The first thing that comes to a consumer’s mind when asked about virtual reality (VR) often involves gaming.

Why? Because virtual reality is used to describe a three-dimensional, computer-generated environment that can be explored by a person. That person is immersed in a space where they are able to manipulate objects or perform a series of actions.

The virtual reality technology buzz, whether in content or hardware, is projected to be worth $80 billion by 2025 globally, while gaming unsurprisingly will make up the largest share of an estimated value of $11.6 billion.

But the application of virtual reality is not limited to only video games. According to Jirayod Theppipit, CEO and Founder of Infofed, a VR content development startup, virtual reality can be used as a marketing strategy in almost every area.

“Dare we say that virtual reality is the future of content? The experience VR offers can solve the pain points of businesses in almost every industry.”

“People often associate virtual reality with gaming and we can’t blame them. Consumers in the gaming segment have the ability to afford new technology and gadgets,” continues Jirayod. “This is why they’ve adopted virtual reality before others.”

Instead of scrambling to compete in an already crowded gaming market overtaken by virtual reality gaming content creators like VRX, Infofed sees a blue ocean in real estate for virtual reality content in Thailand.

“I know this technology is going to take off because big players like Facebook and Google have already jumped into it.”

Two years ago, Facebook invested $2 billion into VR technology to promote its own VR headset Oculus and only earlier this year, Apple launched ‘ARKit’ to turn its iPhones and iPads into AR/VR (Augmented Reality/Virtual Reality) devices.

IKEA has already jumped on board with its new app, IKEA Place.

IKEA ecommerce

The highly affluential Chinese shoppers have also taken a liking to VR based on a survey by Worldpay, which has been a strong indicator of how content will be consumed in the future.

Phil Pomford, General Manager for Asia Pacific at Worldpay, says,

“China is blazing a trail for VR/AR adoption and showing other Asia Pacific markets what the future could look like…with China leading the way, Asian businesses should start investigating the future of VR/AR technology now, so that they’re ready to meet consumer demands as and when they arise.”

84% of 16,000 consumers surveyed across Asia Pacific believe that AR/VR is the future of shopping, 92% say they’d like to see more retail apps make use of AR/VR – Worldpay.

But for a nascent market like Thailand, can virtual reality successfully take off?

Infofed believes it already has.

ecommerceIQ speaks with Jirayod to understand how the two-year old startup has utilized VR in industries like tourism and education and what it has learned from its latest project, real estate.

Giving a slow-moving industry an upgrade

The current real estate industry in Thailand is experiencing slowing growth but the number of new condominium units are set to rise 15% from 2016.

To sell units, typical marketing tools often include flashy brochures with heavily photoshopped photos and miniature models in an attempt to give homebuyers a glimpse of the expensive home they should buy.

Higher-end real-estate developers will also set up a physical showroom for visitors to experience the ambience of the unit, but this requires travel and more effort than today’s digitalized world is used to.

Virtual Reality Infofed

The Deck, project by Sansiri. Source: Sansiri

“Because my background is in architecture, I can understand the blueprints and engineering language that the marketing material contains but there are many people who are confused by it. The current content in brochures and on websites aren’t extremely helpful for consumers who want to properly ‘experience’ the product.”

Through VR content, Infofed believes that its content can help developers market its products to consumers. What better way for someone to experience their new home than to actually walk through it?

The company has already worked together with Nirvana Property, one of the leading developers in Thailand, to showcase its showroom through virtual reality content.

 

Virtual Reality Infofed

Virtual reality Showroom for Nirvana Rama 2 by Infofed

Consumers are able to view the showroom in 360 degrees, simply through their electronic devices without the need of a virtual reality headset.

According to Jirayod, consumers on average spend up to five minutes viewing a VR showroom whereas they spend no more than two minutes flipping through a brochure.

“The longer consumers spend on our content, the more interest they develop in the product and reflects on a higher rate of purchase.”

The appeal of VR can also save real estate companies money to build and dismantle their showrooms – especially in trade shows and exhibitions. From Jirayod’s past architectural experience, building a showroom has an average cost of $60K for condominiums and $200K for houses.

Creating VR content, on the other hand, can start as low as $1,500 at Infofed according to Jirayod.

New age but in demand

Despite North America being the current leader in VR content market with a share of 73.4% in 2016, Asia Pacific is forecasted to exhibit higher growth.

