The evolution of e-commerce to social commerce
by Jonathan Wong, firstname.lastname@example.org. Posted on October 7, 2012, Sunday
Groupon – Banking on a good deal
Banking on the deal hunter in all of us, Groupon has been booming since its inception in the Malaysian online market scene last year. Operating in the country since January 2011, the online ‘deal of the day’ website has gone on to grow from one milestone to another and is today the largest group purchasing platform in Malaysia with expansion to Penang, Ipoh, Johor, Kota Kinabalu and Kuching within two years of operations.
Joel Neoh, vice president and general manager of Groupon Southeast Asia and India, stated that he was very pleased to report that Malaysian consumers had been particularly responsive towards the group’s buying business platform, and was amongst the most active early adopters of Groupon when compared with anywhere else in the world.
The speed of the uptake alone showed the fast emerging e-commerce sector that was experiencing a rather sluggish start in the late 90s due to the economic situation.
He explained that social e-commerce had definitely given new life to the vibrancy of consumerism in Malaysia as it blended the availability of amazing deals, the best prices, reliability and convenience into simple clicks of a button.
This in turn had given numerous small medium enterprises (SME) and individually run businesses the opportunity to tap into market opportunities which previously had not been open to them, which in many instances had allowed businesses to flourish. Having said that Noeh believed that Malaysia still had a long way to go to fully optimise the opportunities which social e-commerce could provide.
“The response which we received when we first began was tremendous and within the first five months of our establishment in Malaysia, we managed to gain well in excess of 50,000 subscribers driven principally by word of mouth and through social media channels alone and without any need for external advertising initiatives,” Neoh enthused.
Neoh also stated that the market revitalisation despite working wonders for Groupon, were also benefitting the market and said that, “Even as a relatively new phenomenon here in Malaysia in terms of market maturity, the potential of the group buying industry in Malaysia remains to be vast.”
“Unlike traditional e-commerce which is largely ‘search’ driven, where a customer would already have in mind what he or she would like to purchase and therefore enters the purchase parameters into a search engine which would then list out the top items or deals for said item, nowadays businesses born in the era of social media, social media channels are the primary means through which most online retailers and e-businesses reach out to customers,” Neoh stated.
He further added that there was a significant shift in trends where the market was moving away from traditional ‘search’ centric platforms towards more developed ‘social’ ones in the online retail/ online marketplace.
“At the end of the day, consumers would trust and rely on the recommendations and feedback of their friends, family and fellow consumers above anything else. Social e-commerce platforms facilitate the ability for such activity to occur vibrantly and constantly thus generating tremendous push towards what they have to provide,” he enthused.
He added that successful social e-commerce platforms were the ones which were able to deliver reliable and trustworthy services so as to foster positive experiences which were then amplified through social media channels.
Neoh mentioned that Groupon was built on this mentality and took advantage of the push factor of social engagement. This was where people shared a list of amazing deals with their friends as well as through social media platforms such as Facebook, Twitter and Foursquare, which encouraged them to try out new products and experiences.
The strategy took off like a rocket but despite the positivities around the current e-commerce wave, Neoh said Internet safety was a key concern and that online retailers should take measures to ensure adequate safety features were in place to safeguard both paries.
“We at Groupon have taken extensive steps to ensure that customer data is kept private and which is why we’ve chosen to work only with trustworthy and reliable payment gateway partners such as iPay88 and PayPal,” Neoh stated.
Touching on future trends, Neoh believed that there was still room to improve in the current online commerce market stating that even in Groupon, “We anticipate that customers will enjoy even wider varieties of choices as more and more merchants from increasingly diverse fields and industries realise the potential benefits of Groupons to their business strategies.
“For example, we have already expanded our range of deals to incorporate travel with our highly popular Groupon Getaways and moving forward,we will look to further enhance the diversity of the deals provided so as to fulfill all of the needs of our customers.”
At this point in time, a key opportunity for the industry would be for the Malaysian government to develop and provide specific opportunities in social e-commerce. While the government is extremely supportive of SME’s with numerous initiatives, such as the SME Financing and SME Revitalisation Funds readily available, specific engagements should be done to foster an appreciation for the opportunities of social e-commerce as business and economic multipliers in particular.
Moving forward, online retailers and businesses should be looking at ways in which they could play an active role in assisting SME’s into further incorporating social e-commerce as a core component of their business strategies and hope that the government would provide added focus to the industry which had the potential to develop into a significant component of the nation’s economy.
“The advantages of social e-commerce are that it encourages customers to try out new products and services which they would likely not have thought of doing in the past, and as the Groupon phenomenon continues to grow at a wild pace here in Malaysia, we want to further create more opportunities for Malaysian merchants to reach out to previously unimaginable heights,” said Neoh.
“The power of social marketing is fast becoming a leading channel for e-commerce throughout the world, with many merchants already seeking its integration into their business models. To that end, we will continue to develop new partnerships and working relationships to fulfill the inner desires of our customers by ensuring they not only benefit from the best deals, but also from the best customer experience possible.”