Lazada generated $250 million in GMV for its annual 12.12 Online Revolution campaign, effectively doubling the results of 11.11 Single’s Day a month earlier ($123 million GMV). The company’s latest success is seen as affirmation for the ecommerce potential in the region or “a major highlight of consumption growth”, especially for the 3,000 brands selling on the platform.

End year sales mean greater discounts and a common route taken by most brands to increase sales and conversions. However, data analytics platform BrandIQ found some brands from the ‘Baby & Kid’ category on Lazada Indonesia actually took a different approach for the region’s biggest online shopping event.

Six popular baby food brands in this category actually lowered their discounts on the site five days before 12.12, meaning the product was actually more expensive during 12.12 than previous periods.

Some lowered theirs as close as a day before the sales event such as Dancow, a milk brand for children from Nestle, that decreased the discount percentage percent discount on its products by almost 14%.

And they weren’t the only brand that adopted this pricing strategy, the brand Cerelac also decreased discounts even more from 8.52% off to only 5.2% off on average.

Other brands such as Nutren and Nutrilon maintained a relatively stable discount strategy during the sales period.

Only two out of six baby food brands actually increased their discount during the 12.12 campaign

This behavior begs the question, why are certain brands countering the entire concept of a sales campaign by offering more expensive products?

The most likely reason is that these brands see the event as an opportunity to increase margins by leveraging the high traffic flowing into the marketplace with the hype and marketing efforts surrounding the shopping event.

Given that baby food is a relatively price inelastic product, meaning that demand is unaffected by price as babies need to eat, these brands have more leeway with not participating much in the discounts party but still reap the benefit from the online sales.

What does this mean for brands?

Brands entering the online space are often plagued by the pressure to enter price wars to win market share. This means lowering prices is almost a must for brands, especially during the sales period.

It was reported a few years ago that merchants on Tmall in China said that if they don’t price products lower than in stores on rival sites, Alibaba pushes them down their ranks, effectively limiting their access to hundreds of millions of potential customers. Alibaba didn’t comment.

However, as shown by the data above,

Brands can actually avoid price wars and hits to margins by understanding the nature of their product.

These two different strategies highlight an important lesson for companies during promotional periods, while most ecommerce players utilize heavy discounts to maximize sales, revenue can also be made by doing the opposite and lowering discounts.


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

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?

Seeing as the sun is always shining in Southeast Asia, sunglasses are a popular item that never go out of style, especially in the Philippines. The market is lauded as the fastest growing market in the region for luxury sunglasses brand Oakley as said by Andrew McMahon, former retail manager for Oakley Southeast Asia.

To feed consumer demand, the brand utilizes online channels, in particular, an official store on Lazada to sell to the growing middle class, who is also increasingly tech-savvy. Analytics platform BrandIQ takes a look at the sentiments surrounding Oakley’s products.

Oakley Lazada Philippines

Oakley official store on Lazada Philippines.

Launched almost a year ago, Oakley shop-in-shop (SiS) on Lazada Philippines leaves a good impression for the Filipino customers as witnessed by a 83% positive seller rating provided by customers.

Oakley got a good review rated by the customers on Lazada Philippines

Taking a look at all Oakley sunglasses/products across Lazada Philippines, BrandIQ found that they generate 70% of positive sentiments from the Filipino customers on Lazada Philippines, with ‘authentic’ and ‘fast delivery’ being the keywords that most often appeared in product reviews.

Simultaneously, ‘fake’ is the most common keyword that appeared most often in reviews with negative sentiments as grey sellers are abundant on the marketplace.

Oakley Lazada Philippines

The sentiments show that for customers shopping for higher-end brands, authenticity is more important than a low price — giving brands an advantage competing with grey sellers when they open online.

Discount season generated more reviews

During the build-up to the 11.11 last month, the average discount for Oakley sunglasses on Lazada Philippines increased by 35% on November 9, compared to the week before, and stayed the same until the end of the campaign.

Oakley Lazada Philippines

Sellers for Oakley (Philippines) starts the Online Revolution discounts on November 9. Source: BrandIQ

Although the discounts during this period only increased slightly by approximately 7%, the hype and ergo, traffic, to the website resulted in double the product reviews for Oakley sunglasses post campaign.

For brands attempting to boost ranks in search results on a marketplace, offering special incentives such as high discounts will encourage customers to leave product reviews and increase relevancy of the product.

Oakley Lazada Philippines

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

Cosmetics and beauty products have always performed best online, especially given recent 11.11 performance.

To grab growing momentum online, more brands are releasing new product lines through ecommerce. Lip Lingerie is the latest range of liquid lipsticks from American cosmetics brand NYX.

Originally offering 12 shades of nude colors when it was released last year, the brand has since added an additional 12.

NYX Lip Lingerie Lazada

Lip Lingerie complete color variants on the landing page of NYX’s global website

On Lazada Thailand, where NYX sell its products through official shop-in-shop NYX Professional Makeup, search results from product keywords ‘NYX Lip Lingerie’ results in 683 SKUs, the majority made from unofficial sellers.

What would make the consumer choose one product over the other given they are the same?

Apart from customer ratings and seller reputation, price has always been a strong factor in purchasing decisions.

Using data platform BrandIQ, we compared the selling price (price after discount) for Lip Lingerie items from the top five sellers on Lazada Thailand, including NYX’s own SiS.

