“Never in my wildest dreams could I have imagined walking down a small street in an outer city district in Saigon/Vietnam and go to a social seller specialized in selling Japanese and Korean stroller.”
Google/Temasek released the latest e-eConomy report for Southeast Asia (SEA) with some astonishing numbers: SEA eCommerce has been growing by 62% on a Compounded Annual Growth Rate (CAGR) and is expected to grow by 39% until 2025. Main growth drivers are online shopping festivals, next-day delivery and seller development.
Zooming into Vietnam, the numbers are mind-blowing: e-Commerce growth (12x in 4 years!) unlocks opportunities for Vietnamese small- and medium businesses. And the CAGR are expected to rise by 49% until 2025. Most online retailers are still operating with mutli-million dollar losses (1) though to gain market share but there is a big trend coming from emerging markets especially in Vietnam: social selling.
Social sellers are small individual sellers or “mom & pop shops” that are using social media to promote their products or services. Usually, the actual buying & selling transaction is done offline (after you checked the product) but they are harnessing the reach of existing social media platforms so they can sell to a wider audience.
There were more than 27,000 facebook accounts (2) in Hanoi & Ho Chi Minh City (HCMC) alone in 2018 that used social media networks as a retail platform according to local authorities. There are supposedly about 50 young Vietnamese below 24 years old who have become millionaires from social selling. I can imagine that this number is increasing with the explosive growth that is expected in eCommerce.
Unfortunately, it is difficult to find accurate stats about social selling but it is estimated that 50% of all eCommerce transactions are done via social sellers compared to the established eCommerce players in Vietnam (3). And most of these social sellers are run by mothers “who often start as a way to supplement their income when they are on maternity leave”. (2)
So what are the advantages compared to big online/eCommerce retailers: often times you find specialized shops that allow customers to physically check the product first before paying and offer more flexible return policy. Hence, this kind of eCommerce is fundamentally changing consumer behaviour.
This has been highlighted in the Google/Temasek report that there are fundamental changes in consumer behaviour which started with ride hailing (creating thousands of additional “small entrepreneurs”) and accelerated by e-Commerce:
I wanted to show a real world example that happened to me a couple of weeks ago which showcases how e-Commerce and especially social sellers changed the way how a consumer is searching, evaluating and buying a product in Vietnam.
Our first boy was born in mid-April 2019. My partner is based in HCMC and we decided to upgrade to a better Japanese or Korean stroller for our weekend walks. As you know, I am a big believer of buying high-quality second hand (vintage) goods – especially as no one will notice the difference of a new vs vintage product (read also: how to live like a millionaire without spending a million). So this has been the process for social selling:
- Following a social seller: My partner asked via facebook her friends whom to follow and multiple people linked us to Yensmall Tran. So we both started to follow him.
- Product Updates right to the Newsfeed: over the next couple of days, we got regular updates about some of his new products, testimonials and special offers
- Confirm interest and meet for physical evaluation:
After a couple of days, we found a product series that we liked so my partner tagged me on the post. The following weekend we visited the seller.
NOW, please fasten your seatbelt. In the past, I would have never, ever found nor visited this seller. Just look at the pictures and get a sense of my new shopping experience:
We walked down the street below, passed the local “meat shop”, walked by some living animals (no, not dogs but rooster) and all the way at the end we had to “turn right”.
Once we arrived, we were welcomed by the owner who showed us his full inventory and gave us a detailed overview of all Japanese & Korean products.
Yes, this is not your high-end shopping experience you get in a newly developed mall but the seller was knowledgeable and showed us each product with highlights (and what to look at). It was 70-80% off the retail price and the whole experience was personal. Not only because it was on the ground floor of his house but he followed us on facebook too and had already prepared 2-3 recommended strollers. He also offered us a 3-months return warranty in case we face any issues with one of his products.
At the end, we agreed on a price and paid via ZaloPay. So we didn’t even have to bring cash with us: Welcome to the power of social seller in the 21st century.
On the way back home in the car I was thinking the following:
- Never in my wildest dreams could I have imagined walking down a small street in an outer city district in Saigon/Vietnam and go to a social seller specialized in selling Japanese and Korean stroller.
- I guess never in his (=social seller) wildest dreams would he have imagined that a 1,95m Austrian is visiting his living room to buy a Japanese stroller
- Technology can not only connect people but create completely new business opportunities for small, independent seller
I believe this is one of many stories about social selling but this one definitely left a memorable impression (next to the meat shop on the street and rooster): we are experiencing a big paradigm shift that is happening next door.
Thanks Kat for the support writing this article!