The Use of Social Media in E-Commerce

ArabNet Team, Nov 09 2016

In the MENA region, e-commerce continues to dominate the digital landscape, with 2/3 of tech investment dollars going into transactional businesses, and marketplaces for services growing exponentially. Beyond pure e-commerce platforms, e-commerce is gaining importance as a channel for all types of traditional businesses, and corporations across industries are investing in and experimenting with new ways of providing on-demand fulfillment of their customer needs.

The E-Commerce Insights and Best Practices report, conducted by ArabNet in partnership with OMD, was launched in October to provide brands and decision makers with the insights and best practices for developing their e-commerce strategies and plans. Based on a survey of 13 executives from some of the top e-commerce companies in the MENA region, the research investigates the main social media channels, mobile strategies, and logistics and payments’ practices adopted by these major players.

The report is composed of three main sections: Social Media – Marketing and Advertising, Mobile, and Purchasing and Logistics. In this article, we will focus on the Social Media section which investigates the key social media channels used by e-commerce players for both organic and paid reach, and how they distribute their marketing activities and digital advertising investments across these platforms.

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The survey results clearly indicate that Facebook, Twitter and Instagram are the key social media channels used organically by almost all e-commerce players. A number of respondents highlighted that Twitter is the key channel for Saudi Arabia, where the Arabic language dominates the platform and one of the respondents claimed that Arabic dominates over 70% of its user interactions in the Kingdom. It is interesting to note that almost half of the e-commerce companies surveyed are using Snapchat, many of which have only recently started experimenting with the platform.

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While most of the e-commerce companies surveyed are using social media platforms for organic posting, the distribution of activities is skewed heavily towards Facebook and Instagram, followed by Twitter. YouTube and Snapchat are also being used much more selectively for a smaller scope of activities, elaborated in the following diagram.

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While survey respondents tend to have an organic presence on most social media platforms, their paid media investment appears much more focused on specific platforms, with Facebook being the most commonly used channel for 92% of survey respondents. Instagram and Twitter are the secondary channels used for paid media, with roughly 50% of survey respondents stating they advertise on both channels. The largest gap between paid and organic channel use is Snapchat, where paid advertising has only recently been introduced.

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The dominance of Facebook as a paid channel is even more evident as we dive further into the distribution of advertising investments by channel. Here, survey respondents indicate that Facebook is capturing about 2/3 of digital ad spend, with significantly smaller (and roughly equal amounts) being spent on Instagram, Twitter and YouTube. The ‘Other’ category (15%) is dominated by search, and appears small given the importance of search, especially for conversion in e-commerce marketing.

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After establishing the main social media channels for organic and paid reach, the survey investigates the key objectives for each platform. Facebook, Twitter, and Instagram tend to be the most versatile channels, used for the most diverse set of objectives; however, the focus for Twitter is customer service and the priority on Instagram is brand building. Facebook, Twitter and Instagram are also the key channels used for customer acquisition, with Facebook being the key driver of conversions –followed closely by Twitter.

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The key channel for customer engagement is Facebook followed by Instagram, where Instagram is often used to sell a lifestyle through trendy images and content. YouTube is used sporadically, and in a different manner by survey respondents – mainly for educational content, as well as videos for branding and engagement. Most e-commerce players surveyed have a corporate blog, where they do content marketing for brand building and consumer education. With respect to the latter, the focus is on explaining how e-commerce works and enhancing customer knowledge on products and services. For brand building, a large part tends to feature storytelling about the company and its services, adding a human component to the brand, which helps build an emotional connection.

To read the whole report, click here

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