One of the most attractive points of listing your brand’s products on Lazada is the ability to take part in its multitude of campaigns, accessed by thousands of customers.

Such campaigns aren’t limited in size and scope: they range from huge events like its heavily marketed Online Festival, which include 11.11 and 12.12, to smaller weekly campaigns such as the current ‘Fall In Love’ event for Valentines Day.

Not only does Southeast Asia’s largest ecommerce platform promote campaigns via large banner adverts on its main landing page, it drives traffic via paid acquisition channels and email marketing.

BrandIQ

Valentine’s Day campaigns this week include ‘Valentine Day Sale’ with Unilever in Indonesia, ‘Lazada Delivers Love’ in Philippines, and ‘Fall In Love’ in Thailand

For brands, such visibility is critical; Southeast Asian consumers increasingly use online marketplaces to begin their product journey, bypassing even search engines.

ecommerceIQ

A study by ecommerceIQ found that 57% of Indonesians start their product search on marketplaces.

Lazada promises significant internet traffic during its biggest campaigns – the 11.11 sales event attracted 10 million site visits in the first 24 hours and garnered 10 times the sales volume when compared to non campaign days.

While traffic is definitely attractive to brands, an analysis of campaign promotions by data analytics platform BrandIQ found that companies have limited control over the visibility of their products during such events.

Provided brand managers meet Lazada’s conditions of discount percentage and relevant categories, they can pitch as many SKUs as they like for campaigns such as ‘Flash Sales’ and ‘Daily Deals’. However, this only accounts for a small percentage of the ‘shelf space’ available on the Lazada campaign page with the majority of product placement within the campaign categories out of the brand manager’s control.

BrandIQ

The ‘Flash Sales’ portion of campaigns are among the few ways to boost sales of brand’s products.

Marketplace and Brand relationship

Brands shouldn’t take a hands-off role after agreeing to participate in a particular campaign. BrandIQ discovered that the maximum mileage garnered from these campaigns lean more towards promoting Lazada’s own inventory and not the brand’s official shop-in-shop (Amazon, anyone?).

Lazada holds inventory of major products, and sells it via a retail model. These campaigns offer a window for Lazada to boost sales of its own inventory.

How? BrandIQ deep dived into a current category campaign, ‘IT on Sale‘, running from February 6-9 on Lazada Thailand. The sale advertises ‘up to 70% off’ electronic category products.

BrandIQ

BrandIQ

Both the ‘Recommended Items’ and ‘Mobiles on Sale’ portions of the ‘IT on Sale’ campaign lists Lazada’s own retail SKUs over brand’s Shop in Shop SKUs.

The data indicated that the products listed under ‘Recommended Items’ were sold by Lazada. This is also the case in the sub-category ‘Mobiles on Sale’ portion – for example, all listed SKUs are sold directly by Lazada, rather than the Samsung or Huawei official stores.

Directly under ‘Recommended Items’ is another portion of the landing page titled ‘Top Brands on Sale’.

BrandIQ

Clicking on the brand’s logo takes customers to the brand’s official store, but where is the user directed after clicking the individual SKUs shown to the right of the brand logo?

BrandIQ

BrandIQ ascertained that 13 out of the 20 products listed were those sold directly by Lazada itself, rather than the official store.

This is despite the fact that official shop-in-shops offer the same product; it’s a conscious decision by Lazada to sell its own retail SKU over the brands.

Brands should pay close attention to the evolving nature of marketplaces and look to them as a way to jump into ecommerce, but not the long term game. As the ecommerce landscape becomes increasingly competitive and incentivized; companies need careful monitoring of all acquisition channels if they desire sustained growth.

 

Singaporean netizens rank at 4th place globally for sessions per year on Amazon, when judged in proportion to the number of internet users. That puts them just marginally behind Canada.

Source: SimilarWeb/World Bank

It’s probably one of the reasons why the company chose to enter Southeast Asia via Singapore; not only is there is an internet-savvy population with a high credit card penetration, consumers already have a stated preference to transact with the platform.