Transparency Market Research has forecasted that this region will see an exponential CAGR of 116.1% between 2016 and 2024.

Virtual Reality Infofed

But in order to capture the opportunity VR presents, Infofed is committed to educating Thai consumers about new technology and training the people necessary to create VR content. One way it has done so is by creating content for influential industry players like the Tourism Authority of Thailand and leading real estate companies.

“It’s important that we help create build an ecosystem for virtual reality content. I have never viewed other virtual reality players as competitors but instead as partners to together push this technology out.”

Infofed has also brought in experts from the US through partnerships to equip its local staff with sufficient virtual reality knowledge to produce content. It’s also sharing its own experiences at top universities to educate the incoming digital-savvy workforce.

Virtual Reality Infofed

Infofed Team

All of the company’s efforts come down to one goal – to make Thailand a virtual reality society, even if it’s not fully ready now.

In the last 12 months, 144 million people went online for the first time in Southeast Asia — 45 million from Indonesia alone — to shop, to chat, to share news and to connect.

This brings the total internet population in the region to over 1.9 billion people.

While the internet penetration rate for the region (47%) is still below the world’s average (51%), the growth of internet users in the region (8%) outpaces the global rate by 1%.

social media apac

And the catalyst for the rapid growth in the sector can be credited to…social media?

More than a platform to share selfies

Excluding Indonesia, the latest findings from Kepios show that social media penetration in Southeast Asia’s biggest markets (Thailand, Singapore, Malaysia, Philippines, and Vietnam) is above 49% of the region’s population.

social media apac

What has fuelled this social media frenzy?

In these markets, being connected has transformed the standard way of life. Anyone can become an “entrepreneur” with a Facebook/Instagram shop, customers order from a marketplace at any time of the day, businesses can sell direct to consumer and the world becomes an entirely accessible market.

In some markets, Facebook is synonymous with the internet.

And these platforms continue to improve their user experience with fresh content, new algorithms, and media formats to hook users into browsing for longer.

Instagram is one example of a social platform that continues to innovate. The Facebook-owned company recently launched a “shoppable post” that aims to let 2 million of its advertisers sell directly to the photo-sharing’s 800 million users.

Although the function is only available to businesses in the US at the moment, Southeast Asian companies should be active on social channels and take advantage of features that push the digital trend agenda forward.

It won’t be surprising to see more of this in the region.

commerce marketing

Criteo Exec Connect 2017 in Bangkok

“The question that needs to be asked is not for more channels but have we maximized our efforts in the current ones?”

This comment comes from Scott Minteer, VP of Online Marketing at LOOKSI (previously Zalora Thailand), during an executive roundtable held by Criteo Exec Connect last week.

The once popular question, “should I go online?” has long passed.

In a room filled with the region’s top ecommerce players, enablers and forward thinking global brands – LINE, Lazada, Agoda, Beiersdorf, Meiji, aCommerce, Orami, Konvy, etc. – the question has now become, “how do I maximize the returns on my existing ecommerce assets?”

How can I drive a higher number of quality users to my app, my webstore, my marketplace shop-in-shop to increase conversions?”

When the majority of retail’s biggest names are trying to reach customers through a desktop/mobile website, marketplace official shop, and/or dedicated app, it’s easy to get lost in the digital space.

This is where quality commerce marketing technology comes into play.

Companies with vast ad networks mixed with new age machine learning such as Criteo, one of the world’s largest commerce marketing ecosystems, exist to help growing businesses like fashion retailer ZALORA and booking giant Expedia capture the attention of Southeast Asia’s most relevant 200+ million digital consumers.

Commerce Marketing

Alban Villani (Criteo), Julien Chalté (LINE), Thanawat Malabuppa (Priceza)

ecommerceIQ chats with Alban Villani, General Manager of Criteo Southeast Asia, Hong Kong and Taiwan, to understand where the region stands in terms of marketing maturity, how brands can optimize online performance and how businesses can adapt to gain more from marketing tech.

But First, Education.  

There are multiple ways that a business can drive traffic to its ecommerce store – banner ads, search keywords, SEO-optimized content, etc. – but marketers need to first understand if they are utilizing the right channels for their market.

Is the business driving traffic to the best channels?

Alban believes there are a few changes that need to happen before retail can really take off in the region.

