Have you heard of the new mining industry? (Sabong News)

A couple of recent technology-related developments gave a new dimension to the word ‘mining.’ One is related to bitcoin where mining is done to create more bitcoins and at the same time confirm transactions on the currency’s network making it more trustworthy. The other is associated with social commerce where the word “mine” is used by the buyer to signify the intention to buy the product being offered. You would usually use the word when you go shopping for goods on social media platforms. For this time, we will be talking about social commerce as a new variant of e-Commerce. In very simple terms, I would define social commerce as a form of online selling using social media platforms such as Facebook, Instagram, and YouTube. It has become popular due to the pervasive use of social media by everyone who has got an internet connection. A recent study by EConsultancy shows that with more than 350 million internet users in Southeast Asia and about  90 percent connecting to the internet using their smartphones, the opportunity to engage with shoppers is enormous. Social media is highly influential in terms of these shoppers’ buying decisions. Distinct from the usual e-commerce platforms like Lazada and Shopee which focus on enhancing the efficiency and integrity of online shopping, social commerce delivers a more interactive shopping experience. It includes relying on other users to assist buying decisions. Social commerce is essentially composed of two main elements. Social media marketing, as most social media brands operate on a two-dimensional model, with advertising as the main revenue stream; and buying/selling of products directly on the social platform. The platform enables the posting of a product or service for sale and for the buyers to message the seller with a view to concluding a sale. It usually does not support a grievance redressal mechanism and payments are directly done between the seller and the buyer. Sometimes, advertisers must refer buyers to an external website or other facilities to conclude a sale. We have read a large volume of articles concerning social media and how it is being used as a marketing outlet. However, very little has been written on the consumer protection aspects of it and how consumers are protected from scams and transactions gone wrong. We have heard of quite a number of horror stories related to social media sites being used for fraud, a fact that could rapidly undermine consumer trust in e-commerce in general. A major reason for this is the fact that sellers and buyers would find it difficult to ascertain the real identity of the other party they are transacting with. Who would they get in touch with if something goes wrong with the transaction? Unlike the traditional e-commerce platforms that provide end-to-end handling of the transaction including payments, refunds, and replacement mechanisms, social media platforms usually do not provide the same services for consumers. A lot of other questions come to mind with social commerce. A lot of times, consumers are made to provide personal data in order to proceed with the transactions. Using powerful artificial intelligence algorithms, these data are usually kept by the social media platforms for targeted marketing and to present relevant product information. Who is now accountable for ensuring that these personal data are kept safe? What about those fake online reviews and endorsements that influence buying decisions? Who is responsible for legal and regulatory compliance? There are legislations currently pending in Congress that are meant to provide protection to all the players in the e-Commerce ecosystem. However, I carry some level of discomfort with how most of them are worded particularly when they do not make distinctions between traditional e-Commerce platforms that provide a seamless experience and end-to-end facilities for buyers and those social media brands that are just used as transaction platforms by anybody wishing to sell. We should also look at making consumer education a standard feature in any consumer protection strategy. Yes, the use of social media quickly spread because it was meant to allow us to easily connect with anyone but using it now for a different purpose would need a holistic program to educate users on the potential dangers of using it for transactions involving money. We can look at a number of avenues that we can explore to minimize issues in social commerce that would result in building an environment that sellers and consumers can trust. I am sure potential solutions do not exist in a vacuum. Not one solution taken in isolation is likely to address all the challenges of social commerce and e-commerce in general. Most of them are intertwined and need, to a large extent, to work together to be efficient.