Social selling: The future of ecommerce in the Middle East?
Within the space of a few years, social media has become an integral part of everyday life.
Facebook, Twitter, Instagram and other platforms continue to engage users on a daily basis, and there are no signs of it slowing down.
In fact, according to a recent Digital Media Science report, 42 percent of the Middle East population uses the internet, of which more than 88 percent logs on to social media every day.
Naturally, businesses were quick to identify the huge potential to reach consumers socially, and it’s rare to see a well-known company or startup without a Facebook or Twitter page, for instance. But with the fast rise of Instagram use in the region, we’re now witnessing a new phenomenon – social selling.
Social selling is simple. It usually involves developing relationships as part of the sales process through Instagram, Pinterest and similar sites, with social selling techniques including sharing relevant content and communicating directly with potential buyers. Rather than interact with someone in a shop, customers can speak with their ‘virtual’ seller online.
Some of the first entrepreneurs to tap into this in the region were small businesses and individuals. Vanillasukkar, shares photos of its desserts on Instagram that buyers can then order using WhatsApp. UAE-based designer Tamara Al-Gabbani adopted a similar technique, by advertising her abayas on her official Instagram page and asking sellers to text her if interested.
Now, we’re seeing apps and websites adopt a similar sales technique for their ecommerce ventures. And they’re certainly attracting attention.
Here are three to watch:
From cofounders Tariq Zabian and Alex Hutley, Shedd allows users to post fashion items – whether second-hand or new, by small or independent businesses – for sale quickly and for free; with potential buyers able to filter items by those listed by friends and contacts, or users near them. ‘Shedders’ can like it, comment and hashtag images, and have conversations with sellers. They then arrange between themselves payments and pickups.
“Providing a similar user experience to Instagram worked for us, because the user found the Shedd journey familiar,” Zabian told Wamda. “However, unlike Instagram, users of Shedd can complete the transaction – whether buying or selling – via the same app.”
And the app comes with serious backing. In September 2015 at the time of their launch, it was announced that Dubizzle – a former employer of Zabian and Hutley – invested $1 million in the fashion marketplace, the UAE-based company’s first ever investment on a new brand in its 10 years of trading.
“Shedd as an idea came from witnessing behavior and seeing an opportunity to fill an underserviced need,” said cofounder Hutley. “Particularly in this market, we established the high levels of potential inventory in everyone’s wardrobe, an engaged community looking to express themselves, and strong levels of digital maturity.
“Based on this, we built the simplest product we could to test the real demand. When you get a certain level of traction and engagement in a beta product, then this starts to become appealing to investors.”
The only app here that is functioning as a full ecommerce platform, with payment and delivery dealt with through the app, is that of Melltoo. Targeting a wider market that goes beyond fashion they also offers an Instagram-like experience for used items..
“Melltoo was born from the frustration of trying to buy something from traditional classifieds websites,” explained cofounder and COO Sharene Lee. “We were faced with untrustworthy sellers, scams, and a lack of proper info when making a decision. In addition, buying and selling was inconvenient and difficult; people are difficult to contact, meeting strangers and getting lost are the norm when using classifieds.”
Since its launch in March 2014, the UAE company says that the app has been downloaded 250,000 times, and in April of this year, they closed its seed-funding round with a $205,000 investment from Womena, Turn8 and Dubai Silicon Oasis.
“Social selling is not only interesting at the moment, but looks like it will become the dominant model in the future,” Lee continued. “Not only are people more interested in who they are buying from, they also want to have a more interactive buying experience. They are influenced in their purchases by the opinions and actions of others as expressed in social commentary.”
It’s not just apps that are taking on a more social approach to selling; even more traditional website models are adopting social features. Ezheights.com is an interactive classifieds platform where users can buy, sell, connect with users and comment on items.
“When I think of traditional town market stalls with their bustling hubbub of traders and customers, that’s how I envisage the natural evolution of Ezheights.com,” said managing director Adham Saleh.
“In today’s uber-connected world where so many of our transactions and communications are done via smart phone, [we are] embracing this interconnectivity… and taken it a step further by enabling our community to create user profiles in which they can comment upon, review, chat and personally follow other members – or even choose to block them.”
The new Ezheights website – which is a self-funded venture with no plans to go public at present – includes buttons where users and sellers can connect directly via LinkedIn, Twitter and WhatsApp. Users can also update their status to see what products are being bought or sold in which areas of the UAE.
“Social selling is a major trend at the moment and will continue to be so for a long time,” he continued. “People enjoy using social websites [...] you get to have a more personal experience.”
The future of social selling
In terms of attracting investment, the future of social selling in the Middle East is promising. Although it will take a particular type of investor to see its full potential at present, explained Saleh.
“Investors are usually interested in ROI [return on investments] and financials, and how fast they can make their money back,” he said. “But investors who [understand] the IT industry will definitely be interested as this is the main trend now.”
“Some investors get it, some don't. Investors who have ecommerce and marketplace expertise see that both ecommerce and traditional classifieds are ripe for disruption,” she elaborated. “However, given how new the concept is, it still isn't clear how things will play out. The big social networks like Facebook, Twitter, Instagram and Pinterest are all moving in the direction of facilitating ecommerce by integrating ‘Buy it Now’ buttons and payments in user feeds.
“The legacy ecommerce businesses haven't quite caught up yet so there will be some fall-out in that space.”
Shedd’s Hutley added: “As payments and delivery services improve, and as location technology drives chance encounters and trades, we’re going to see a very fast-paced and exciting way of trading – far beyond the traditional retailer-to-consumer relationship.”