  1.     Ditching a conservative approach

“Smaller brands need scale and personalization to compete on equal footing with larger retailers. Sometimes all marketing effort is still placed only on desktop,” says Alban.

The desktop started as the main device favored by consumers to shop on but in order to reach the new generation of shoppers using various devices to browse through multiple platforms, companies need to capture much more information than the conventional statistics reveal such as age, gender, geographic location, etc.

MatahariMall.com, one of Indonesia’s largest retailers, used a Criteo specialized retargeting tool to discover an online visitor’s readiness to purchase by assessing factors such as consumers’ online navigation patterns and what they add to ‘shopping carts’. This increased the e-retailer’s advertising ROI by 900%.

Once a customer has been segmented, simple dynamic retargeting tools can then display the most relevant ads in real-time to them later in the purchasing funnel and local brands can leverage targeted marketing to capture relevant shoppers outside the walls of their own assets on third-party apps like Facebook.

Take for example, Joan is browsing on the Lazada app for a Maybelline lipstick on the brand’s official SIS (shop-in-shop) during her morning commute to work. In the evening, she accesses her desktop computer at home to look at vacation photos on Facebook when she notices an ad that shows her the same lipstick she didn’t purchase earlier in the day. She decides to buy.

https://www.youtube.com/watch?v=1vgAQvWZMzk

Businesses of all sizes are slowly beginning to realize that channels are all connected and marketing efforts should reflect the same by tracking cross-device and cross-platform performance.

  1.     Investing into a mobile application

“They [brands] are already making money on web, so they don’t spend too many resources on app,” says Alban.

Southeast Asia’s affinity for smartphones has caused companies such as Shopee and LOOKSI to adopt a mobile-first strategy to reach a wider audience. By building an app with strong UX and ads targeted at encouraging installs, they can directly send alerts and deals with loyal customers.

Central Group’s Scott commented that majority of the LOOKSI’s revenue came from its app.

Commerce Marketing

LOOKSI app advertising

“We build brand awareness through desktop so it’s still needed but the conversion rate is higher on the app,” says Scott.

The popularity of mobile apps in the region and performance marketing tactics like in-app retargeting by Criteo increased Zalora’s app traffic and sales transactions by 9X from September 2015 to 2016.

More than 4 in 5 Thai respondents find it more enjoyable and convenient to use a retail and shopping app over a brand’s mobile website – Criteo APAC Research

“The key to mobile success is keeping the retention rate high because even a 5% increase could grow the value of purchase from anywhere between 20 to 90%,” shared Ronen Mense, VP Asia of Appsflyer, during the roundtable.

“You can talk about the future and what’s going to happen based on future technologies like progressive web apps, AR, VR,” he continues. “But the most important thing to focus on is where your consumer is engaging with your brand and service today. If you wait until a new technology reaches critical mass, it will be too late.”

“The focus isn’t only on installs anymore, the key challenge for brands is encouraging repeat usage and improving conversions,” says Alban. “Very simply, it costs more to acquire a new user than it is to retain an existing one.”

A Real Marriage Between Online and Offline Data

“Thailand started to slow down in [retail] progress a year and a half ago. What we have seen is mostly consolidation, meaning there are fewer ecommerce sites and fluctuating churn.”

Less opportunity has led to an emerging hybrid model where brands and ecommerce sites must work together.”

What Alban is referring to is a symbiotic relationship where ecommerce platforms like Lazada, Konvy, etc., build tools to enable sellers to gain more visibility on its platform and sellers in turn, share consumer behavior data – what do they like to buy? Which products do they purchase together, what time do they like to purchase?, etc.

“Lazada wants brands to be more involved, we empower them through our platform and technology, while brands bring in their deep consumer knowledge,” commented Aurélien Pallain, EVP of Marketing at Lazada Group, at Criteo Exec Connect.

Although marketplaces are slowly developing in-house solutions to help its sellers drive traffic to their shop-in-shops, majority are still heavily dependent on off site re-targeting agencies to acquire high volumes of traffic by tapping into a large publisher network.

“Data sharing is necessary to help companies maximize their online performance, it benefits all parties and ultimately the consumers by allowing brands to reach them with relevant offers,” added Julien Chalté, Head of Ecommerce at LINE Thailand.

To optimize existing ecommerce assets is to optimize available marketing tools through data.

