Vietnamese consumers show preference for conversational commerce to e-commerce

August 23, 2021 | 11:05
In his most recent open sharing, Huy Nguyen, regional country lead, Growth Businesses, Southeast Asia at Facebook, has highlighted to Thu Huong the value of conversational commerce and how it is transforming businesses in Vietnam and across the globe.
Huy Nguyen, Regional Country Lead Growth Businesses, South East Asia, Facebook
Huy Nguyen, regional country lead, Growth Businesses, South East Asia, Facebook

In light of the pandemic, we are more aware of the value of maintaining conversations, not only between people, but also among people and brands. Becoming “conversational” is so important for businesses nowadays, yet the concept of “conversational commerce” is still be quite vague. What is “conversational commerce”, and how is commerce strengthened with conversations?

Well, the truth is that, being conversational is so important to all of us today, when COVID-19 is shutting down doors and forcing people to minimise our daily interactions with each other. More than ever, people realise the need to keep our conversations going on and on no matter what, to not feel isolated, to update and get updated, and to spread the message that we are doing fine and we will all get through this hallenging time together.

Now for businesses, being conversational means that they are going the extra mile in learning the needs and wants of customers, while at the same time being open to all feedback to improve their products and services. The process of taking questions and giving answers is no longer a passive activity but a two-way, constructive interaction involving both brands and customers. By initiating a chat, each party embarks on a true discovery journey, where opportunities await.

With that awareness, conversational commerce (CC) is not an abstract concept at all. It simply means establishing and maintaining meaningful conversations between sellers and buyers, utilising the chat function via messaging or e-commerce platforms, which may result in purchasing decisions. Certainly, purchase is just one goal of CC, because more than that, we should aim for other long-term goals such as brand awareness and preference, which will encourage people to come back, repeat purchases, and become loyal customers.

So how developed is the CC market across the region and particularly, in Vietnam? What are the key drivers for CC, and as a consumer, what can I expect to benefit from it?

Even before the prevalence of COVID-19, businesses all over the world have realised the indispensability of starting and maintaining meaningful conversations with customers, leveraging technologies and digital platforms. Digital-backed conversations mean more and more to commerce in Vietnam and globally.

In one of our studies with Boston Consulting Group (BCG) back in 2019, surveying 8,864 people across nine countries, including 1,310 respondents from Vietnam,we found that Vietnam was the second most advanced CC market, with second highest CC influence and purchase penetration amongst assessed markets. Specifically, among surveyed Vietnamese users, 36 per cent made a purchase via chat and 53 per cent using chat along their buying journey. This trend was expected to grow, as 95 per cent of CC buyers in Vietnam planned to maintain or even increase their CC spending in the future. Facebook and BCG also learned that CC helped bring more shoppers online for the first time, with more than 50 per cent of buyers in Vietnam joining the online buying universe through chat.

Both businesses and consumers benefited signicicantly from CC. Initiating conversations, online presence in general and messaging platforms in particular, give businesses and consumers greater opportunities to interact and exchange in real time, with high levels of personalisation and details. In our most recent online study carried out by Decision Lab this June, surveying 433 Vietnamese, people aged 18-55 who have made a purchase via chat during the past one month by the time of the study showed a preference fo CC to e-commerce, typically thanks to faster response time (55 per cent) and simplicity in the purchasing process (49 per cent).

More importantly, we see a new generation of customers who are driven by discovery and turn to CC to make specific purchase decisions, as well as strengthen their interactions with businesses throughout the purchase journey. Our June 2021 study found that consumer-merchant interaction is most important in the "Consideration stage", as 59 per cent of surveyed consumers wanted to chat when considering or researching information about a product. 66 per cent of consumers are willing to keep in touch with merchants after the purchase. Besides buying, consumers want to receive updates about promotions and new products or services, and Facebook Messenger is by large their favourite channel to receive these updates.

Social and messaging platforms seem to be powerful tools empowering CC and supporting businesses in this challenging time. What is the role of messaging in consumers’ discovery journey and how does it help turn discovery into demand?

Messaging means a lot for us as people living in communities, it helps us stay connected and share experiences between distances. Yet it also helps build and maintain more quality relationships between people and brands, and help businesses and organisations deliver more and achieve more, especially during crises.

In fact, messaging and social media can be seen as the key drivers behind the dramatic transformation of CC. And I am proud to say that we have built and been continuously improving a strong ecosystem for CC, where Facebook and its Family of Apps are among the most popular and potential channels for CC in Vietnam.

In 2019, we found that two out of three Vietnamese CC buyers discovered CC through social media such as advertisements in social media feeds and messages from sellers. Our study last June further confirmed that Facebook Messenger and e-commerce are the two most popular channels for CC, confirmed by 85 and 68 per cent of respondents, respectively. When it comes to advertisement, relevancy of the product (66 per cent) is the best trigger to get consumers to start a conversation, followed by promotions and free shipping.

Instagram Direct and Livestream are also rising channels. When it comes to making chat purchases via Instagram Direct, 61 per cent of online shoppers make chat purchases at least once a week, and fashion/clothing and beauty products make the most common purchase decisions. For Livestream, 60 per cent of consumers make chat purchases on such a frequent basis too, and fashion/clothing is typically the most purchased product category via Livestream.

How would you say Vietnamese businesses can make the most of CC?

Actually, we have accumulated a series of success stories from our partner businesses who have taken our advice and optimised their conversation with customers, such as PNJ, La Roche-Posay, or Pepsi. The key to success is to be very straightforward and simple.

First, businesses should be able to provide fast, detailed, and personalised information to customers in a professional manner. Prepare answers in advance for customers’ frequently asked questions. Typically, a few question types drive the majority of customers’ questions.

Second, businesses should have multiple payment options in place to cater to customers’ diverse preferred payment methods.

Third, ensure that your ads stay true to your products and services and timely update your customers with all promotions, new products or services, or free delivery policy, which will certainly encourage repeat purchases.

And finally, do leverage our Family of App as useful tools to manage and enhance your conversations with customers. For example, Facebook’s Unified Inbox, or FBP's inbox management service will help manage in-coming conversations from various sources effectively. Businesses should also explore Instagram Direct and Livestream, as I have mentioned their powerful capability to help you make meaningful conversations with customers.

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