Line Platform Primer: Understanding the Potential of Chat Commerce in Thailand and Beyond

Headshot of VMLY&R Thailand's Amandeep Singh

VMLY&R’s Amandeep Singh examines the conversational commerce phenomenon around Line Shopping in Thailand and what marketers and advertisers can learn from it.

The impact of conversational commerce has grown immensely in SEA as omnichannel ecosystems progress in the region.

The c-commerce ecosystem has broad layers with third party plug-ins and integrators enabling sellers and buyers to transact.

Line is the most popular messaging app in Thailand and the natural choice for c-commerce as most consumers use it daily.

Instant messaging is an integral part of Thai consumer behaviour. It’s one of the first things that struck me as unique when moving to Thailand just after the COVID restrictions were lifted. Line continues to be the No 1 messaging app in the country and is also a superapp, offering a broad range of other features. Line Shopping (the conversational commerce business of the superapp) was the first business I worked on in Thailand. Being a WhatsApp and Amazon user, I found the idea and potential of chatvertising riveting. But it’s important to understand a few things about conversational commerce.

According to the Social Commerce in SEA 2022 report by Cube Asia, the impact of conversational commerce has grown immensely in SEA as omnichannel ecosystems progress in the region.

Conversational commerce directly impacts US$12 billion of e-commerce GMV

Its indirect impact on online is US$50 billion and US$200 billion impact on online and offline

It’s precisely the direct attributable sales impact of c-commerce, along with its indirect influence on both online sales and offline sales, which make it an increasingly popular choice for marketers looking to make a real impact in the market.

This paper gives a brief overview of c-commerce in Thailand, what makes Line different and how marketers and advertisers can leverage its potential.

How c-commerce works

The c-commerce ecosystem has broad layers with a host of third party plug-ins and integrators enabling sellers and buyers to make transactions.

Breaking these down:

  • Sellers: These are broadly defined as brands selling direct to customers (DTC), retailers and resellers. In Thailand, most resellers are SMEs.
  • Buyers: Direct purchase is possible via the messaging platform. For example, a customer can chat with a Line official account (OA) of a brand and complete the purchase via Line Shopping. Alternatively, a customer can also use Line to chat with a business and then receive a link to make a purchase on Shopee, Lazada or a DTC. The key is that the conversation happens with the customer on the chat platform.
  • Platforms: There are messaging platforms with direct commerce integration such as Line and Facebook Messenger. Others are e-commerce marketplaces such as Shopee and Lazada, and DTC or third party retailers. The e-commerce platforms can use web chats with plug-ins or third party enablers.

Line shopping and c-commerce in Thailand

If you are a marketer or commercial team member of a brand in Thailand, first, you must get your digital ecosystem set up to enable a seamless consumer journey. As the most widely used messaging app in Thailand, Line is a natural choice for c-commerce for brands as the majority of consumers are use it every day. These are the topline stats for Line in Thailand.

Line has 12 million active users per month out of 53 million Line accounts.

41% of Line Shopping users are aged 20-29 and the basket size is around 1,000-1,200 baht (US$28-34) on average per user.

Merchants with at least 100 followers have the potential to receive sales orders every month, while those with at least 40,000 followers are the top sellers.

Merchants from five million Line OAs have the potential to leverage Line Shopping to increase their sales and boost the fan base. Line Shopping earns from advertising fees.

Line Shopping provides tools that can support merchants' order management and discount marketing through Line Points.

Line is primarily used for messaging. However, often overlooked are its in-built commerce platform, payment wallet, ad inventory which spans the entire Line ecosystem, stickers and a myriad of other consumer touchpoints, making it, in essence, a superapp. In order to grow, Line Shopping has focused on building its seller base since it already has customers on its messaging app.

Case study

As a latecomer to the e-commerce marketplace, behind Shopee and Lazada, Line Shopping needed a way to attract sellers to the platform and enhance its position as a destination for SMEs.

KOLs have huge influence in the Thai market and small players are unable to afford these celebrities, which makes it tough for them to compete in a space that tends to be dominated by large businesses. To remedy this, Line cleverly brought together top Thai KOLs and offered them up as free endorsers exclusively for the sellers on their platform.

The assets created are housed on an open endorsement platform from which Line Shopping sellers can choose the most suitable endorsers for their brands, then generate royalty-free marketing collaterals in an effort to level the playing field. The clever and calculated move resulted in thousands of sellers joining Line shopping.