But in order to capture valuable data, structured systems need to be in place internally in a business and this is where Thailand’s traditional retailers and brands lack maturity.

Criteo has the capacity to utilize a brand’s offline database to reach a custom audience online, but very few players in Thailand’s retail industry have tech-powered brick and mortar stores or “clean, usable data” from offline purchases.

“Criteo uses first-party data, never the third party, to build quality product recommendation so clients use us as a discovery tool as well as a conversion tool.”

“We can take data from the brand that they have collected from their CRM, loyalty cards, and offline transactions and match it with our recommendation engines for O2O [offline-to-online] marketing but not many businesses have this type of information readily available,” says Alban.

How can this be fixed?

By holding more brainstorming sessions like Criteo Exec Connect and building more partnerships within the ecommerce ecosystem between enablers, platforms and brands, Alban feels positive about the region’s development and piquing interest from brands looking to improve existing marketing efforts.

Commerce Marketing

Criteo Exec Connect 2017 in Bangkok

“Smaller brands must tap into an open commerce marketing ecosystem and use machine learning to connect shoppers to the products they need and love. Criteo’s technology allows them to engage shoppers with relevant experiences on both retail apps and third-party platforms directly driving sales and profits.”

“There’s actually a quicker speed of adoption in Thailand than Singapore between brands and agencies. The big difference is in the average revenue per user (spend) but most brands are more interested in looking at market potential.”

And where else has a brighter potential than Southeast Asia’s online future?

Download the Report2017 Criteo APAC Research: App Commerce Goes Big in Thailand

THIS POST IS SPONSORED BY CRITEO

ecommerceIQ, together with Sasin SEC, created the Leadership Ecommerce Accelerator Program (LEAP) to provide the fundamental knowledge and skills needed to successfully run an ecommerce business in the world’s fastest-growing market.

The third week of LEAP dove into a session disproving what most marketers still commonly think of as the “magic dust of strong sales” and introduced digital marketing concepts such as SEO, SEM and retargeting tools to students looking to grow their customer base.

Here are some of last week’s LEAP highlights:

1. “Growth hacking is bullshit, there is no shortcut to growing your business”

SHEJI HO, GROUP CMO, ACOMMERCE
ecommerce growth marketing

Sheji Ho, aCommerce Group CMO at LEAP 2017

The biggest takeaway from Sheji’s two hour lecture on digital marketing is that companies should ask themselves “if the market needs their product” before spending money on Google and Facebook ads. Popular businesses like ofo, Seekster and Blue Apron, may run into trouble because they lack what Brian Balfour refers to as “market-product fit”.

Examples below:

ofo – Thailand’s roads are the second deadliest in the world, does it make sense to have bike sharing in Bangkok?

Seekster – home service on demand started in the US but churn rate began increasing because once a user finds a suitable cleaner through the platform, most home owners would take the transaction offline.

Blue Apron – once people learned what ingredients to buy and how to cook the meals, would they continue ordering expensive meal kits?

ecommerce growth marketing“Before you spend money at your product, does your business make sense in this time and this market? Because if not, people won’t use your product regardless of how much money you throw at it.”

2. Ok Google, teach me about SEO

KORAVUT PAVITPOK, HEAD OF GROWTH MARKETING, ACOMMERCE
ecommerce growth marketing

Koravut (Bom) Pavitpok, aCommerce Head of Growth Marketing

What is Google’s market share in Thailand?

A whooping 99%.

It’s almost essential then to understand how Google search can drive quality online traffic to your website through proper SEO (search engine optimization), SEM (search engine marketing) and dynamic retargeting.

Based on factors such as search volume and intent, companies can bid on keywords to capture the attention of Thailand’s most likely buyers.

ecommerce growth marketing

The more accurately you can target users on the lower end of the funnel, the more likely to see conversions on your ecommerce channels.

Think of Google search like street names,” says Bom Pavitpok. “You want to be on the most popular street for your particular category.”

The next LEAP class is on Thursday September 28th, 2017 taking a look at social media marketing, Google analytics and a Central Marketing Group case study. Stay tuned for next week’s takeaways.

[LEAP Week 1] eIQ Insights: The New Ecommerce Opportunity in Thailand

[LEAP Week 2] eIQ Insights: Refinement of an Ecommerce Channel Strategy


Sign up for the eIQ Weekly Brief to receive weekly ecommerce insights.

