E-commerce has shifted into social commerce to meet economy trends. Indonesia is the most populous country in Southeast Asia, with over 210 million digital users, and the largest user base. Platforms like TikTok, Instagram, and Facebook Marketplace are heavily integrated into the shopping habits of Indonesians.
Social media commerce became popular as mobile-first shopping behavior started to be more common. Many e-commerce transactions are initiated through social media ads or direct links. Purchasing has been faster with just one click away when social media marketing becomes a trend.
Indonesian consumers trust influencers, reviews, and peer recommendations on social media. As a result, influencer-driven marketing is working on Indonesian youth, where trendsetters lead the viewers and followers to buy online.
Indonesia's massive buying power has created a hub for cross-border trade in Southeast Asia. Neighboring countries like Malaysia and Thailand rely on Indonesian platforms to sell goods. For instance, Malaysia exported over USD 1 billion worth of goods to Indonesia through platforms like Shopee in 2022.
Social Commerce Expansion Model
One of the most impactful social commerce is TikTok's marketplace creation called TikTok Shop. Collaborating with a leading e-commerce app based in Indonesia, Tokopedia, TikTok Shop gained massive success, especially known for its live-streaming e-commerce.
Read also: Shopee and Lazada on Alert: TikTok Shop Emerges as a Major Contender in Southeast Asian E-commerce
Observing this success, TikTok replicated the Indonesia-first model in other Southeast Asian markets, such as Thailand, Vietnam, and the Philippines. According to TikTok's reports, Indonesia's social shopping culture influenced the emergence of "TikTok Shop University" in Malaysia and the Philippines, modeled after similar programs in Indonesia.
Despite being less popular than TikTok Shop, Facebook Marketplace still dominates in Indonesia, enabling small businesses and informal sellers to attract unique customers.
Now called Meta, the company planned to expand its marketplace features in countries like the Philippines, Thailand, and Vietnam. Meta has also cited Indonesia's social commerce ecosystem as a case study when introducing enhanced marketplace features in other Southeast Asian countries.
Livestreaming Strategy
Reports from Shopee, originally a Singaporean company, show that Indonesia adopts livestream shopping and generates the highest e-commerce traffic in the region. Platforms like Lazada Vietnam have introduced live auctions, inspired by similar models in Indonesia.
Strategies like flash sales during live streams and influencer-hosted sessions also become effective in attracting consumers. Indonesia's strategy like Shopee’s 12.12 Birthday Sale or tanggal kembar (twin date & month), which features giveaways, discounts, and entertaining hosts, is now replicated with localized versions across SEA.
Influencer Marketing
The rise of smaller influencers, such as micro-influencers and nano-influencers have also been proven efficient in targeting authentic marketing campaigns. Platforms like TikTok and Instagram reported higher engagement rates in Indonesia when micro-influencers promoted local brands. This practice not only increases sales but also promotes local business, which was complimented and replicated by neighboring countries.
Indonesian brands are also known to collaborate with long-term brand ambassadors. Indonesian influencers integrate entertainment and storytelling into their campaigns, turning advertisements into engaging content. Multinational collaborations are also impactful with brands that operate in multiple countries in Southeast Asia.
This trend, known as shoppertainment, was adopted by Indonesian influencers to blend entertainment and storytelling into their advertisement. The result of the engaging content thus caters to more influencer collaborations.
