Fashion is the biggest ecommerce category, while payment methods and delivery issues are the biggest concerns for online retailers and marketers in Southeast Asia and Taiwan, according to a new report from Econsultancy and Shopee exploring challenges and opportunities in ecommerce across the region.
The results revealed that 51% of online retailers and 41% of marketers saw their online sales rise, but for 28% of online retailers and 29% of marketers, online sales remained the same relative to the past year.
Fashion and accessories was the most popular category on online marketplaces, with 23% of online retailers and 16% of marketers active in it. Health and beauty was the second most popular category, with 17% of online retailers and 15% of marketers offering choices in it.
The survey also revealed that marketers in Vietnam (11%) were the most active in the computers, camera and mobile phones category, edging out Singapore (10%) and Taiwan (10%).
While around a third of online retailers (32%) and marketers (33%) indicated that they did not sell internationally and had no plans to, the ecommerce market in the region is poised to grow with 54% of online retailers and 39% of marketers planning to offer their wares and services to other countries.
Over the last five years Vietnam has seen its beer sales climb at more the double the rate of its GDP, making it South-East Asia’s largest consumer of beer.
In fact, in 2012 a staggering 3 billion litres of beer were consumed in Vietnam meaning there should be huge opportunities for local and international bands to market and sell here.
However, it’s not as straightforward as it should be.
Firstly the infrastructure of Vietnam’s cities, towns and villages which can be described as politely referred to as ‘disorganised’ makes it very difficult for brands to establish where or why there beer is selling well.
This is made even more complicated as many vendors will buy stock from one shop then move around so even consumers will not know where they bought the product from.
This can prove a huge hindrance for brands who want to monitor sales, establish demand for a new product or establish consumer sentiment.
Another challenge is the competition from liquor and wine brands who are looking to get a slice of Vietnam’s youthful and rapidly increasing middle class.
A recent report showed Ho Chi Minh City in the south of Vietnam has one of the fastest growing multi-millionaire populations in the world, and the thirst to match it.
Beverage companies with high-end products such as Diageo (whose brands include Schmirnoff vodka, Tanqueray gin and part own Moet-Hennessy) have been working hard over the last few years to establish a foothold in Vietnam.
While it looks unlikely spirits will ever usurp beer, their appeal is growing (though they are not really present at the street-side eating venues many Vietnamese like to eat and drink at).
Another problem beer brands in Vietnam face is their struggles to connect with an increasingly digitalised audience.
A spokesperson from market research and insights company, Epinion said: “In order for brands to run effective social media campaigns they need to have a good understanding of who their audience actually is. Without this information you run the risk of analysing the effectiveness of digital campaigns based on falsified and biased data which is a huge waste of time and money.
“In a project we worked with Vietnam’s leading brewery Sabeco we helped them establish who of their more than 100,000 Facebook fans were ‘true’ and who just liked the page for the sake of it, then established the effectiveness of their digital campaigns.
“As a result of our study, Sabeco gained valuable insight on how they could gain greater engagement with their ‘true fans’ and leverage further impact from future digital campaigns, reducing time and money spent on ineffective digital marketing campaigns.
“Sabeco, along with other beer brands, has to embrace digital media as this is where their consumer is, but they must also know how to connect with them online.”
Marketing Matters is a monthly column covering how marketers today can use Digital to drive innovation and results
Social commerce, or S-commerce, is one of the newer kids on the E-commerce block. Of course, it is also a very broad subject. Some would also include Taobao and travel websites like Tripadvisor and Airbnb in the S-commerce sphere. For today’s discussion, we will only focus on S-commerce activities triggered by social media. Blending e-commerce tech with social media and other contributor-driven platforms, this part of the industry has been growing steadily and quickly, with the world’s top 500 retailers netting over three billion USD from S-commerce in 2014, up 26% from 2013.
With the continued global rise of social media, S-commerce – in terms of both direct sales and referrals to merchants’ and retailers’ websites – is here to stay. Take e-commerce social media referrals – these alone increased almost 200% between Q1 in 2014 and Q1 in 2015. This is generally great news for retailers, but the industry still has much growing and maturing to do, particularly when it comes to diversifying platforms and embracing mobile.
