Tag Archives: retail

Unlocking the Untapped Potential in Asia’s Digital Economy

Rama-Sridhar (hires)
Rama Sridhar, Executive Vice President, Digital and Emerging Partnerships and New Payment Flows, Asia Pacific, Mastercard

Digitalization of Asia’s commerce brings choice to consumers and opportunity to businesses. It also provides the region’s societies with a path to greater economic growth and prosperity. Better government and business support of the digital economy is needed though, to fully reap these benefits. Greater public and private sector collaborations are also key to unlocking digitalization’s full potential.

While it can appear that the surge of digitalization in Asia – driven by better digital infrastructure, deepening internet and mobile penetration, and rapidly increasing discretionary incomes –  is already successfully driving market growth and development, there is tremendous untapped potential ahead. According to Bain & Company, the digital economy contributes just 7 per cent of GDP in ASEAN and 16 per cent in China (as compared to 35 per cent in the US) and stronger digital foundations could contribute an additional $1 trillion to the GDP of ASEAN alone.

To open new markets, the millions who are still excluded from digital marketplaces – particularly the elderly and the poor – must be addressed. Factors such as lack of access to the internet and training and education have left millions unable to participate in this digital market revolution.

Further, according to a recent Economist Intelligence Unit report commissioned by Mastercard, the digital age divide and the digital income divide have meant that the societal gains from today’s digitalization have already been unequal. In each of the region’s economies, a greater share of those under the age of 35 has used the internet to make an online purchase or bill payment than those over 55. There’s a similarly wide gulf between the rich and poor.

Differences in regulations and the level of digital infrastructure across the region compound the issue and hinder Asia’s ability to fully reap the benefits of the digital economy.

Digital Inclusion

To successfully include all of Asia’s populations in the digital marketplace, it is imperative that people have the ability to acquire the necessary technological and financial skills, and governments ramp up investment and infrastructure.

However, this can’t be left to the region’s governments alone. For one, many governments don’t have the financial resources to allocate adequately to digitalization. Two, several simply don’t have the bandwidth to look beyond other more basic problems.  

This provides an opportunity for the private sector to step up and fill the void. Whether through partnering with regulators and policymakers to shape the regulatory agenda around what is still a relatively nascent industry, investing in people and businesses so they can leverage digitalisation, or helping bring digital infrastructure and services to those left behind, the private sector must play a more active role.

At Mastercard, we are partnering with fintechs as they take digitalization to the remotest parts of Asia’s economy, resulting in both digital and financial inclusion. Through our global accelerator programme Start Path Global, we support start-ups by providing mentoring, giving them access to our global ecosystem and helping them break into new markets with the help of our relationships and customer base.

We’ve also recognized the need for greater public-private collaboration. For example, in September last year, Mastercard’s Track, a global trade platform, was integrated with Singapore’s Networked Trade Platform in an initiative led by Singapore Customs and the Government Technology Agency of Singapore. This digital trade platform facilitates secure and efficient electronic transactions and payment reconciliation between buyers and suppliers, greatly streamlining and simplifying B2B transactions to facilitate more inter-regional trade.

While there is no one template for these partnerships, a number of similar ways can be found for companies to work closely with policymakers in offering digital solutions and enhancing digital skills. Governments, for their part, can also further support Asia’s digitalization by harmonizing regional regulations with the aim of supporting the creation of seamless, interoperable platforms with uniform governance across countries.

Ultimately, only a rising tide of collective regional effort that includes a combination of greater cross-border collaboration and increased financial and digital inclusion will unlock the full potential of Asia’s digitalization. It will also help create a digital economy that benefits all.  

Lazada Launches New Online Retail Solutions in SEA

by Damian Duffy

Lazada is stepping up efforts to strengthen its position as the leading online shopping destination in Southeast Asia.

In conjunction with its 7th birthday celebrations the company announced a series of products and services aimed at helping brands and sellers, both small and large, to win market share in the region by transforming them into ‘Super eBusinesses’.

The offerings are aimed at resolving three pain points that brands and sellers face – branding, marketing and sales.

“No seller is too small to aspire, and no brand is too big to be a ‘Super eBusiness’. That is why we are thrilled to roll out super-solutions to help our brands and sellers become more nimble in digitising their businesses, and better reach customers,” said Pierre Poignant, Lazada Group Chief Executive Officer at the inaugural LazMall Brands Future Forum (BFF).

