More people are expected to come online over the next decade. I am sharing my thoughts from Digital for Development’s perspective.
People in rural/undeveloped areas are overpaying for their goods
I remembered from my first trip to West Papua, Indonesia — specifically to Baliem Valley and Wamena. It was a rural area, where electricity and clean water is not readily available. The net average monthly income is about US$200.
The tribal people need pigs for their ceremonies. And a tiny pig costs US$150 there, while I could get a well-roasted small pig in Singapore at US$130.
Also Read: Quick commerce startup Astro raises US$27M Series A led by Accel, Sequoia India
Electronic items are generally 20 per cent to 40 per cent more expensive in remote areas, how do people with lower income opportunities afford these goods?
Social commerce can lead to predatory behaviours
Social commerce has evolved from in-person Tupperware parties and multi-level marketing to the digital world.
In ASEAN and other developing countries, the sense of community is strong and the mistrust towards “outsiders” is high. People believe what their family or friends tell them, over any other information sources. Hence some MLM companies are more successful in developing countries than in markets like the US.
Today, social commerce lives on messaging apps and social media. Can we trust social media influencers? How transparent will people be, when recommending products to their friends?
I hope that this does not negatively impact the social fabric.
Investment in developing countries is needed for economic prosperity
While it is still unclear if Q or social commerce companies are going to be profitable for their investors, I am excited about how these investments will improve logistics to rural or remote areas. As a consequence, we are able to develop better infrastructure and bring prosperity to all parts of the world.
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