‘Conversational commerce,’ what?! Filipinos are actually into it

MANILA, Philippines — “Conversational commerce” may be a phrase alien to many since it may come across as very complicated and technical, but it is something that many Filipinos are actually doing today.

According to a recent study conducted by Facebook and Massachusetts-based Boston Consulting Group (BCG), conversational commerce is “the use of chat between people and businesses with the intent to drive the purchase of goods and services.”

In essence, conversational commerce is the process of an online chat between the buyer and seller leading to a purchase or further sale of other related items – or in simpler terms, when online conversations and commerce combine.

The study, which was presented to select members of the media in Taguig City, showed that this activity has become more popular among Filipinos.

This was evident by the fact that Filipinos have some of the highest level of awareness of conversational commerce among nine countries covered by the study that included the United States, Brazil, India, Mexico, Malaysia, Indonesia, Thailand, and Vietnam.

“Across the Philippines, we’re seeing people adopt conversational commerce because it combines the best of both worlds – the conversation they could have in a physical store with the ease of shopping on e-commerce retail channels,” said John Rubio, Country Director of Facebook Philippines.

The study showed that 97 percent of those surveyed said they plan to maintain, if not increase, their spending through conversational commerce.

Further, the study found that conversational commerce also creates new online shoppers as 42 percent of the respondents said their first online shopping took place through conversational commerce.

Buyer-seller conversations

Nine in ten respondents said they prefer to buy from businesses that they can message for various reasons, which Rubio considers as the four categories explaining the trend of conversational commerce in the country.

This includes convenience or the ability of the buyer to inquire for further information on products or services regardless of time; confidence or building trust between buyer and seller; flexibility that covers price negotiation; and exclusivity or the personalization of product and at times, service.

“People expect to have relationships with businesses that drive utility and value for them, and respect their time,” Rubio said.

Regarding products bought through conversational commerce,  72 percent shop for clothes, 55 percent use chat to order food delivery, and 45 percent use chat for skin and hair care products.

On the platform used for conversational commerce, the study said 48 percent of buyers chat through e-commerce sites while 42 percent use social/messaging platforms like Facebook and Messenger.

Where it started and where it is headed?

Rubio said early cues of conversational commerce started to take place around 2017 and 2018 when buy-and-sell Facebook groups started to surface and grow its members.

“People were on the platform. People were connecting with each other and because the Philippines had all these barriers for payments, deliveries and all sorts of stuff, it was happening organically,” Rubio noted.

Rubio also said he sees conversational commerce as an “equalizer” that allows smaller businesses from entering the market.

“The barriers to entry are almost non-existent. You open up your Facebook page, free. You use Messenger, free. You set up a bot, still free. And now that enables anyone to get into the business,” Rubio explained.

So where is it headed a few years from now? For Rubio, conversational commerce “would be a substantial portion of actual e-commerce, even much more than it is now.” /kga