The new solutions include:

  • A series of ‘Super’ campaigns in which LazMall brands and sellers can choose to take part to boost their brand image and better engage with customers
  • A new and improved Marketing Solutions Package and Business Advisor Dashboard that can deliver more traffic to their storefronts, and arm brands and sellers with near real-time information to help them make faster and better decisions to sell more effectively and efficiently
  • New tech tools like Store Builder for brands and sellers to customise their storefronts to differentiate themselves on Lazada, while in-app live streaming, news feed and in-app consumer games can help win the hearts of consumers with higher consumer engagement

At the same time, Lazada has also formalised online retail partnerships with 12 leading global lifestyle, technology and fashion companies, including electronics leaders Huawei, Realme and Coocaa. These collaborations will enable brands to tap on Lazada’s industry-leading tech and logistics infrastructure, innovation and eCommerce expertise. Other brands that are set to join will include several of the world’s biggest FMCG companies.

Backed by Alibaba’s technology and logistics infrastructure, Lazada has been able to launch over the past year a series of industry-leading tech innovations like search-image function, consumer engagement games and in-app live streaming to become the region’s only ‘shoppertainment’ platform on which people can watch, shop and play.

Accelerating the growth of Lazada brands and sellers

The new solutions will also make it easier for brands and sellers to open up stores on LazMall. Qualified merchants can now take advantage of the new self-sign up feature, a simplified sign-up process that can now be completed in mere minutes. This is in line with the Lazada’s goal of enabling SMEs to become globally competitive.

“Since the launch of LazMall in 2018, we have seen tremendous growth among our key pioneer brand partners. We want to extend the benefits of LazMall to even more brands and sellers to elevate their eCommerce operations,” said Lazada Group President Jing Yin. “We want to incubate them so they can grow alongside us and become sustainable and successful eBusinesses.”

Across the region, 60 per cent of small and medium enterprises (SMEs) are keen to invest in technologies to achieve sustainable growth in today’s digital economy. Business-oriented tools including online commerce solutions, customer relationship management (CRM) and business intelligence, have been identified by Lazada as the top investment priorities.

Driving ‘Shoppertainment’ in Southeast Asia

Pushing boundaries in eCommerce in Southeast Asia, Lazada is driving ‘shoppertainment’ to provide shoppers with a fun, interactive and entertaining experience. As part of its 7th birthday celebrations, Lazada is hosting a first-of-its-kind concert, Super Party, in Jakarta on March 26.

The concert, which features a star-studded lineup including British pop star Dua Lipa, culminates with Lazada’s birthday shopping event on March 27. The one-day sale promises a new online shopping experience that includes a new selection of exciting games for redeeming vouchers and attractive deals for consumers in the region.

Data-driven Singapore Fintech Startup Delivers AI Credit Scoring

Rely, a Singapore fintech company that provides shoppers with an interest-free ‘Buy Now Pay Later’ service for online retail, recently announced a seven-figure Pre-Series A funding round led by Goldbell Financial Services. Additional funding comes from Octava, a family office based in Singapore and strategic investors from the financial and technology sector.

Rely will use the fresh funding for regional expansion, to scale up their team, as well as support more partnerships across the region with leading retailers.

According to a study conducted by Google and Temasek, the Southeast Asian e-commerce industry is expected to exceed US$100 billion over the next couple of years. Singapore, one of the fastest growing players in the e-commerce industry, is predicted to grow to US$5 billion by 2025.

Tapping on this immense growth in the e-commerce industry, Rely offers retailers and shoppers a way to manage their spending and access credit, without using traditional credit cards.

Rely uses its proprietary decision engine, which harnesses the power of artificial intelligence and machine learning, to help determine shoppers’ repayment capabilities for each transaction. With the use of this technology, spending limits are determined for each consumer. Safeguards are also put in place to ensure that shoppers repay on time, and further purchases cannot be made if payments are not made on time.

With Rely, shoppers can use the ‘Buy Now Pay Later’ service upon checkout and enjoy their products without having to pay the full sum upfront. By linking a debit card to their Rely account, shoppers can split their purchases into three equal, interest-free monthly payments. The initial payment is collected at checkout, and the remaining sum is collected over the next two months.

Based on initial data, this service appeals especially to Millennials, who have distinctive spending habits from past generations. They know what they want, and they seek instant gratification when it comes to their purchases. At the same time, they are cautious when it comes to their spending, and are wary of falling into credit card debt. Rely caters to this audience and the relationship between what they want and what they think they ought to do, allowing them to stay in control of the way they chose to handle their finances.

Exciting times for the fintech and e-commerce sector in Singapore.

E-commerce in SEA: Holiday Sales Online Consumer Trends

The friendly folks at Meltwater have just released a new report titled ‘E-commerce in SEA: Supercharging Holiday Sales Through Social Media’ analysing consumer sentiment across South East Asia during the year-end shopping period last year to help e-commerce companies better reach their audiences.