Amazon wasn’t physically present in Singapore until last year but the company’s white-label electronic products such as the Echo Dot and Kindle have been stocked and fulfilled by Lazada Singapore through grey market sellers as far back as March 2015, according to analytics platform BrandIQ.

Demand for Amazon in Singapore

BrandIQ mapped the number of reviews on Amazon products on Lazada SG over a three-year time period. When compared against Google Web Search data from Google Trends, there was a direct correlation between the volume of reviews on Lazada and Google search interest for Amazon from Singapore – until the marketplace’s official launch in July 2017.

Source: BrandIQ/Google Trends

Amazon products on Lazada witnessed a spike of product reviews towards the end of 2015, coinciding with the September 2015 announcement of the Fire Tablet and Fire TV product lines.

Google Trends data shows a very similar spike to that of product reviews on Lazada in December 2015, which can be attributed to the holiday season and popularity of the new Fire product lines.

A very similar trend was also witnessed in 2016; product reviews rose following the September 2016 announcement of the new Echo Dot product, with corresponding spikes in both Google Web Search and Lazada product reviews in December 2016.

Web search interest in Amazon reached a crescendo in July 2017 following the Prime Now launch in Singapore. This event also marked the first inverse trend between web searches for Amazon and product reviews on Lazada. While the number of product reviews grew approaching the December 2017 holiday season, it never recovered to 2016 or 2015 levels, suggesting decreased interest across Lazada following Amazon’s entry.

There’s a correlation between Amazon product launches and their popularity in Singapore based on reviews by certified users, but what does it mean?

Rival on Lazada’s marketplace

Despite Amazon’s belated entry into Southeast Asia, its products are still ranking high on Lazada.

The interesting part is that the products in question; Amazon Fire TV, Kindle, and Echo are simply unavailable on Prime Now and can’t be shipped to Singapore from AmazonGlobal, it’s international shipping site.

Instead, these products are sold and fulfilled by a multitude of grey sellers on Lazada such as GeekBite, that has been active on the platform for 3+ years.

Despite its Amazon Prime Now offerings for free international shipping, some of Amazon’s best selling items can’t be shipped to Singapore

There’s clear demand and interest for Amazon products, which leads us to the question: why is a customer-obsessed Amazon content with grey market sellers fulfilling this need?

Standard industry practices indicate that well-known brands often find a crowded grey market for their products to be a cause for concern. Leaving grey sellers to fulfill local demand for foreign products results in brands losing control of their brand image, as delivery, packaging, and warranties from grey sellers usually don’t correspond to the same brand guidelines adhered to by the company.

The answer here is likely linked to the outdated industry distribution rights for television/movie content on the Fire platform and e-book rights for the Kindle. Content distribution rights are negotiated geographically, and local distributors commonly have long term contracts with content producers. Amazon either hasn’t prioritized, or is still in the process of securing distribution rights for Southeast Asia, and thus can’t make these products available to purchase.

What Amazon is falling short of, grey market sellers are picking up admirably. In the electronics categories including “Tablets” and “Video” on Lazada, Amazon products rank in the Top 10 when sorting by “Popularity”. The Amazon Fire TV Stick and Amazon Kindle stand out within their own respective categories.

The prices of items like the Kindle are also marked up by almost 23% (US$79.99 on Amazon US vs US$103 on Lazada SG) and the Echo Dot is marked up by 15% (US$49.99 on Amazon US vs US$59 on Lazada SG).

Singaporean consumers itching for the new Amazon items are stuck with purchasing through grey sellers on Lazada, like local reseller SGKindleShop, who offers the Kindle for US$155, or like forwarder shipping service like comGateway, which can set you back another US$15 for the US$79 Kindle, only slightly cheaper than the US$103 price tag on Lazada.

Cost of shipping a 1kg package using a forwarder shipping service from the US to Singapore.
Prices in SGD

Amazon is missing out on a large potential revenue source by foregoing some of its best selling products on Prime Now. It’s also unable to cross-sell by offering enhanced product warranties, which are an important addition to overall product revenue streams.

