1. Brands are moving from data collection to data utilization
The biggest difference of online retail with traditional retail is the ability to track, collect, monitor and manage information - all in real time.
Through online channels, brands can access customer data through their own chat (chat) channels, social networks and websites. This information can be used to come up with online strategies. Globally, 73% of brands plan to allocate their e-commerce budgets for data and analytics services by 2019.
However, despite the obvious importance, many brands still have no concept of using data to turn it into an advantage.
“Even today, not all retailers are able to capture such complete data that they think they are data companies. And this may be the reason why many companies are suffering. ”, Said Srikant M. Datar, professor of Harvard Business School.
Collecting data is easy, but to be able to analyze and optimize it for data use is a completely different game.
A survey of Ecommerce IQ identified data analysis as one of the hard-to-find skills in digital talent in Southeast Asia. Brands are constantly looking for data aggregation tools to consolidate information for convenient retrieval and use and to target, retarget and personalize products and services. service.
Reagan Chai, head of regional business development and business analysis at Shopee shared that data collection allows the company to map out and optimize the seller and buyer experience while knowing in advance. Be the needs of customers and predict potential in the future. Shopee has increased website traffic over the past year and claims that it even surpassed regional competitors.
In China, Alibaba and JD have gone one step further using data collected online to improve inventory and experience at their actual stores. Chris Tung, Alibaba's marketing manager, said the company wanted to help brands find the right consumers by tracking them through their systems.
"We recognize all the data related to people, their behavior, what they like, what they buy and bind this online data to real people," Chris Tung explained.
Realizing the need, Ecommerce launched a data analysis platform called BrandIQ last year that aims to help brands focus customer data and deliver customized products or services to each group. target.
All of these things make brands have two options: find ways to use data economically or continue to search for a needle in the bottom of the tank.
2. The social trade channels (Social Commerce) are becoming new selling points of brands
Social trade in the region exploded before e-commerce developed as we know it now. For example: Groups on Facebook have long been known as an online space where people can connect to buy and sell goods - even before the online market (Marketplace) is released. The rapidly growing social network in Southeast Asia is motivated by the use of mobile phones. There are 90% of the online population accessing the internet via smartphones. Some even see Facebook as the Internet.
With countless potential customers on social media platforms, brands naturally identify alternative sales channels. Following Facebook, Instagram and Pinterest have also developed their own shopping features.
“Brands will miss the opportunity if they are not present on social media. The best way to get consumer feedback is to talk directly, ”said Deb Deb Liu, vice president of Facebook Marketplace, sharing with Forbes.
Meanwhile, the messaging application Line recently bought a social trade management startup named Sellsuki in Thailand, has the second largest user base here, to build a solid foundation for business activities. e-commerce business.
A few big brands like L’Oreal have equipped their social networking site with a Buy feature, allowing consumers to buy items directly on the site. And it's just a matter of time before many brands track and use social networks as one of their sales channels, eliminating an unnecessary layer between them and consumers.
3. Online markets are launching new services to make a difference
An important factor that successful e-commerce units in more developed markets share is deploying different services on their own supply chains.
JD's investment in its own supply chain development allows the company to scale up technology and offer retailing as a service (RaaS), helping retailers or other brands. online sales. Alibaba ecosystem has no rival, far beyond normal trade and has a logistics network (Cainiao) and a payment company (Ant Financial). Recently, Alibaba also ventured to invest in the entertainment industry.
The same way has spread to Southeast Asia. Lazada has consolidated its logistics branch FBL (short for Fulfilled by Lazada - Post processing by Alibaba) post-merger. And although no specific plan was revealed, Shopee expressed its intention to build its own logistics network. (In Shopee's statement, Thailand's Shopee has no clear plan to build its own logistics network. This comment was briefly mentioned in an interview with Bangkok Post and is the focus of the media. .)
Singapore's Qoo10 is expected to launch an e-commerce website based on QuuBee blockchain this year. The company seeks to take advantage of blockchain to eliminate transaction and listing fees, which can help boost retailers' profit margins, creating a more sustainable trade approach.
