[JAKARTA, Indonesia] E-commerce is an industry that is growing very rapidly in recent years. There are many factors that support this phenomenon. One of them is that many things in Indonesia are still ineffective and it is ironically 'blessing in disguise', a hidden opportunity that has been captured by e-commerce players in Indonesia.
According to PRNewswire's press release, Go-Jek and Grab will not be the services people need if the public transportation system is established and reliable, and that's where they help solve transportation problems.
Tokopedia and Bukalapak, for example, that create disruptions by bringing together sellers and buyers directly through their platforms, which makes business much more effective and efficient.
Also, Traveloka, which revolutionized the travel and tourism industry by offering effectiveness and efficiency in ticket bookings.
The above examples are illustrations of how e-commerce has facilitated and penetrated so deeply in our lives. And they are only five of thousands of startup and e-commerce companies in Indonesia.
In general, the e-commerce market base is internet users. Their presence increases as the penetration and reach of the Internet grows. Citing a study from Statista, the number of internet users in Indonesia reached a figure of about 105 million.
This number is more than 40% of the population in 2017. The figure is growing consistently and rapidly compared to 2011, where the penetration rate is only 18%. So, it is not surprising if most of these internet users are also social media users. Yet, not even just an ordinary 'users', but 'fans'.
E-commerce and Social Media
As is known, one of the important points that determine the position of e-commerce in the internet is the traffic it has. The higher the traffic, then the popularity of the e-commerce in cyberspace increased.
If compared to conventional business, then 'traffic' is people who stop at the store. Of course, more and more visitors are generally interpreted as something positive.
Considering the importance of traffic for e-commerce and the use of social media, the digital tactics of increasing traffic via social media have become popular in recent years. Simply put, the mechanism is to reference websites or apps on social media platforms.
This tactic proved successful in increasing traffic. Studies by Shareaholic in 2015 as quoted from Forbes, said that social media is the number one referral (referral) to the entire website, including e-commerce.
About 31% of referral traffic comes from social media. This figure is certainly a dynamic move, but the significant role of social media as a reference will remain an essential point for e-commerce.
Social Media Referral in Indonesia
From the above premises, it is interesting to know the relationship of traffic on e-commerce and social media referrals in Indonesian.
According to SimilarWeb statistics collected from July 2016 to August 2017, there were 9.158 billion visits to 10,000 online shopping sites in Indonesia.
There are six social media raised in this study: Facebook, YouTube, WhatsApp, Instagram, Twitter, and Pinterest. The six are on average contributing 3.40% in the same period as referrals to online shopping sites. This means roughly 311 million visits in the period July 2016 - August 2017 are sourced from social media referrals.
Facebook is still the most influential social media in terms of referrals. This is certainly related to their position as the number one social media in Indonesia. But the trend of Facebook as a traffic referral has tended to decline in recent months, after having been at 2.56% in January 2017, down to 1.51% in December 2017.
Right in the second position, there is YouTube figure that went up and down, and perched at 1.40% in December 2017.
The most interesting is WhatsApp platform, which has experienced consistent and significant improvements. It only takes one year for WhatsApp (from 0% in December 2016) to be in the third position of a significant social media referrer.
WhatsApp percentage increased from January 2017, which was 0.08%, to 0.24% in December 2017. This is three times the previous number.
Conclusions and Practical Implications
So, what can be drawn from these numbers? First, Facebook with YouTube will still be the main platform in terms of social media referrals that drive traffic to shopping sites. Both contributions are still too significant to be rivaled by other media.
Secondly, WhatsApp which is a text messaging platform, also acts as a social media that has gained popularity as a referral in recent months, and its role will continue to increase. These three platforms are predicted to be the dominating platforms in 2018 in terms of social media referrals.
The reference contribution of 6 selected social media as a source of traffic to 10,000 shopping sites in Indonesia (3.35%) over the past 18 months is still very far from the word effective when compared to global social media referrals (31%) in 2015.
However, this should be seen as a golden opportunity. That there is still so much space to increase traffic with social media referrals tactics.