Conversation between ChatGPT and Pinosell
Social Commerce in Middle East
Soon after the release of ChatGPT, there were blast of joy and happiness in many people that ChatGPT is now able to do many of the tasks they wished they could avoid doing. This is beside the fat that some people at the same time were frightened of what these robots are going to do in future.
Following my curiosity, I noticed there are many questions still ChatGPT can not answer or you need to ask it in a specific way to be able to receive answers.Considering that she has only access to public information and has been trained with the information available until 2021, I decided to test her knowledge with the information that we had collected over the last few years working on emerging markets such as middle east. Over the last few years, we conducted various research in different part of this region. We collected it through interviews, tests and product launches. Therefore, would it be interesting to test it against what she knows.So in the following, I ask questions and add more context to what she present as her response. You will find my response in italic.
Introduction to Social Commerce
A: What is Social Commerce
ChatGPT: “Social commerce, also known as social media commerce, refers to the use of social media platforms to facilitate the buying and selling of products and services. With the rapid growth of social media, social commerce has become an increasingly popular and effective way for businesses to reach and engage with their customers”
A: well that is true but not fully complete. In majority of cases, there are one or other forms of engaging social media in the selling or buying process. However, there are instances of social commerce that are not necessarily built on top of a social media. For instance, Shopee or taobao also will be considered social commerce through some of their features such as live-streaming. Or whatnot also is a platform that is designed for sellers to do live selling. In other forms also, there are few experience driven companies that could be considered as social commerce where they introduce AR or VR although it has not yet maturated.
To be more precise, once you have a network of people that they can influence on any of the steps of shopping journey, that could be considered social commerce.
The role of Social Commerce in Middle East
A: What is the role of social e-commerce in the Middle East
ChatGPT: “Social media has become an integral part of the e-commerce landscape in the Middle East, with a high penetration rate of social media platforms among internet users in the region. Some of the most popular social media platforms in the Middle East include Instagram, Facebook, and Twitter. These platforms offer a range of features and tools for businesses to reach and engage with their target audience, such as sponsored posts, ads, and shoppable posts.Social media has played a significant role in product discovery and purchase in the Middle East, as consumers often turn to social media for inspiration and recommendations before making a purchase. In fact, a survey conducted by GlobalWebIndex found that 55% of social media users in the Middle East use social media to research products, and 44% have made a purchase through social media.There have been several successful social commerce campaigns in the Middle East, where businesses have effectively leveraged the power of social media to promote and sell their products. For example, the Dubai-based fashion brand, House of Nomad, saw a significant increase in sales and engagement after launching a social media campaign on Instagram, featuring influencer collaborations and shoppable posts. Another example is the Saudi Arabian e-commerce platform, Namshi, which has utilized Instagram and Facebook ads to drive traffic and sales to its website.”
A: Well right but incomplete. while social media has been an integral channel of marketing, engagement and sales for many major brands of the region, the story does not end there. Although we see interesting numbers on the penetration of ecommerce in the countries of the region, the adoption of digitization among small medium size businesses are very different. For instance, the penetration of e-commerce in Turkey is about 50 % but the adoption of e-commerce in small medium size businesses are less than 4%. Or in UAE which in general has high e-commerce penetration rate (70%), more than 80% of SMEs and micro-sellers of this region use non digital or wire transfers for their operations.
In middle-east, the concept of micro-sellers are very much established and accepted. The businesses that are owned by 1 to max 9 people are considered micro-sellers. In general ,SMEs and micro-sellers are core component of the economy in this region. In Turkey, 90 % of businesses are SME and they contribute to more than 75% of employment in this country.
The interesting phenomena in this region is the adoption of social media such as whatsapp, instagram, facebook and tiktok. More than 80% of people of this region are using social media. This number reaches to 90% in some parts of the region.The opportunity that social media provides for SMEs enables them to conduct a semi digital strategy for their business and expand their reach through social media and while continuing their old fashion operation. The amount of transaction generated by these social sellers surpasses ecommerce by 7 times in various part of middle east region.
Another element that contributed to social commerce phenomena in the region is the role of women. For instance in turkey, the number of women business owners who could actually run a digital strategy in ecommerce is much lower than men. While on the other hand social media became an achievable digital strategy for point of sale for many of them and we see more contribution of women in social commerce of the region.
Challenges and opportunities for social commerce in the Middle East
A: What are the challenges and opportunities of social commerce in Middle east
ChatGPT: “While social commerce has brought numerous benefits and opportunities for businesses in the Middle East, it also poses certain challenges that need to be addressed. One of the main challenges is the limited access to payment methods and logistics, especially in countries where online payment systems and delivery infrastructure are not well developed. This can make it difficult for businesses to accept online payments and efficiently deliver products to customers.Another challenge is the need to adapt to the constantly evolving social media landscape, as platforms roll out new features and updates, and consumers’ preferences and behavior change. Businesses need to stay up to date and be agile in order to effectively leverage social media for commerce.
Despite these challenges, there are also numerous opportunities for businesses to tap into the growing social commerce market in the Middle East. With a high penetration rate of social media and a large and young population, the region offers a vast potential customer base for businesses. In addition, the rise of social media influencers and the increasing trend of online shopping in the region create opportunities for businesses to reach and engage with their target audience through innovative and personalized social commerce campaigns. Both local and international businesses can benefit from the growing social commerce market in the Middle East by effectively utilizing the power of social media to connect with customers and drive sales.”
A: Right on but allow me to add to what you listed. The problems of social commerce in general can be categorized as follows:
Payment challenges: still many of social sellers use traditional methods of payment. Bank transfer is very common. Accordingly, few social payment solution has been introduced to the market for this reason.
Order management: as you correctly addressed, social media can soon become overwhelming as the audiences adopt new channels and new behaviour. They lack a system that can centralize their operation and adopt new forms of order placement and checkout for their customers.
Lack of infrastructure: many of these sellers differ operationally with other ecommerce businesses. From business intelligence to carrying inventory and managing logistics, their operation is different than typical ecommerce stores. Unfortunately, the service providers also are not fully equipped to handle these types of requests. All these leads to major challenges for social sellers to scale their business.
Major manual Admin work: Becuase of the chaotic nature of their operation, they tend to spend a lot of time organizing their shop, content or manage their customers and orders. As one of our sellers was saying, social commerce can easily become messy!
This experiment was primarily focusing on social commerce and its challenges on an emerging market such as middle east. The conversation was with me and Open AI ChatGPT about this topic. Despite the depth of the relevancy of her responses and the mind blowing natural language understanding and response comprehending, still there are areas she lacks and we addressed it in this article.
Both ChatGPT and me agree on major opportunities of tapping into the social commerce market in Middle East region. Despite the broad adoption of social commerce by small medium business of the region, they lack fundamental requirements to be able to fully unlock the opportunities of this market. The role of women in this new phenomena in the region is significant and we are seeing more business owners within this space in comparison with traditional ecommerce.
But in general, I think the exercise was interesting for us. The potential solutions such as ChatGPT can bring a major shift on how we approach our lives very soon. Although there are still major rooms for improvement, the “Genie is out of the lamp!!!”. That already has given us few new angles to our AI initiatives and we look forward to that.