In addition to marketing tools, Line Shopping also provides features to help sellers make the best use of the platform and reach out to the potential shoppers. These include:

  • Shopper management tool: Apart from the standard store front features, this provides sellers with a CRM platform for audience segmentation as well as marketing tools for boosting sales, product and inventory system, and reports.
  • Social commerce discovery platform: Being a superapp, sellers are able to cross-market their products through Line’s various services, such as Line Wallet, Line Shopping Home and others. Sellers can offer deals when consumers shop through Line’s shopping-adjacent services (such as Wallet), placing them top of mind even when a purchase is not necessarily the reason to begin with.

From customer service to customer experience

It’s important to remember that no matter where the customer buys from, Line is their preferred choice for interacting with a brand, which means the Line OA has to be ready to handle all kinds of questions. These can be queries about a product, retail locations, orders, shipping or price-related issues. So it is integral to make sure that customer service, e-commerce and brand teams are working together rather than in silos.

From a consumer point of view, it is key to align with your brand and customer experience. Today, we live in a world where the very essence of a brand is the “experience”. A shopper chatting with your official brand account is therefore an experience which must be consistent and deliver on both quality and brand narrative. This means defining the persona, values and tone of the messenger. Is your brand a friendly adviser, an expert consultant or just a shopping assistant? These things matter but can be challenging for brand managers who are often siloed from trade or e-commerce teams. However, it can provide an opportunity to run customer immersion sessions and stakeholder interviews to better define the personality of the brand in a retail/shopping environment.

Skincare brand Eucerin is a great example of a brand which does this well. Being positioned as a dermatological expert brand, Eucerin offers its customers free consultations with real experts via live chat. The consulting approach is also quite clear when it comes to its various chat commerce touchpoints like Line and Facebook Messenger. The chat experience is very clearly defined. While other brands might push sales or offer discounts to engage the customer, Eucerin provides an experience to the consumer, first helping to find their perfect skin solution and then providing them with the option to buy it online.

Another thing to watch out for is the impact of generative AI on c-commerce. Should the brand use AI, human or hybrid? While generative AI continues to progress, pre-programmed chatbots have existed for years. Today, most models which run in the market are either all-AI or hybrid models where real people take over when required. Your brand positioning will determine what combination/approach is best for your brand. On this, there is no one-size-fits-all.

Where brands can start

Line is a great example of an app which is covering all the bases when it comes to c-commerce and it is possible to apply many of these tactics in your own market via different messaging apps. For instance, rather than worrying about whether to use WhatsApp or Facebook Messenger or a third party, what is more important is your strategy and having the capabilities necessary to execute it.

The role of c-commerce: A good place to start is by understanding consumer behaviour; seizing the opportunity and building a business case for it. You might start off by adopting an MVP approach where your chatbot interacts with shoppers who are considering your product, or you might go to the next level and develop it into a route to market itself.

The tech stack: Make sure you have the right tech stack to run a seamless backend operation and a frictionless customer experience. There’s nothing worse than a laggy or glitchy experience, which can undermine the overall brand experience. You also need the right tracking, CRM, an inventory management system and quality personalisation to be built into your entire c-commerce journey to not only convert your transactions at the POS but also build loyalty through a seamless customer experience.

Analytics: Customer chats are an invaluable source of insights about the customer. It is important that all of your chat interactions are analysed with the right technology and analysts, who can provide insights on everything from consumer shopping behaviour, top queries, feedback, complaints and much more. These insights should then be used to refine and strengthen your c-commerce approach based on what’s working and what’s not.

Eye on the market: A few years ago, we started talking about social commerce. Shortly after, the conversation changed to conversational commerce and we are now seeing the evolution of conversational commerce into specialised subsections, as both direct commerce and as an omnichannel revenue driver. Adding to the complexity is the number of rising platforms with Meta, Line, Zalo and others all fighting for a piece of the pie. It would be wise to focus on a leading platform or two but testing waters with new ones should never be ruled out.

Thailand provides us with great insights on how c-commerce has been evolving to what it is today. But we cannot overlook the human element at play here. People love interactions and shopping is a social experience. Whether a shopper is buying in a shop or online, that experience is priceless and is ultimately the driving force behind c-commerce today.

As a brand, your challenge might well be to create an experience which feels human but is as efficient as a machine. To do this, if we’ve learned anything from Line Shopping, it’s that bringing together the right blend of brand experience, personalisation and seamless functionality, is key for success in this space.

- Amandeep Singh is Head of Commercial Growth & Consumer Experience at VMLY&R Commerce 

Originally published in WARC