Unless Jeff Bezos makes a conscious decision to include Amazon’s products on Prime Now SG, it’s going to continue to cede the market to grey sellers on its largest regional competitor.

Osman Husain of ecommerceIQ contributed to this report.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’s TOP MARKETPLACE

Millennials are shaking up the travel industry with their penchant for authentic, unique experiences and Muslims are no exception to this rule. The size of the Halal travel industry is expected to skyrocket with more millennials entering the workforce and pocketing greater disposable incomes.

That’s one of the key takeaways of “Halal Travel Frontier 2018”, an industry report published by Crescent Rating in conjunction with MasterCard.

Crescent Rating, which first started analyzing the Muslim travel market in 2008, says that there were an estimated 126 million Muslim travelers in 2016. The number is expected to grow by nearly 30% in the next four years, settling on 156 million travelers in 2020.

In 2015, Crescent Rating estimated total purchases by Muslim travelers to be roughly US$145 billion. This factors in expenditure on Halal food, hotels, excursions & experiences, and shopping. The number is expected to rise to a colossal US$300 billion by 2026 – more than doubling in volume in a little over a decade.

A large chunk of this growth is fueled by millennial Muslim travelers in the fast-growing economies of Indonesia, Malaysia, Turkey, and Gulf countries. 60% of the population in Muslim majority countries is currently under the age of 30 – a stark contrast to the global average, which is 11%.

It’s a demographic that players in the travel & tourism space simply cannot afford to ignore anymore.

“Brands would also need to increase their level of empathy and find new ways to better connect with Muslim travelers,” explains Fazal Behardeen, CEO of Crescent Rating. “This will be key in order to both appeal and empower their Muslim travelers.”

What are Muslim millennials looking for?

One of the seminal insights proffered by Crescent Rating is the emergence of the Muslim female travel segment. This particular demographic is gradually becoming a force in its own right with females opting to travel with their friends & family in small to medium-sized groups.

The key purchasing factors for such consumers are “specialized travel products and lifestyle services.” Destinations looking to attract female Muslim travelers are advised to engender a safe and accessible environment that respects the cultural and religious sensitivities at play.

South Africa and Indonesia are tipped to be major travel destinations for Muslims, but Asia as a whole is expected to eat up the largest chunk. The Indonesian government itself has set up an ambitious target of attracting 5 million Halal travelers in 2019, more than double the 2 million that visited in 2016. Other popular destinations are Malaysia, Thailand, and Singapore.

Sporting events in Asia such as the Winter Olympics in South Korea this year as well as the Tokyo Summer Olympics in 2020 are also expected to court significant numbers of travelers from Muslim-majority countries.

Outbound travel markets. Photo credit: Crescent Rating

The potential is undeniable. How can brands cash in?

Muslim travelers tend to weigh in specific factors before reaching a firm decision on a travel destination, according to Crescent Rating. There should be facilities that allow for accessible prayer areas, restaurants & cafes serving certified Halal food, and toilets with provision for ablution. Most travelers will flock to social media or do extensive research on the web prior to embarking on their journey.

At the same time, governments also have an opportunity to help local businesses by offering prayer facilities and Halal food in public locations like airports, railway stations, and places of interest. Taiwan is cited as an example of a country actively working to meet this demand.

Like millennials around the world, Muslim travelers will likely start their buyer’s journey on the web by searching for travel content but most mainstream sites – Booking.com and Agoda, for example – don’t have dedicated listings for Halal-friendly establishments or significant insights on where Muslims might feel comfortable.

“We find that Muslim millennial travelers are like most millennial travelers apart from their uncompromising faith-based needs,” explains Raudha Zaini, marketing manager at Halal Trip, a B2C travel portal for Muslims. “They seek what we call the 3As when they travel – Authentic Experience, Affordable Facilities and Accessible Network – all within the radius of their faith requirements.”

According to the Pew Research Center, the Muslim demographic around the world is expected to grow twice as fast as the overall world population between 2015 to 2060, reaching a projected 3 billion individuals. In terms of consumer spending alone, the global Islamic economy generated US$1.9 trillion in food and lifestyle expenditure in 2015 with projections that it’ll grow significantly to US$3 trillion by 2021.

