The first two articles of beautyIQ series looked at how to get customers’ attention by blending transactional and discovery content and localizing it according to Southeast Asian customer cultural preferences. The next step to any brand’s successful ecommerce journey in Southeast Asia is to figure out where to sell their products, which will be the focus of this article.
Two thirds of shoppers in developing Asia say access to branded goods is at the core of their ideal shopping experience.
Yet Southeast Asia has only one third of retail stores per capita compared to the United States, limiting offline shopping of branded apparel, beauty and other products and making the internet a great distribution channel. In order to sell products in Southeast Asia, it is vital for brands to be seen online.
Brands have typically three options when selling online:
- Create a localized brand web store
- Partner with official distributors or sell on social platforms like Facebook, Instagram, LINE
- Open a flagship shop (shop in shop) on a marketplace or online retailer
Of course, each option has its pros and cons for brands to consider. The channel on which to sell online will depend on the particular brand guidelines and its positioning, for example, Kiehl’s strictly cannot sell on a marketplace. Yet, in Southeast Asia having a localized brand web store and presence on a marketplace might bring in more dollars.
Where to Sell
The beauty of selling on your own webstore is complete control over the branding of your products, sole ownership of customer data and higher margins as you would sell directly to consumers and no commissions would need to be paid to ‘middlemen’.
aCommerce internal data showed localized webstores of particular brands in Thailand last year experienced 15% month-on-month growth of gross merchandise value (GMV) and GMV of products sold on brand webstores made up 45% of total product sales on various online platforms.
The risk is that the creation of a brand webstore is pricey as brands might have to invest up to $100,000 over a one year period with additional costs for logistics or marketing.
Selling on social networks is another important channel to capture consumers in Southeast Asia as this is a mobile first region. According to Bain & Co, around 30% of sales in Indonesia come from social media, blog shops and messaging apps as 27% of consumers in big cities and close to 80% in the countryside research and buy products on their phones.
This channel may not be appealing for established brands as social networks are mostly used for consumer-to-consumer (C2C) sales but up-and-coming local, regional or global brands may consider partnering with LINE or Facebook for more personalized communication and direct channel to communicate with potential customers.
Opening a flagship store on an online marketplace or “shop-in-shop” provides more powerful distribution. For example, Lazada drew more than 150 million visitors in August from six Southeast Asian countries (Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore), SimilarWeb data shows. While it is extremely popular in most markets, it’s not the number one go to marketplace in every country.
By analyzing average monthly web traffic, businesses can decide which marketplace to sell its products on for heightened exposure. eIQ has compiled the rankings for Thailand, Indonesia, Singapore, Malaysia and Vietnam.
The benefit of selling on a marketplace is the opportunity to tap into an existing large pool of potential customers. There is no such thing as a free lunch and the cost in this case is more competition and a commission that marketplace will charge for brands to sell their products on their platform.
Tricks to Know
If your brand does decide to sell on Southeast Asia’s popular marketplaces to capture their millions of visitors every day, it is best to keep in mind no two are alike.
Each platform has its own guidelines and product content needs to be modified accordingly.
For example, marketplaces tend to promote products on their front page from brands who have proven good sales, so sellers may find it beneficial to work with a brand solutions team to secure higher visibility for their campaigns.
Lazada allows brands to create a “shop-in-shop” that incorporates interactive features such as sliding banners and video content. This is so sellers can customize their shops to feel like a brand.com and provide shoppers with a pleasant shopping experience. This option may be wise for brands who do not have the budget to create a full ecommerce website.
For beauty brands, Sephora may be a good marketplace to sell on as it features detailed product descriptions and reviews, but all product images are shot from one angle and there is no brand related content. However, compared to, for example, Lazada where almost any brand can sign up to sell their products, getting sold on Sephora is dependent on a decision by retailer’s buyers.
Zalora allows brands to provide a short description or visual, while the product descriptions are standardized. As product reviews are rare on Zalora, the marketplace might offer a discount or some other incentive for users to leave reviews which is a great tool to persuade customers to buy products.
La Roche Posay’s “shop-in-shop” on Lazada is a good example of how to exercise engaging content into a marketplace site. With multiple product displays, sliding banners and video content, the brand stands out amongst other standard displays.
How to Make the Most of Your “Shop-in-Shop”
Follow these tips and they will help your brand gain more visibility and increase sales when selling on marketplaces:
- Fully optimize page design and brand banner (use slides, images, graphics)
- Consider ‘knowledge buttons’ that lead to more discovery content. For La Roche Posay, the knowledge button leads to tips from certified medical professionals. Rich content here is advisable, as the page could be redirected to engaging/actionable content
- Optimize product images: create 360 degree view of products. Currently a lot of brands showcase one dimensional product images, but customers should have a complete view of what they intend to buy as they can’t touch it
- Banner should re-direct to product category page
- Optimize video content to differentiate brand identity: tell a visual story
- Fully engage customers in product details: explain benefits, ingredients/nutrition and instructions (if applicable)
- Create engaging content such as product endorsement (for example, from doctors) and brand history
Brands should consider the above mentioned benefits and drawbacks of selling on various online channels in Southeast Asia as preferences will vary. It would not suit premium and luxury brands to open a “shop-in-shop” on marketplaces as that could tarnish their brand image.
Yet, for many brands, especially new, having both – a brand web store and a shop on various platforms will ensure that more customers see and can buy their products, especially if they are not widely available in the limited amount of retail stores in the region.
Stay tuned for the next article in our beautyIQ series the following Monday.
BY ANUTRA CHATIKAVANIJ AND AIJA KRUTAINE