In Indonesia, Tokopedia prepares to provide infrastructure services as a service with a new $ 1.1 billion capital call. They also plan to use artificial intelligence for customer care services and conduct credit checks for salespeople seeking loans to expand their businesses.
But not only online markets in general are taking such moves. Zilingo online fashion market has raised $ 226 million mobilized capital to build a fashion supply chain network that anyone - small sellers or large retailers - can join.
Facebook is also showing signs of being involved in this game. It has launched Marketplace features in Thailand and Singapore without too much attention. But the recent cooperation with Kasikorn Bank in Thailand, enabling in-app billing can be the start of the company's efforts to improve commercial capacity and serve its platform users for business.
We anticipate that online markets will continue to confront directly through new services, mergers and partnerships in an effort to add more brands to sell on their platforms.
Are online markets ready to burn more money, win in this battle?
4. The brand will reinforce the assessment and call for user-generated content to attract consumers
The online markets in Southeast Asia have been upgraded and built with additional facilities that give consumers maximum convenience. Finding technology and better support for consumers is continuous and never ending.
For example, Lazada has introduced AI-based image search, which helps shoppers take a photo of an item and get suggestions for similarly available items.
Consumers begin their online shopping journey by searching for product information or reading reviews on online markets before making a decision. They can also seek real opinions to verify the product.
The habit of leaving product reviews on e-commerce platforms is not as common in Southeast Asia as it is in the United States - Amazon has even created a special page for top rated people. And when consumers in Southeast Asia do this, reviews often contain little information about the product and more information about other aspects (eg delivery time and packaging, ...).
Community-crowd models, which are popular with travel platforms such as Airbnb, may also be suitable for e-commerce businesses in Southeast Asia to reduce consumer fears of shopping. online. It has something that Edouard Steinert, channel managing director at aCommerce Thailand, is finding out that this model can save time, increase results and keep costs low.
“Consumers today want to hear genuine feedback and evaluation about a product and become averse to difficult-to-sell methods. Reviews (created by users), especially from people who share their passion with them, have proven to promote better order conversion for the brand. ”He shared.
5. Brands are using direct selling strategies to collect consumer data
In 2014, an estimated 89% of companies will compete primarily on the customer experience front. The direct approach to consumers (DTC-Direct-To-Consumer) is also becoming more important for brands because it allows them to better understand end users and their needs.
An emerging trend is e-commerce subscription. From a consumer perspective, subscriber registration creates convenience, personalization and is often cheaper when buying what they need. But for brands, it is an ingenious method to create customer loyalty.
A brand that applies this strategy in the region is Nescafe Dolce Gusto, which offers a free coffee machine in exchange for a minimum of 12-month subscription. In addition to witnessing sales growth, it also found that consumers continue to buy from the brand despite canceling the subscription.
Bhuree Ackarapolpanich, brand manager and digital specialist at Nescafe Dolce Gusto, said: “Subscription strategy is not only a long-term consumer support element but also a channel to attract consumers for the whole. brand set. ”
Mandy Arbilo, regional project manager at aCommerce, said electronic sampling is also a popular strategy that brands use to assess needs, especially in e-commerce. Although conventional sampling techniques used by traditional retailers are expensive, electronic sampling saves the brand up to 40% and also provides essential customer data.
When the DTC is widely adopted, consumers will see brands appear compelling gimmicks by using digital tools to better understand and entice consumers to spend more for their brand.
6. Regional e-commerce regulations will eventually go into operation in 2019
E-commerce in Southeast Asia has yet to be controlled. As the industry grows, it is only a matter of time until the government enters into this fast-growing segment and creates a level playing field for foreign companies to provide digital services. and local goods.
News about e-commerce taxes was there at the beginning of last year, but nothing specific actually went into reality.
A few months ago, economic ministers from ASEAN signed an agreement to facilitate cross-border e-commerce transactions in the region. However, when there is nothing specifically written, more and more predictions, concerns about the impact of e-commerce taxes on imported goods in the region.
In Indonesia and Thailand, e-commerce taxes are expected to boost the growth of social network commerce because unlike online markets, they are not controlled.