For brands looking to appeal to a gargantuan demographic hiding in plain sight, they’ll have to focus on crafting their message and developing empathy. That’s key if they’re looking to connect with young Muslims on a personal level. One thing for sure is that the market will continue to expand at a ferocious rate.

So far the rate of adoption has been slow, at best. UK-based retailer Marks & Spencer launched a burkini swimwear collection in 2016 to a spurt of criticism. Despite dissenting voices, the line completely sold out showing there’s real demand.

Other examples are the 2017 launch of the four-star Al-Meroz hotel in Bangkok, the first Halal hotel in Thailand as well as Expedia’s US$350 million in Indonesian online travel platform Traveloka the same year.

But these are tepid responses to a market valued at hundreds of billions. Larger brands can, and should step up to match smaller incumbents like Indonesian halal cosmetics company Wardah, India’s IbaHalalCare, and California-based AmaraCosmetics.

The Background

Danish jeweler Pandora rose to fame to become a household name after launching its signature charm bracelet in 2000, almost two decades after married couple Per and Winnie Enevoldsen began their modest jewelry business in Copenhagen with imported goods from Thailand back in 1982.

Their success in the Danish market pushed them to think outwards, leading to the company’s international expansion into the US market in 2003, followed by Germany and Australia in the following year.

Fast forward 14 years later, Pandora’s Thai-made fine jewellery is sold in 100 countries through over 900 concept stores, not to mention the 10,000 other retail distributors around the world.

Funny how one little charm bracelet propelled the brand into the global limelight and accounts for 77% of the company’s global sales.

How did this all happen?

One has to take a look at the evolution of the fine jewelry industry to understand Pandora’s success.

The bracelet popularized the brand because of its upscale look and relatively affordable pricing in a market dominated by Tiffany and Co and Cartier. The price of a Pandora bracelet starts at $35 and with more than 800 charms to choose from, the consumer can collect and customize their own bracelet that often signify a milestone in life.

The charms bracelet is the top selling product for Pandora. Image: Fortune

“They tapped into the consumer’s desire for jewelry pieces that are highly specialized.” – Erica Russo, fashion director of accessories and beauty at US department store Bloomingdale’s.

“There’s something for everyone, so there’s a wide appeal for shoppers,” continued Russo.

With a lucky charm under its belt, Pandora issued an IPO in October 2010 to raise $2.1 billion and now the company is the third biggest jeweler in the world behind Cartier and Tiffany and Co, but with a third of its market value wiped out earlier this year, can it maintain this position?

The Challenge

The growth of the global jewelry and personalised accessories market in general has been stumped over the years thanks to macroeconomic factors such as inflation and unemployment plaguing the industry. But global geopolitical and economic uncertainty are not the only things slowing down growth.

Legacy jewelry brands are also slow to identify the shift in their audience’s behavior.

Long gone are the days where women only acquired new pieces of jewelry as gifts from husbands or significant others.

Today, with the increase in women’s purchasing power, ladies are buying their own jewelry — a fact still largely ignored by traditional jewelry brands.

A survey by Jewellery Consumer Opinion Council found that as a jewelry consumer, the [female] demographic is largely underexploited and ignored by the broad spectrum of the jewelry industry.

Unlike previous generations, millennials and Gen Z don’t find the charm of brands like Tiffany & Co as attractive or as Neil Saunders, CEO of retail research firm Conlumino says,

“Millenials are increasingly unmoved by brand names and seeking more bang for their buck, Tiffany’s “old-world luxury” charm isn’t working.”

“Although the brand is not seen as negative, it is seen as being somewhat tired and traditional,” noted Neil. “ Young consumers especially see it as a brand for the older and a different era.”

Not to mention that the younger generation has more options and exposure to smaller brands through online shopping. With its shares suffering and only one successful product, Pandora needs to adapt to the market situation to survive now more than ever.

