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Sell online easily with chat commerce

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Informal commerce, such as transactions made via Instagram, Facebook, or WhatsApp is especially prevalent in Indonesia. According to a survey conducted by PayPal and Blackbox, 80% of Indonesia’s SMEs merchants sell their products in social media platforms. The trend is enabled by Indonesian internet users, where according to The Jakarta Post, the average Indonesian spends 3 hours and 26 minutes browsing social media platforms, the fourth highest globally.

McKinsey reports that ~40% of e-commerce transactions in Indonesia are through informal commerce, where product display, payment and delivery are conducted off-site. Formal e-commerce (Tokopedia, Bukalapak,, etc.) have yet to capture this $3 billion market that is facilitated by platforms like Facebook, WhatsApp and Instagram.

Online commerce statistics

The Rise of Chat Commerce

Latest trend in social commerce includes the rise of conversational commerce. The term was first coined by Chris Messina in 2016, referring to an intersection of messaging and shopping. It refers to trends where businesses interact with customers through messaging apps like WhatsApp, LINE or WeChat.

“Conversational commerce includes customer interaction with a human representative, chatbot, or a mix of both. With conversational commerce, consumers can ask questions, conduct product research and get personalized recommendations by simply contacting the business through chat messages.”
Online commerce types

Rapid growth in conversational commerce globally is attributed to its convenience with a mix of human touch. This interfaces across discoverability and product recommendations, that further reassures and affirms customers on their purchase decisions. According to “State of Messaging 2019” reports, 83% of customers contact businesses to learn more about their product and services. Messaging apps makes it easier for businesses to respond to enquiries, and in a more timely manner

Especially in a market like Indonesia with a high context culture, setting up and maintaining open customer communication channels is crucial. In Indonesia, WhatsApp and Line are two of the most popular messaging apps among businesses to interface directly with customers. This is due to the high number of existing user base in both apps. About 40 percent of Indonesians – at least 100 million people – are using WhatsApp. Meanwhile, Line has 90 million Indonesian users. Both apps have added their own unique features targeted towards business users.

WhatsApp Business

WhatsApp launched WhatsApp Business in 2018. It includes features that encourage in-chat transactions to happen, such as:

  • Set up a business profile to show business information
  • Create an automated reply whenever customers contact you
  • ‘Quick Replies’ features which let you save and reuse messages you frequently send so you can easily answer common questions in no time
  • Create a product catalogue to showcase goods so people can easily browse and discover something they would like to buy

Line for Business

The Japanese Platform, LINE, also has its own business features. With LINE, businesses can:

  • Set up an Official Account to show business information
  • Create an engaging post on timeline
  • Broadcast messages to contact lists
  • Create an automated reply whenever customers contact you

Roadblocks to Chat Commerce uptake

While chat commerce can help businesses reach out to customers easily, it is not entirely without friction. Reducing checkout frictions, particularly related to payments can be a challenge, especially in Indonesia.

Xendit internal data shows that Indonesia’s payment market is fragmented, with different preferences spanning over 17,508 islands across the archipelago. None of the major payment players (including banks and e-wallets) holds more than 20% of total market share.

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