From the analysis, the listing price – the price before discount – ranges from 325 THB to 590 THB; the lowest selling item provided by NYX Professional Makeup store itself.

However, when it comes to the selling price, the cheapest is provided by a third-party seller Tohkrengpang Shop.

Among the top five sellers, Tohkrengpang Shop has the second highest listed price (530 THB), but with 53% discount that it offers, the selling price for NYX Lip Lingerie on the store fell to 250 THB.

NYX Lip Lingerie Lazada

Seller Tohkrengpang Shop offers the highest discount and the lowest price for NYX Lip Lingerie.

Discounts offered by the third-party sellers range from 11% – 53% of the listed price. NYX Professional Makeup is the only seller that doesn’t offer any discount for the product, elevating its price to the middle among the other top sellers.

Why does NYX not offer discounts? According to Small Business Chron, consumers tend to associate low price with low quality, particularly when the brand name is not familiar.

Low prices may drive sales for a limited time, but do not build customer loyalty.

Seems like NYX is playing the long term game.

NYX Lip Lingerie Lazada

NYX Official Store is the only one that doesn’t display a discount on the product.

Download the infographic here.


HOW IS YOUR BRAND PERFORMING IN SOUTHEAST ASIA’S TOP MARKETPLACE?

*Introducing the eIQ BrandData series that shares insights to different brand strategies online and how they’re performing on marketplaces across Southeast Asia in collaboration with data tool BrandIQ.

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A peek into Thai customers’ sentiment for BabyLove

Using data tool BrandIQ, a total of 4,958 product reviews from customers that purchased BabyLove products on Lazada Thailand were analyzed. The sentiments of the reviews were divided into two: Positive and Negative, based on keywords like ใช้งานดี (good quality), รอนานมาก (slow delivery), ถูก (cheap), identified in the review.

For BabyLove products, out of 175 keywords picked from reviews, 136 or 77.71% of them are positive.

BabyLove review

Overall sentiment for BabyLove products on Lazada is positive

The keyword “ส่งเร็ว” (meaning fast delivery) appeared the most in the reviews with a positive sentiment, appearing 1,528 times in 1,522 BabyLove product reviews.

The second top keyword “ถูก” (meaning cheap) had 776 appearances. The third positive keyword “ใช้งานดี” (meaning good quality) appeared 430 times.

Below is an example of a BabyLove product review with positive sentiments:

BabyLove review

A consumer review with high rating for delivery and product quality. [Translation: The delivery was fast and the product quality is good. As a mom, I’m very happy.]

Meanwhile, keywords with bad sentiments made up 22.29% of total keywords. Some of the keywords are ห่วยมาก (bad), แย่มาก (sucks), and รอนานมาก (slow delivery). Overall, customers using these keywords are talking about the pain points of ordering the products on Lazada rather than the quality of the product.

One example of a review with bad sentiment is:

BabyLove review

A consumer review with low rating caused by stock discrepancy.
[Translation: I’ve ordered it from Lazada 4 days ago, turned out it’s out of stock? How can something that I’ve already ordered (when it’s available) went out of stock? This sucks. And the delivery is also slow. It’s very bad.]

Controlling customer sentiments

The top two factors that greatly affect the sentiments felt by the BabyLove’s customers when they make a purchase on Lazada are delivery time and price. They are things that a brand can control by having an official presence on the marketplace.

On its official store, BabyLove offers an average discount of 26% and drowns out grey market sellers on the marketplace.

Its products are also fulfilled and delivered by Lazada, which typically means faster delivery times.

BabyLove review

BabyLove’s products on its official store on Lazada Thailand are fulfilled by Lazada

Download the full infographic here.


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

*Introducing the eIQ BrandData series that shares insights to different brand strategies online and how they’re performing on marketplaces across Southeast Asia in collaboration with data tool BrandIQ.

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Electronics is one of the top performing categories online in Southeast Asia, especially during the holiday sales festival period when pricier items are discounted.

The BrandData series this week takes a look at the top two electronic brands on Lazada Indonesia in the Laptop category – Asus and Acer – both of which have an official shop-in-shop on the marketplace.

The performance was measured based on each brand’s search rank for the top five most popular generic keywords for Laptop discovery (according to Google Keyword Planner). The keywords are:

  • Laptop
  • Gaming laptop
  • 2 in 1 laptop
  • Laptop Umum (General Laptop)
  • Laptop Travel

If a browser uses the above keywords to search on a marketplace, products from Asus dominate four out of the five queries and account for the majority of the top 10 results.

Laptop brands Lazada

Asus products came out as #1 in the search result of the top five keywords for Laptop category on Lazada Indonesia. Source: BrandIQ

What does this mean?

Although both brands have an official shop-in-shop on Lazada Indonesia, Asus may have the advantage over Acer by listing a wider product offering online.

On its official store, Asus offers 66 SKUs consisting of 45 laptops and 21 smartphones, while Acer only has 8 products listed on its official store.

Even by taking into account the numerous unofficial merchants on Lazada that sell Asus/Acer products, which brings the total number of products to 2,000 and 1,300 for Asus and Acer respectively, offerings from Asus are still almost double that of its competitor.

And this discrepancy might be the reason why Asus products rank better on Lazada.

Laptop brands Lazada

Why does it matter?

Brand performance on marketplace search ranks is important because almost 57% of Indonesians bypass search engines like Google to go directly to marketplaces to begin their product journey online.

Online Consumer Indonesia


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