“If tax regulations restrict e-commerce platforms, making Bukalapak's sales become complicated, there will be a mass migration of people who like to sell goods to Instagram and Facebook. These platforms are unregulated and are not subject to tax collection because they sell through non-traditional channels, ”said Muhamad Fajrin Rasyid, co-founder and chief financial officer at Bukalapak.
Transboundary shopping in Singapore will decrease as prices rise due to the application of Goods and Services Tax (GST) for e-commerce goods and services from abroad. Currently, 89% of all transboundary transactions in Asia Pacific are done by Singaporeans.
Another high-potential e-commerce market, India, has launched a new online market law that prohibits these online market owners from selling their products through suppliers they benefit from. benefits when participating in equity investments in that company. The country has also banned contracts with sellers to create exclusive products for online markets.
Can we see such laws in Southeast Asia? Regardless of such moves, brands will have little impact on how new tax policies are drafted from the beginning. But it allows them to predict the same rules and adjust the appropriate online strategy to minimize the impact of possible changes in customer behavior.
The ASEAN Agreement will encourage many local entrepreneurs to create new products and start their businesses online to reach a larger and more diverse market. Brands will now need to be agile and creative to adapt to local properties and preferences.
7. Grab and Go-Jek are challenging logistics service providers to grab the e-commerce market and deliver food online.
With Go-Jek's recent efforts to expand into Southeast Asia, the competition between startups from Indonesia and Grab rivals will become more intense. Go-Jek had initial success when it was present in Vietnam, Singapore and Thailand last year. And Dacsee, Grab's competitor in Malaysia, also announced plans to expand to Thailand.
But Go-Jek and Grab not only race to become the best car call service provider. Instead, they aimed to become a much bigger one: super-applications. Go-Jek finalized a $ 1 billion capital call from Google, Tencent and JD as part of the company's $ 2 billion mobilization plan for the company. Meanwhile, Grab has recently successfully called for a US $ 200 million investment from Thailand's Central Group and US $ 1.46 billion from Soft Bank Vision Fund, raising its valuation to US $ 14 billion so far. .
2019 will see these two competitors target the same goal of food distribution and e-commerce. Google and Temasek report that the online food distribution business has increased 73% CAGR in 2018. By 2025, they anticipate that online food delivery growth will be at 36% CAGR, compare with online transport only 23%.
Same day delivery service providers will also see more competition in 2019. Grab and Go-Jek's impact on the market will certainly lift the logistics and delivery sectors.
8. Brands and retailers will focus more on multi-channel sales channels (Omnichannel)
Omnichannel shopping experience is not a new concept, but companies have different ways of understanding.
Online retail giants like Amazon and Alibaba are turning to traditional (offline) retail. The main reason that Alibaba ventures out of online space reflects their determination to address the core issues of the shopping experience, such as distributed activity and lack of transparency.
JD has surpassed Alibaba one more time by opening the region's first non-operating convenience store in Jakarta to take advantage of its huge database and provide insightful and insightful information. Brand, such as the best products for storage and advertising. Through joint ventures with Central Group in Thailand, JD Central is also planning to launch similarly in this country by 2020.
Pure e-commerce retailers and brands have realized the limitations in online marketing channels, with fragmented infrastructure and a limited group of shoppers. Traditional retail promotion is therefore an attractive option to boost sales growth.
Elsewhere in Southeast Asia, companies are slow but sure when applying this strategy across all categories. E-commerce fashion companies like Pomelo from Thailand and Singapore with Love Bonito have opened traditional food stores in their countries.
In 2018, Pomelo opened five new stores, moving away from Bangkok's main shopping areas and into the central business districts and residential areas. Meanwhile, Love Bonito has 17 retail stores spread across Singapore, Malaysia, Indonesia and Cambodia.
Rachel Lim, co-founder of Love Bonito, shares with Peak Magazine as follows: "Data can tell you what is selling, but this actual thought tells you why. it is unsold and customers are looking for something. ”
Visiting the mall is a popular activity in Southeast Asia - a trend that cannot be lost overnight. Brands should take advantage of dual presence in the online world and the real world.