One of the most interesting parts of my job is going on regular courier rides with some of my employees. A few months ago in Thailand, I sat in one of our DHL courier vans as it made its rounds at speed. As the week progressed, my time in the van with my front line employees and customers reinforced my thoughts on the growing complexity and huge upside of ecommerce in the region.
Southeast Asia is a hotbed for online trade. By 2020, more than 480 million people in the region will be online. At the moment, 3.8 million new users get connected to the internet every month. Ecommerce in the region is expected to be worth US$88 billion by 2025.
There are high volumes of deliveries across the countries: Thailand, Malaysia and Vietnam have more than 150,000 B2C parcel deliveries a day and still only represent between 3-5% of all retail sales in their respective countries.
It is a huge and growing ‘pie’ for new and existing e-tailers. Whilst it is a great time to be an e-tailer, the opportunity also comes with some challenges. Customer requirements are becoming more complex as are the channels that merchants have to keep up with them.
One of the biggest signs of this trend is the way Southeast Asian customers interact with brands.
Among digital shoppers, 80% use social media to research products and interact with sellers. Shopping via mobile devices has also become the norm, especially for those who live outside metropolitan areas, 85% outside the major cities use their mobile phones for online purchases.
As ecommerce becomes more prevalent, customer expectations will continue to rise. They will have less tolerance for delays and be frustrated at lack of choice.
When I spoke recently to one of our partners, Hans-Peter Ressel, CEO of Lazada Malaysia, he remarked to me: “When customers buy from us today, they are looking for a seamless shopping experience. As e-tailers, we can’t afford to skimp on our logistics capabilities.”
It’s important to continuously offer fast, convenient, and reliable delivery options, because this is what customers are expecting today.
So, let’s take a step outside and consider what exactly is it that Southeast Asian customers wants after they hit the ‘check-out’ button. What makes them tick? What do they like? What frustrates them?
From my journey walking the ground in our facilities, to sitting in our delivery vans, I’ve noticed three things that customers in the region want from their e-tailers today:
1. Variety to match their diverse needs
The ‘on-demand’ economy has given customers many options and their expectations have changed considerably as a result. Not only do customers want faster delivery options, but a pre-determined and agreed delivery window. Customers also expect payment options catered to their needs because payment preferences vary across different countries depending on their maturity. In several developed cities like Singapore, customers can pay via credit card. However, when it comes to the 60–70% of people in Indonesia, the Philippines and Vietnam who are “unbanked”, cash on delivery still reigns supreme.
Customer demands have diversified, and so should the services e-tailers offer. They must become more sensitive to on-the-ground feedback from customers to be able to adjust their offerings to suit their needs.
Don’t treat deliveries as a cost center: in the long run, a great delivery experience will pay dividends.
Brewer’s Top Tip: Approach the delivery process as part of the value chain. A variety of payment and service options, coupled with excellent service, can create ‘raving fans’, or emotionally engaged and loyal customers who drive up repeat visits and basket size.
2. Hassle-free deliveries
Today’s busier and multi-tasking lifestyles mean that customers have little time to spare and short attention spans. Deliveries have to suit the consumer’s schedule, not the e-tailer or delivery company. One of the best ways e-tailers can add value to their customers’ lives is to offer a variety of delivery options.
Apart from the traditional home or office deliveries, they can make use of what is now the fastest growing delivery method in Europe: parcel lockers, service points, and convenience stores. These facilities are located in areas that customers frequent, so they don’t have to be stuck waiting for delivery staff to arrive. More pick-up options will make the collection experience much less disruptive to their daily lives.
Brewer’s Top Tip: Partner with a delivery company that can provide alternate delivery options (and not just one), without skimping on order visibility for customers.
3. Tools for more control
When it comes to deliveries, customers want to be empowered. They want the best experience possible—from the moment they make their purchase to the point of delivery when they receive their package. 60% of digital shoppers in Southeast Asia rank “experience” as a bigger factor than “price”, which only influenced 45% of those surveyed.
It is important for e-tailers to provide a sense of control and comfort if they want customers to keep returning. They can empower customers with the ability to track and trace their purchases every step of the way. This capability can be performed via a variety of methods, such as online portals or SMS notifications that allow customers to access updates on the go.
Brewer’s Top Tip: Give consumers control as part of your operational process flow. To really go the extra mile, ensure your partners have the IT capability to allow customers the flexibility to change their minds about where and when to receive their order.
At DHL eCommerce, we have already helped hundreds of e-tailers circumvent the challenges I have described. There’s never a better time to build choice, convenience, and control into e-tailer offerings that both e-tailers and consumers can delight in. These demands will continue to grow as ecommerce expands. Our passion is in knowing more about the diverse consumer needs across the region and tailoring ecommerce logistics solutions that fit the requirements of each market.