Pandora shares drastically drop in 2017 after years of high growth

The Strategy

In an effort to move beyond its charm bracelets, the company is actively pushing its line of rings and necklaces, marked by the company’s 2015 Mother’s Day campaign “The Art of You” that featured three female generations passing down jewelry pieces – no men.

“Pandora has deep ties to charm bracelets that memorialize times and people. What’s new here is we’re taking that heritage and bringing it into the future, where it’s also about self expression,” explained Caitlin Ewing, Executive Creative Director for marketing agency Grey that collaborated with Pandora for the campaign.

The campaign hit its target, sale shares of the company’s rings rose to 13% from 4% in 2014.

Pandora’s ‘The Art of You’ campaign popularized its ring selections. Source: Canadian Jeweller.

Furthering its priority to target millennial women, Pandora also launched a global campaign called “Do”, proving no matter where you are in the world, there are values that all women share.

“Today’s consumers expect you to have a point of view and a voice an enable them as opposed to being a director of them. The Pandora voice is all about inspiring women to be true to who they are,” said Charisse Ford, Chief Marketing Officer for Pandora Americas.

However, the company is not without misses. A recent holiday campaign by the brand in Italy received backlash for its marketing message that was deemed sexist and forced the company to release an apology and pull its ads from subway stations.

Translation from Italian: “An iron, a pyjama, an apron, a Pandora bracelet. In your opinion, what would make her happy?” Source: Lefanfarlo Facebook Page.

Pandora also distances itself from the image of a traditional jewelry brand with rich heritage as seen by the lack of narrative or celebrity endorsement to gain a wider audience.

Another standout factor from Pandora is the way it operates its business.

“One of the reasons why Pandora has been so successful is we don’t behave like a jewelry company, but more like a fashion brand,” said Isabella Mann, Pandora VP Marketing for APAC.

Similarly to how fast-fashion companies function, Pandora releases new product lines seven times a year, only two months apart, much more often than traditional jewelers that do it quarterly.

It seems to be meshing well with a generation with shortening attention spans as Pandora was the only “new luxury brand” chosen as a favorite by affluent millennials in a survey by MVI Marketing.

One of the biggest contributing factors to Pandora’s rapid growth is how the company took full control of the supply chain process.

By setting up production in Thailand, the company was able to decrease its operational costs and maintain the quality of its products. The company plans to produce 200 million pieces per year by 2019 Q4 and promote the Thai jewellery industry at a global level.

Pandora also controls distribution in India and Africa by buying back local franchises that sell its jewelry, both in the branded concept stores and shop-in-shops.

In growing markets like Asia, that contribute to 19% of the company’s overall business and registering the fastest growth rate for jewelry, Pandora wants to maintain the brand rather than build stores.

The opening of Pandora store in Hong Kong. Source: HK Citylife.

“It’s no longer about building the brand, but about maintaining the brand. You’re not going to see loads of Pandora stores opening anymore,” said Mann.

Without new store openings, the company has more resources to focus on its online strategy.

Its ecommerce store opened in the US in 2015 after testing the European market a few years earlier. The company’s online store is now available in three continents including Asia Pacific but in Southeast Asia, Singapore is the only market where shoppers can order online through its website.

Pandora’s online store is available for customers in Europe, America, and Asia Pacific.

The Future

Pandora’s journey as a relatively new jeweler has been filled with instances of trial and error as it emerges from legacy luxury brands such as Tiffany and Co as a front-runner in the lagging luxury jewelry retail scene.

By cutting costs through effective manufacturing practices, leveraging ecommerce to shift away from brick and mortar, and even creating PR buzz through controversial advertisements shows the brand’s agility on responding to adversity and obstacles.

The company seems well on its way to achieve its aspiration to become the world’s most loved jewelry brand.

If diamonds aren’t forever, Pandora jewelry is.

It’s hard to escape news of changing consumer behavior and ongoing retail ‘disruption’, especially amid the year’s largest sales. An evident signal of this shift has been the steady decline in foot traffic to once widely /lopular Black Friday sales in shopping malls.

