More brands in Southeast Asia are looking to adopt “dot com” strategies for a direct-to-consumer approach. Why? It allows them to establish a stronger brand identity, customize a more personable online experience and obtain customer data to keep optimizing their ecommerce cycle.
But it’s not cheap to build a website and with so many software options on the market, how can a brand that is only beginning to go online make an informed decision? The right technology allows scalability whereas the wrong one will require more maintenance sucking both time and money.
eIQ sits down with Mandy Arbilo, Senior Project Manager at aCommerce, Southeast Asia’s leading ecommerce service provider, to discuss what brands should take into account when choosing between the two most popular platforms currently on the market, Magento and Commerce Cloud (previously Demandware).
Both enable medium to large brands and retailers to sell products online, but which one is the right fit for your company?
Suitable For: Small-Medium sized business (with GMV of $0-20 million) to global brands, used by Nike and Thai fashion brand CPS Chaps
- Magento Community is the free basic version and open-source, pay only for “extensions” (more on this later)
- Magento Enterprise starts at $20,000 annual fee (includes abandon cart feature and support)
- Compare the two more in-depth here
Estimated Budget: $20,000 – $250,000 depending on added features
Time to Build a Fully Functional Site: 2 to 4 months
Why should you consider Magento?
Magento’s software, both Community and Enterprise, is a cost effective solution for brands that want to test their traction online before spending more dollars on a website with all the bells and whistles.
For smaller scale brands, they will most likely use Magento Community as it requires little maintenance and is the most basic and budget friendly software currently on the market. Theoretically, Magento can accommodate millions of SKUs ,but the software is not optimized enough to handle that much. The more complex your site becomes, the more resources it will require for Magento to maintain an appropriate level of site performance.
The two programs are fundamentally similar with the key difference being the $20,000 annual fee. Another key difference is security – Community does not have highly secure payment bridges whereas the Enterprise version does.
But extensions make a huge difference to what your site will be able to do, regardless of the version.
This is what Magento’s core architecture looks like:
If a brand wants to collect a database of customers through a signup on its website, the default criteria would be: name, email address and home address. Adding an extension to the core architecture will allow brands to target a specific audience and create personalized marketing campaigns such as birthday discounts or Facebook re-targeting.
Key functions & features
- Magento Marketplace: 7,500+ extensions that allow brands to enhance the site with i.e. blog section, flash sales tool, product zoom feature, etc. The price of an extension can range from $0 to $20, and over $200
- API integration: Magento allows brands to use API to perform a number of tasks such as integration with the content management system (CMS), customer relationship management system (CRM) or mobile apps
- Themes: Magento allows brands to install design layouts to the website without altering the core code files section that could cause errors
- Centralized management: Magento allows brands to run multiple stores with one back-end system. This means that a company can have three brand sites and manage all customers, products and categories from one platform
- Pricing system: Magento allows for flexible pricing options that can be used as marketing schemes i.e. buy item #1 and get 50% discount with free shipping, etc.
What are extensions?
Extensions can be likened to apps on Apple’s iTunes store. When you have an iPhone, the basic core such as “notes, contacts, camera” are pre-installed. A user usually wants to install extra features to supplement the core offerings to turn their iPhone into for example, a sleep tracker. Extensions have been used by the following companies:
Some free recommended extensions for brands on Magento are Shipworks, a function that tracks order status and currently is being used by carriers such as DHL and FedEx and Yotpo for a reviews feature.
Suitable For: Bigger brands that want to expand their online presence to other countries. Ex. Adidas GMV of 10-500 million
Estimated Budget: $250,000 – 600,000 annual fee
Time to Build a Fully Functional Site: 6 to 8 months
Why should you consider Commerce Cloud?
Commerce Cloud is known for its security and reliability, which is partly why the software is not as flexible when it comes to customization. A brand that is using the Commerce Cloud is investing in a long term ecommerce strategy and should have a 10 year plan for the brand’s online visibility, partly because of the software’s price but also because a cloud system allows you to scale without much storage restriction.
For example, global brands such as Clarins launched an online website in China and Japan with Commerce Cloud.
This is what Cloud Commerce’s core architecture looks like:
Commerce Cloud is fully hosted, which means that the task of hosting its services and maintenance is handled by the company and not the brands using it. But then users cannot modify the core structure to the extent that they can with Magento.
Key functions & features
- Commerce Cloud Marketplace: A one-stop shop like the Magento Marketplace where users can go to purchase website extensions
- API integration: Tightly integrated system that allows brands to sell across multiple websites with one backend
- Centralized management: Can link channels from mobile to website together to simplify operations, sales and fulfilment. This function is also available with Magento Enterprise but Commerce Cloud handles the development and integration
- Flexible shopping options for customer: The software lets brands offer in-store pickup, ship from store, etc. All included in the price as opposed to purchasing additional extensions for Magento.
- Cloud integration: Commerce Cloud can integrate with the company’s offline stores. Store associates can show shoppers the inventory across all the brand’s stores. An advanced predictive intelligence feature provides insights on ‘total’ customers and ‘little data’ for an individual customer so brands can hyper-personalize campaigns.
The choice between Magento and Commerce Cloud comes down to three key factors: budget, scalability and brand positioning. For brands testing the market at a small scale and require more customization and control, Magento is better suited as a kickstarter ecommerce software.
If a brand is growing rapidly with clear expansion goals in mind and high SKUs, they should consider using Commerce Cloud as there will be very little maintenance required so the company can focus on growing in multiple markets.
Unsurprisingly, the right software is essential to a successful online strategy. Find out more about aCommerce web development here.