How COVID-19 is shaping the future of commerce for good

At the end of 2019, I was planning for the year ahead with my teams (as we do every year) and keeping our pulse on the major social trends influencing businesses in Asia Pacific. The rise of mobile, messaging, ecommerce and conversational commerce along with the increasing popularity of video in all its diverse forms—ephemeral, on-the-go, long-form and live video—would inform our approach to connecting people and businesses over the next few years.

But COVID-19 has taken the trends that might have seen wider adoption over the next five years and compressed them into a time span of months. Necessity has proven to be not just the mother of invention, but also of adoption. The meme which personifies COVID-19 as the digital transformation officer driving change is popular, because it is true. Across Asia Pacific, consumers are reporting a 32% increase in online shopping activities, and a 42% increase in home streaming.

This is why businesses of all sizes are being forced to change their model and adapt to selling online. Even those who historically viewed digital as a secondary channel, are having to reorient every aspect of their business to enable online shopping. It’s also why Facebook has made its move into shopping with our recent announcement of Facebook Shops—a way for businesses to set up a single online store across Facebook and Instagram for free.

While physical stores will always be important to the social and economic wellbeing of local communities, it’s clear that ecommerce is here to stay. It will continue to power the isolation economy even as countries like Singapore start to cautiously relax social distancing measures.

What does this mean for the future of commerce? And how can businesses adapt?

First, businesses will have to find creative ways to redesign experiences that are completely reliant on in-store footfall. The variety of online shopping modes will continue to expand in the isolation economy: shopping directly from social channels, live video, messaging with businesses, click-and-collect or subscription services—all these look poised for explosive growth. We are also seeing brands and social platforms explore VR experiences that can cater to the human need for tactile and visual connection. If anything, people have discovered there is no one way to shop and it has created an openness to new ways of discovering products and shopping online.

Next, businesses need to attune themselves afresh to people’s preferences and constantly learn from their creativity. Nowhere is this more pronounced than in Southeast Asia, home to the world’s fastest growing digital economy. According to a study by Bain, by 2025, there will be 310 million digital consumers in Southeast Asia. By then, the study estimates, online spending will outpace the growth of digital consumers by a factor of three. Southeast Asia already leads the world in conversational commerce—with people increasingly using chat to buy and sell. It is here that enterprising people like Anurak Saruethai of Hasun Seafoods built a profitable dried seafood business by hacking live streaming for daily live selling. When we originally built Facebook Live, we probably had not imagined this as a possible use case. Yet, businesses are now using live video to launch a range of things—from shoe stores announcing new sneakers to beauty influencers trying on different lipsticks. People like the immediacy and connection of shopping real time. Finally, businesses need to pay attention to the fundamental need that buyers and sellers have to connect, chat and enjoy the social value that makes a transaction fun.

So while we do not know how long the shadow cast by this global pandemic will last, we do know that it has and will change the face of commerce for good. We may in fact be going back full circle. For hundreds of years, shopping and buying was a relationship initiated by a person's need, and fulfilled by a shopkeeper's expertise. It wasn't just a conversion, it was a connection. Ironically in this current period of isolation, consumers are still looking for that relationship and connection.

Increasingly, their commercial choices also have a social bent—they want to give a shout out to their favourite local, small business and they want to help their neighbourhood restaurants stay open. They are leading conversations and forming communities even as they shop - they are looking beyond the list of products to the mission and the values the business represents. Speaking from my own experience during this time, I have been drawn to buying essentials like reusable masks from small businesses that are trying to make a positive impact in the world and I see many friends and colleagues taking similar actions. It all leads me to believe that the future of commerce is even more social than we thought it would be.

For the short-term, brands—no matter large or small—need to attune themselves afresh to the demands of social commerce and think of the best ways to connect their products and services to the isolation economy. In the long-term, the responsibility to create better digital experiences doesn’t just rest with the retailers, but with all of the platforms they use to engage customers. These need to go beyond mere advertising solutions and provide seamless customer experiences.

We will continue our commerce work along these lines, and focus on building solutions to help businesses of all sizes thrive online. From your local cafe to medium-sized restaurants to multinationals, our vision is to make shopping seamless and empower anyone to connect with their customers from anywhere.

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Dan Neary is vice president, Asia Pacific at Facebook.