Net sales on Black Friday slid 10.4 percent for brick-and-mortar chains, according to RetailNext.

For digital-first businesses, launching online is a no-brainer. But what happens when you are an existing brand that is over 80 years old working with hundreds of distributors around the world? Speed and simple decision making are out of reach.

At the Shangri-La at the Fort Manila, four brands – Abbott, Unilever, Payless, and Titan22 – each leaders in their own categories, were brought together by ecommerce enabler and e-distributor aCommerce to candidly share customer preferences, impact of traffic congestion and what must change internally in order to stay relevant in the future.

This is what was discussed:

1. More Filipino men pushing the carts

“There’s a lot more male shoppers going for groceries, it used to be the woman that was in charge of nutrition labels, but now they tell men to do it,” says Christian Domingo with a laugh. He is the Head of Ecommerce for Abbott Philippines.

Findings from a recent Nielsen study show that 40% of today’s grocery shoppers in the Philippines are men, an increase of six percentage points from last year. The driving factor? Affluent Metro Manila residents, especially in dual-income households.

Nielsen

Grocery shopping behavior for men and women in the Philippines. For more charts & graphs, visit here.

What this means for brands is to rethink marketing strategies traditionally targeted towards women.

Referencing another study, Christian attributed the popularity of ecommerce to worsening traffic conditions in the Philippines. CEO and owner of Titan22, the top sneaker retailer in the country, Dennis Tan, also shared his experience.

“The customer decision window is getting shorter and shorter. It used to take days where people thought about purchases and then come back to it but now the entire process seems to happen with minutes.”

He should know as Titan sold 400 pairs of Jordan Elevens during Single’s Day (11.11) in the first hour online.

“I won’t drive for hours for a chance to get the right shoe size. Consumers have a lot of options where to buy products, so we need to offer a competitive advantage.”

2. After-sales is as important as the purchase journey

Ecommerce is commonly misinterpreted as the shopping experience on a website but what gets forgotten is the attention given to the steps that come after checkout.

“How a customer feels after the purchasing experience is a big factor to the entire happiness experience to retail. This is one of the big pieces,” comments Dennis.

“We need to give them inspiration, not only about the shoe, it’s about happiness guaranteed,” agrees Thea Lizardo, Head of Ecommerce for Payless Philippines (Footwear Specialty Retailers Inc.).

3. Internal processes causing friction, there needs to be unified commerce

aCommerce, ecommerceIQ

Christian Domingo and Thea Lizardo from Abbott and Payless, respectively.

“It’s not typically mentioned but an important factor to talk about is the hurdle of internal friction in terms of technology. There’s a lot of confusion around how we attribute sales,” mentions Thea. “ These discussions are vital to transforming the entire business.”

“How do we remain competitive? How do we keep customers? It’s overwhelming for brands and business owners to adapt to all the changes because it’s so quick but at the end of the day, it’s understanding your numbers, your customers, your behavior and leveraging it.”

“Internally, there is no P&L, who is going to own the digital marketing unit? The marketplace?” comments Christian.

“It’s recommended [at Payless] to have a separate P&L, separate ERP for our ecommerce business as we didn’t want to disrupt the other 76 stores,” replies Thea.

Another internal roadblock Christian hopes to push through is the company’s (lack of) unified shift to ecommerce.

“We are selling milk online but other product divisions such as diabetic drugs need the push. They have hurdles like FDA approval, internal conflict, etc. but what we envision for 2018 is to go beyond the brand because it’s the user looking for a solution to a problem.”

“We [Unilever] have a long heritage selling fast moving consumer goods but we need to move things faster,” closes Kay Veloso, Head of Ecommerce for Unilever Philippines.

“It’s [unified commerce] not an unachievable dream, it’s a basic expectation. B2C, B2B – we serve the entire ecosystem to get the pulse of people we serve, and continue to adapt our brands to ensure their day to day needs are met through ecommerce.”

aCommerce, ecommerceIQ

Kay Veloso at the aCommerce Philippines Partner Media Workshop

4. Data and mobile will pave the retail future

Each brand has their own ideas about the main focuses for 2018. Unilever Philippines hopes to e evaluate its mobile experience to understand if it’s delivering the brand message across the board.