Instagram celebrated the first anniversary of IG Stories earlier this month. In one year, the platform has become one of the most important online channels for brands to reach customers as more than 70% of IG users follow a brand page and 22% of shoppers have regularly used Instagram to browse products.

With 250 million daily active users, Instagram Stories has become a new favourite tool for marketers as half of the businesses on the social channel have produced a story in the last month alone.

Its appeal comes from the contrast of Instagram’s two functions; the polished image shots and the “raw” side of the capture process.

“Within the same platform now we’ve got this lovely juxtaposition that allows you to tell a richer story, but maybe [providing] a more authentic, or more earthy experience alongside the more polished core visuals,” said Hugh Pile, CMO L’Oreal Western Europe.

Instagram Stories Brands

L’Oreal’s post on Instagram Stories

However, with so many advertising channels now available to brands, it is important to know what is the right content to produce on Instagram Stories for success.

The path to conversions

There are five main categories of activity that brands can encourage users to do with the feature in the ads for Instagram Stories, but shopping is the most popular objective for brands as 59% of the ads Stories produced since its launch in March linked to a page where the products featured in the ads were available online.
Instagram Stories Brands

 

“Instagram has integrated ecommerce handoff technology into Stories, namely swipe-up links leading to brand sites, linked influencer tags, and checkout buttons that support brand efforts to move beyond engagement metrics and render their live video content shoppable.” – L2

Brands also use Stories as a gateway or teaser to drive traffic to more elaborate content on platforms like Youtube or Facebook where shareability and engagement are more likely with the user.

Product promotion is still the most popular type of content in Stories, which accounted for 36% of content produced by brands, followed by ‘behind-the-scene’ pieces, and influencer endorsement.

Instagram Stories Brands

Video has also increasingly become a more effective media format that drives online shopping – 34% of Indonesian youth were influenced by video ads to shop online.

With more tools available for brands to engage consumers, especially in a market like Southeast Asia where online marketing channels are dominantly Google and Facebook, it’s time for brands to get more creative.

Popping up everywhere in product advertising, content marketing and online web stores is video. Companies like Buzzfeed and Dove were among the first to witness the effects of viral marketing through short popular three minute movie clips but it’s no longer businesses with large budgets that are taking advantage of a growing audience preference for moving visuals.

Samsung Galaxy S8 video ad that automatically plays upon page load. Source: TheStreet

Tools like Facebook ad format Collection and Facebook Live focus on video content to boost retail sales given that video posts have a 135% greater organic reach than photo posts. An Adidas’ campaign promoting various apparel items resulted in a 1.8X decrease in cost-per-conversion, according to the brand.  

SMEs in Thailand running an online auction through Facebook Live to sell products, usually clothing and accessories.

Based on majority of statistics floating around the web, data points to a healthy customer engagement with “video storytelling”.

According to Cisco, video is projected to claim more than 80% of all web traffic by 2019 and Forrester estimates that a video included in an email campaign will garner a 200-300% increase in click through rate.

Versus a still image, video content is more emotionally compelling and reinforces the messaging behind a brand and its product.

Watching a video is simple enough, but do they directly impact consumer behavior?

A recent whitepaper by Nielsen, “Cross Platform Report 2017”, conducted a survey to find out how Indonesians react after interacting with online video ads.

Respondents between the ages 21 – 49 were most likely to connect with a brand – call, go to store, purchase online – after watching an online video advertisement. Those over 50 years old were less likely to be affected by video content.

 

Source: Nielsen Cross Platform report 2017

But all that’s video is not gold

The message isn’t that every brand manager should grab a camcorder and throw their marketing budget into producing a product video.

Findings from market research firm in the US L2 Inc shares a cautious message,

“Brands invest heavily in video on a variety of platforms, including TV, YouTube, and social media. However, videos on the homepage can have a negative effect on site engagement metrics.

L2 found that the 56% of brands with video on the homepage actually saw shorter site visit times, fewer average pages per visit, and higher bounce rates than brands without video on their homepage.”

It may be too soon to judge whether video is the best method to achieve higher direct retail sales but companies such as ViSenze are creating technology that enables contextual advertising within a video.

On the other hand, video has been and remains one of the most effective ways to improve brand awareness and educate consumers. Just think of the heart-tugging Amazon Mother’s Day videos.