Asian retailers lagging in leveraging Facebook

Facebook execs claim its recently launched Offers has an advantage over Groupon, and advise retailers to invest in mobile apps to reach consumers in the region.
Written by Liau Yun Qing, Contributor

SINGAPORE--Building their fan base, promoting offers and creating mobile apps are some of the areas in Facebook in which retailers in Asia should work more on, according to Facebook executives.

Compared to retailers in Asia, retail brands in the United States, such as Walmart and Amazon, have been investing more in building their reach and producing content on Facebook, said Maz Sharafi, global head of retail for vertical marketing at Facebook.

"So there is a clear opportunity for businesses to continue to build that audience and leverage Promoted Posts, for example, to reach more audience," Sharafi said in a media briefing here Thursday. Promoted Posts are paid posts which appear in a more prominent potion of a user's newsfeed.

Nicolas Franchet, head of e-commerce for global vertical marketing at Facebook, shared how having a fan base on Facebook can benefit retailers.

He noted Indian fashion and lifestyle e-commerce platform Myntra.com, which has more than 800,000 fans on Facebook, reported having 25 percent of its sales come through the social network.

Citing a Comscore study, Franchet added online fashion retailer ASOS saw buyers who were fans of the brand on Facebook were 3.6 times more likely to visit its site compared to those who have not "Liked" its page.

Boosting business with Offers
Besides growing Facebook fans, Sharafi said retailers in the region can "accelerate" the use of Facebook Offers which is a coupon service, Promoted Posts, ads and other offerings targeted at retailers on the social network.

He cited how Japanese convenience store chain Lawson saw a "healthy ROI" (return on investments) from Offers when it posted a coupon to its fans. Among those who claimed the coupon at Lawson stores, 70 percent purchased another item, he said.

Launched two months ago, Offers allows companies with at least 400 fans to create coupons that can be shared with specific followers. Companies need to spend a minimum of US$5 per offer which is estimated to reach 95 to 176 people, but they can pay more to increase the reach of the offer,

Sharafi said Offers was a way for retailers to drive customers to their stores or their Web site. This provides a branding opportunity for the retailer as users who claim a coupon from Offers would automatically broadcast the news to those in their Friends list, he said.

However, Sharafi pointed out that Offers was "very different" from group buying sites, such as Groupon.

He explained that a group-buying site sells physical coupons for products or services with "huge discounts" and the site would take "take a huge share" out of the deal.

"That's not what's happening [with Offers]," Sharafi said. Instead, Offers is based on ad spending and the social network does not take a cut of the deal, he said.

Franchet noted there would also be no need for a user to sift through emails, and the products would be targeted at an individual rather than a group.

Work on promoting mobile apps
More than 50 percent of Facebook users in Asia access the social network through its mobile platform, he added. This trend shows that retailers cannot ignore the importance of mobile when reaching out to consumers in the region, Franchet pointed out.

Sharafi said mobile apps for games and retailers were popular in Asia but not many retailers in the region have taken the opportunity to use Facebook's mobile app install ads to increase app discovery.

The social networking giant has been realigning its mobile strategy around its App Center as part of efforts to monetize the mobile space.

[Correction: An earlier version of the story misstated that retailers have not taken the opportunity to build mobile apps. Instead, Sharafi was talking about retailers in Asia not adopting Facebook's mobile app install ads which was launched last month.]

Editorial standards