The report found that Christmas shopping pulled in 56% of chatter, while Black Friday represented 22% of buzz. Fast-growing Singles’ Day – a shopping holiday started by internet company Alibaba in 2009 – is credited with kicking off the nearly two-month shopping period, and accounted for 20% of social media conversations.

Within the region, Indonesia drove the highest volume of conversations (57%), which isn’t surprising considering the country’s increased internet penetration and smartphone usage in recent years. Philippines and Malaysia represented 30% and 12% respectively, while Singapore brought in 1% of the buzz.

While the top brands varied from country to country, it’s clear that the marketplace model emerged the real winner. In Singapore, Amazon dominated social media with 51% of online conversations; Shopee led the buzz in Indonesia; Qoo10 was the most talked about in the Philippines; and Lazada emerged triumphant in Malaysia.

There’s more at the full report below.

E-commerce in SEA: Supercharging Holiday Sales Through Social Media [PDF]

5 Steps to Capture the Valentine’s Day Dollar

With Valentine’s Day hot on the heels of Chinese New Year – itself coming about a month after Christmas – there have been and will be great opportunities for retailers to capture the gift-giving market. Yet, it’s been well publicized that the retail industry is flagging, with data showing that the average vacancy rate of suburban malls, has doubled from less than 1 per cent in 2013 to 2.4 per cent in the fourth quarter of 2016.

The problem is that we’re no longer in an era of business as usual. Retailers cannot employ the same tactics which have worked for years and expect customers to come flocking back. In today’s age, customer experience is the new currency. The strategy of leveraging products to gain a competitive advantage is obsolete when you are fighting with “everything stores” like Amazon and Alibaba which offer almost infinite choice and cheaper prices. When everything is available all the time, at any price, experience is the remaining true differentiator

How can retailers generate powerful experiences to capture today’s new customers (and their Valentine’s day gifting dollar)? It’s a journey to get from being a product-based business to an experience-based business. In its recent “Path of Experience” report, Adobe sheds insights on the 5 milestones to experience-driven commerce:

  1. Segmentation: The first milestone on the journey is to truly know one’s audience. They exist, but the challenge is in finding them, and defining them. Not by demographics, but through shared attributes and behaviours. In practical terms, this allows a retailer to reach many individuals with a collective message and expect a certain desirable result. Each audience has to be large enough to make a difference in revenues, but small enough to be distinct. The answer to this is big data – be it through first party, second or even third party data. This is where a data management platform comes in, pooling all this information so retailers can experiment with traits that help them find these natural groupings
  1. Personalization: With the data, you can now create a special and specific experience for each audience segment. Wooing a customer with a one-sized-fits-all approach is no longer effective today, akin to giving a girl roses when she in fact prefers lilies. Whilst personalization is nothing new, today’s difference is that it can be delivered at scale using automation. By using the digital fingerprints that customers leave behind after every interaction, retailers can build a progressive personal profile that allows them to understand how customers feel, what they do, and ultimately, what customers want.
  1. Omnichannel: Now that retailers have gotten the ability to achieve customer intimacy, the third experience milestone is putting those relevant, personalized experiences where they count. Different customers use channels in different ways—without differentiating between touchpoints and channels, inbound and outbound. The consumer is everywhere. Retailers need to be there as well. And the best way to do this is via the mobile – the most personal device ever. Because of this, mobile often serves as a second-screen or cross-channel resource especially in brick-and-mortar selling. This opens the door for intelligent contextual marketing, where mobile is viewed as a behavior rather than a separate channel or technology. Because the behavior is constant, brick-and-mortar retailers can use mobile to augment the store experience, using various technologies.
  1. Dynamic Content: Experience-driven commerce requires that retailer reimagine what shopping looks like. It’s more about telling a story rather than telling the customer why they should buy the product, instilling a perception of increased value that differentiates from the competition. Dynamic content and shoppable media can bridge that gap, using the latest tools to tell compelling stories that take buyers straight to the checkout line. A great example of this implementation is Amazon Go – reducing barriers to commerce to make shopping a breeze
  1. Real-Time Analytics: As no two customers will share the same purchase journey, it’s important to always know where customers are at. Real-time data allows retailers to watch over the customer’s shoulder, understand the journey and smooth out any rough spots. It makes it easier for retailers to lead the customer from awareness to conversion. Analytics also provides optimization opportunities – and the chance to fine-tune the customer journey through a simple three step process: Measure (customer interactions), Adjust and Improve (the customer journey).

While the journey might sound a bit daunting at the outset, the key is to start small, move forward, and not stagnate. By carefully evaluating their ability to act on the five capabilities described above, retailers should get a better idea of where they need to go. And as they do, the customer experience will surely improve.

For more information, please download the full report here.