Right now, S-commerce has a lot of eggs in one basket: Facebook is by far the most dominant platform, with 50% of total referrals and over 60% of total revenue. Twitter and Instagram do not have anywhere near the clout of Facebook, though they are emerging as niche players – Twitter is proving popular with sports and event marketers, especially with location-based promotions; while Instagram is proving attractive to high-end companies seeking to strengthen their brand. Newer players like Snapchat are entering the S-commerce market, but their ability to sustain sales remains to be proven.
In view of this trend, many social media platforms are investing in enhancing their features to capture the attention of end consumers and create business opportunities for retailers.
In case you missed it, Google announced it will be adding a ‘buy’ button to product search results made on mobile devices. This button will let consumers make instant purchases from the brand, but on Google’s mobile search results pages. With these buttons coming soon to YouTube and Facebook, these instant purchases will ‘reduce friction’ by delivering a more seamless and faster experience, helping consumers overcome their mobile reluctance.
Pinterest, the social photo sharing service that has become a worldwide phenomenon, is now a major force in S-commerce despite its small user base. Currently responsible for 16% of global S-commerce revenue, the site is proactively innovating and driving the industry forward. Its new ‘buyable pins’ feature, which is still running its pilot test in the U.S., is allowing users to buy products pinned on e-commerce sites without leaving Pinterest. Now, any time a user pins products from a brand’s website, these products can be purchased by anyone else directly through Pinterest. This is of great benefit to all sides, as this ‘social proof’ style marketing involves very little advertising budget and fosters high consumer trust.
If we look at the market in Taiwan, we find that a lot of platforms doing retail business have acted fast to ‘dress themselves up’ like Pinterest. Sooner rather than later, they will also be following suit in adding features equivalent to ‘buyable pins’.
All this is good news for businesses that are looking to expand their mobile wallet share. Google credits ‘shopping micro-moments’ – time spent searching for or reading about products on their mobiles – with driving almost one trillion USD in sales in the US in 2014, and this figure is set to explode globally.
In the future, S-commerce will play an ever-larger role in these moments. It’s already happening: ‘conversational searches’ are growing, whereby consumers talk to Google and ask for help with new products. Google literally answers them back with smart shopping ads that have product rankings and reviews included; deep links on retailers’ apps right in their shopping ads, driving traffic direct to retailers’ mobile apps instead of their websites; and private sales and ‘daily deal’ sites like Moda Operandi and Groupon allow customers to preorder directly from designers and create buzz around daily sales events.
At the end of the day, S-commerce is about people socialising and helping each other buy things in the most convenient way possible. It allows people to leverage the advantages of digital platforms and transform them into a personalised shopping experience. Retailers that keep these customer motivations in mind will be well-placed to link multiple channels and technologies together to create an omni-channel O2O experience that will satisfy and delight their customers.
Epicentro specialises in digital content development and is a member of the Pico Group
Awarded ‘Events Standard of Excellence’ and ‘Marketing Standard of Excellence’ in 2015 WebAward for Outstanding Achievement in Web Development by the Web Marketing Association
Daniel has been with Pico for over 15 years and is a seasoned event marketing industry professional. Foreseeing the ample opportunities presented by the world’s rapidly-changing technological landscape, Daniel began planning for a new business unit specialising in digital content solutions in 2010. Commencing full operations in 2014, Epicentro has spearheaded the development of unconventional technologies, helping our clients reach and stay on top of the market. Under Daniel’s leadership, Epicentro has established a strong client list spanning the commercial and government sectors: AIA, Airport Authority Hong Kong, Amway, Dragages, the government’s Environmental Protection Department and Home Affairs Department, the Hong Kong Trade Development Council, Jardine, Suntory and Watsons.
Industry analysts regularly highlight the shift currently taking place in the way media is being traded, as the market moves from relationship driven buying to programmatically delivered electronic trading.