The Social Commerce Showdown: Impulse VS Intent-Driven Strategies

“What we are seeing this year is that nobody can leave each other alone.” – Simon Torring, Founder of Cube Asia.

As Shopee, Lazada, and TikTok begin to look more and more alike, a battleground for market share and profit has intensified. Stepping on each other’s territories and going after each other’s audiences, the question must be asked: Is there room for all social commerce platforms in Southeast Asia, or will one emerge triumphant?

To chat about all things social commerce, we sat down with Simon Torring, the Co-Founder of Cube Asia, a market intelligence company focused on Southeast Asia’s digital economy. Simon joined us on our brand-new season of The Forward Podcast and managed to be the first-ever guest to quote ‘Mean Girls’ and liken it to Social Commerce. Yep, we were surprised too.

Aziza: What I heard from you before was talking about the four different archetypes of social commerce. There’s a lot of value in knowing these. Could you tell us a little bit more about that?

Simon: Yeah, for sure. Social commerce in Southeast Asia was one of the first trends of eCommerce that we started looking at when we started Cube. It’s really because Southeast Asia sits at an interesting crossroads between some Chinese eCommerce influence and some Western eCommerce influence. In this context, new things are emerging as well that we don’t know from anywhere else.

What we noticed was that there traditionally have been social or content platforms on one side that have very high usage, many minutes and many clicks, and just a lot of consumer attention. Then you have the commerce platforms that tend to have much less traffic and much less time spent, but obviously have this amazing business model of being able to sell people stuff. The two would interact with each other through the performance marketing or digital advertising ecosystem. The biggest advertising platforms are those content and social platforms like Instagram, Facebook, Google, or whatever.

What we started to see was that those two types of platforms were stepping into each other’s territories. Some of the eCommerce platforms were launching social features like chat or live streaming. At the same time, some of the content and social platforms were launching more and more of the eCommerce checkout journey within themselves.

I think the best articulation of social commerce now would be TikTok Shop, which has become very big in Southeast Asia. But back when we started this research, we identified four types:

  • Conversational Commerce: This is like the sort of chat and shop stuff.
  • Live Commerce: This has now become large.
  • Social Platform Commerce: This is eCommerce happening inside social apps without needing to leave. TikTok Shop is also an example of this.
  • Community Group Buying: This is a bit more niche. It’s community-based eCommerce models that we mainly see in more rural populations in Southeast Asia, where the end buyers are often consumers that don’t have good access to eCommerce or a lot of trust in eCommerce and hence buy through a reseller.

These are the four kinds, and often they overlap. The same purchase can indeed be touched by three archetypes, no problem.

Aziza: How do you foresee things going down the line for these archetypes, especially with AI in this space?

Simon: I think the most interesting kind of battle we will see this year is that, on one hand, you have what I like to call the intent-driven eCommerce giants. This includes Shopee and Lazada, places that are really good for opening up and searching for a product or going into a category tree to find deodorants or toothbrushes or something like that. Most of eCommerce is intent-driven. Most of the customer journeys are intent-driven, and these platforms are very good at that.

But then, what we’ve seen over the last couple of years on the back of social commerce has been impulse-driven eCommerce, which is what TikTok Shop is fantastic at. What we are seeing this year is that nobody can leave each other alone. The impulse-driven platforms, namely TikTok, are trying to get better at intent-driven eCommerce. TikTok Shop has launched its full shopping center, which is a tab that looks exactly like the homepage of Shopee, funny enough. At the same time, Shopee, Lazada, and other players are investing heavily in live streaming.

What is that Mean Girls reference? “Stop trying to make fetch happen.” It’s like, how much can you invest in trying to make live streaming happen? But they’re going at it, and I think they’re not done. They will do more this year—short films, videos, all kinds of stuff. I think that’s the new battleground: who will eventually win the market share?