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, Blibli.com, etc.) have yet to capture this $3 billion market that is facilitated by platforms like Facebook, WhatsApp and Instagram.
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.”
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 smooch.io “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.
Easily bill and accept payment from customers
We understand that accepting payments is a complex matter. Integrating with each payment partner can be difficult and time consuming. Get started with Xendit and start accepting payments from:
- Bank transfers – Indonesia’s Big 4 banks through virtual accounts
- e-Wallets – Indonesia’s major e-Wallets including Ovo, Dana and LinkAja
- Card – debit and credit cards from all over the world
- Retail outlet – Alfamart or Indomaret, perfect for unbanked and sub-urban customers
Integrating with Xendit is quick and easy, no technical skill required. Our payment link product allows you to bill your customers easily:
- Start accepting payments by generating a payment link from your Xendit dashboard.
- Share the links via your chat commerce channel (Whatsapp, LINE and more)
- Accept real-time notifications when your customers paid
We’re here to help
For many businesses, accepting payments online is new territory, but we’re here to help. We have helped 1000s of businesses come online. If you have any questions, we’re eager to help! You can contact us via live chat when you’re logged into your account.
Find out more about Xendit, or sign up to try our dashboard today