“Omnichannel is the big trend that is here to stay in the Philippines. We need to provide consistent online and offline experiences and preserve the quality of our products both instore and online,” comments Kay. “80% is coming from mobile websites and the Philippines is actually the fastest growing mobile market in Southeast Asia.”

Payless Philippines wants to leverage its data to better utilize its offline stores to become more customer oriented and explore new channels.

“How can we leverage the 76 Payless stores and unify them to serve our customers better? We have online data, consumer data so we can map out our merchandising plan for various locations.”

“Social commerce, exploring the space that we’re not in [social media] but also stores (they can be turned into fulfillment centers). Customers are becoming brand agnostic. We need to capture them when they are on their devices, not only at the mall, people no longer go online, they live online.”

Titan, on the other hand, will focus on expansion through ecommerce to meet the demand growing outside of Metro Manila.

“The challenge for Titan is all our physical stores are in Metro Manila while 50% of consumer base is outside Metro – we will continue to build on it and see what role innovation really plays for us.

“At the moment, ecommerce is more defense than offense, but when you start playing offense is when you start to win.” — Dennis Tan, CEO and owner of Titan22

“It used to be that companies had to set up a website because everyone was doing it but the companies that have their own internal ecommerce teams are the ones that are most successful, you need to be ones to drive and grow it in the organisation.”

Dennis Tan from Titan22


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For more charts & graphs, check out our database.

Online marketplaces offer brands high incentives as it gives them access to millions of customers. However, high volumes of traffic come with a price as they are often attracted to items sold by unauthorized sellers, often referred as grey sellers.

And without official authenticity checks being implemented, grey sellers are at liberty to put whatever the price they want to appeal to Southeast Asians high aptitude to look online for low prices.

To understand how grey sellers impact authorized sellers and the brand’s official stores on marketplaces, data analytics platform BrandIQ draws comparisons between the top three sellers for Samsung on Lazada Thailand.

This data shows that Samsung only controls less than 2% of total SKUs direct or through authorized third party sellers.From a numbers game of SKUs, grey sellers dominate the distribution of Samsung products on marketplace with a total of 51,925 SKUs or 98.1% of all Samsung products available on Lazada Thailand.

On Lazada Thailand, Samsung has several official stores; Samsung Official Store (managed by Lazada), Samsung Official Shop (managed by Samsung), Samsung Official eStore – Consumer Electronics, Samsung Official eStore – Mobile; as well as authorized sellers.

Multiple stores leave Samsung unable to create a unified brand experience confusing consumers as to which channel is more reliable given there is overlap on the product offering. Each channel also offers a different policy on payment and delivery.

How about price differences?

Taking a look at the price points for several products, BrandIQ data shows that grey sellers actually offer lower prices on average compared to the official Samsung channels. They can vary between 4% to as high as 63%.

Price comparison between Samsung official stores versus grey sellers on Lazada TH

From the consumer point of view, experiences from grey sellers offer a varying standard of service unsurprisingly but looking at ratings from three Samsung smartphone products show the official store still has the more favorable opinion from consumers compared to unofficial sellers.

Review comparison between official store vs. grey seller

However, it still remains a lose-lose situation for Samsung because consumers with a negative experience from grey sellers impact the Samsung brand and if they have a better experience with grey sellers, they will continue purchasing from them, causing Samsung to lose market share.

What does this mean for brands?

It becomes important for Samsung to create a unified brand experience in order to gain more market share on marketplaces like Lazada, especially with the numerous grey sellers flooding the site with their products.

Provided that marketplaces also suffer from counterfeit issues and grey market sellers, popular brands can work with Lazada and Shopee to boost its presence on the website through front page banners and onsite ad placements offered through Shopee’s new feature Shopee My Ads.

Consumers don’t want to think twice, and usually don’t even care, about differentiating between channels as long as they get the right product at the right price.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’S TOP MARKETPLACES?