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Given the proximity of Southeast Asia’s markets, consumer behavior and preferences across the region are expected to be relatively similar but brands present in multiple markets can contest that there are several differences between the countries. It behooves brands to prioritize customer feedback.

As there is no perfect product, there are hundreds and thousands of good and bad reviews floating around the web and its important to not weigh them equally. To add value to customers and merchants, online platforms like Lazada mark quality reviews with a badge to verify the purchase of the item by the user.

Reviewer with a purchase history of the SKU is verified on Lazada and identified with a badge. Source: Lazada Indonesia.

Top: Fully recommended! I’ve been using hyper glossy for over four years, there’s nothing as comfortable as this one, even though I have tried using other eyeliner products from Maybelline or other brands, I’m still loyal to this one. Very waterproof, long lasting. By the way, the packaging is very safe, tidy with layered bubble wrap and fast delivery. I’m very satisfied with the service from Maybelline Indonesia.

Bottom: Satisfied. The eyeliner was delivered yesterday, 3-days delivery. Good waterproof eyeliner, people who said it [the product] is small probably never bought Maybelline eyeliner before. It’s small but it could last five months.

Data-analytics platform BrandIQ compares feedback habits of customers on Lazada Indonesia and Lazada Thailand for brands in the Beauty & Health category to understand which markets are more satisfied with the same products.

Beauty shoppers Indonesia Thailand

Customers on Lazada Indonesia leave more than three times the number of reciews on the platform than customers on Lazada Thailand.

Not only did BrandIQ find that Lazada Indonesia had more than three times the number of reviews on Lazada Thailand in the Beauty & Health category, there were also more verified reviews.

The number becomes even more interesting when factoring in total SKUs on Lazada Thailand is two times more than on Lazada Indonesia, 2,136,259 and 1,278,324 respectively (as per January 11).

Looking at the reviews for four beauty brands with presence on both Lazada Indonesia and Lazada Thailand — L’Oreal Paris, Maybelline, Garnier, and Nivea — showed that although Thais left less reviews, they reported more positive things about their purchase than Indonesians.

By filtering for positive keywords such as ‘good’, ‘fabulous’, ‘amazing’, and negative keywords like ‘bad’ and ‘terrible’, BrandIQ is able to determine the overall customer sentiment for a brand’s products on a marketplace.

One keyword that appears most often on Lazada Thailand is ‘สีสวย’ or ‘nice color’, appearing in 12.47% out of all the Beauty and Health category reviews.

While on Lazada Indonesia, keywords like ‘tidak sesuai’ or ‘doesn’t fit’ showed up the most in reviews with negative sentiment in the same category.

Beauty shoppers Indonesia Thailand

Reviews from Maybelline customers in Lazada Thailand and Indonesia with the most popular keywords for each sentiments respectively.

Top: Nice color. The color is long lasting, nice color, and it’s 50% off! Super awesome.

Bottom: Two stars. Good product, only the color doesn’t look like the picture.

What does this mean for brands?

Although all customer feedback is important for brands, the ability to distinguish verified reviewers – those who have purchased – over random or spam users will give companies a more credible overview of how well received their products are in different markets.

Using Maybelline reviews as an example, Indonesians tend to leave more product reviews and appear less satisfied than their Thai counterparts, making it beneficial for Maybelline to either modify their product selection and/or address the complaints.


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

Consumers around the world like a good bargain, but in Southeast Asia and particularly in the Philippines, companies are entering price ways to win customers and gain loyalty. As beauty and personal care in The Philippines is expected to increase by 3% CAGR in the next five years, the sector is preparing to capture the advances in disposable income through campaigns promoting a comfortable and better lifestyle.

Social media has not only provided a channel for brands to reach a younger audience but has also increased the sophistication of beauty product buyers as they are exposed to global trends and products advertised on Instagram and Facebook content.

The influence of global brands have an advantage here as their established names are very much highly regarded by locals as they are correlated with a more upscale look and feel in developing economies.

For beauty brands looking to build a bridge to millennials, digital integration is not only recommended but necessary.

In 2016, the rise of e-retailers such as Sephora online, Zalora, GlamourBox and BeautyBar Philippines encouraged major brands to jump online. An example is Avon Cosmetics’ change in distribution after launching on Zalora last year; the company previously sold only direct to consumer (MLM) exclusively through offline sales representatives.

Avon shop-in-shop on Zalora PH

GlamourBox PH is a multi-brand marketplace

Brands are also selling on beauty specific marketplaces such as GlamourBox and taking a lesser approach to their own branded site in The Philippines. The ability to buy makeup from multiple retailers is nurturing ecommerce behavior in the country.

Imagine is a shopper lands on MAC cosmetics Philippines website – it isn’t equipped for ecommerce, merely a catalogue – and how frustrated they will feel when they learn that ordering online isn’t possible.

MAC Philippines’ website directs consumers to an offline store, not an online checkout

As price consciousness in the Philippines is still a major factor in any type of purchasing, Euromonitor notes that global brands can leverage their own web stores to implement an installment payment scheme as it attracts consumers who refrain from buying at offline store retailers because they automatically need to pay for the items in full.

Beauty is undeniably a big industry but within the sector, the hundreds of well-loved brands are owned by only seven global conglomerates. These household names range from Unilever, L’Oréal to Estée Lauder.

The 182 beauty companies contribute heavily to a beauty market worth $63 billion in the US alone and responsible for shaping consumer ideas about modern day beauty. The US and China alone will account for 54% of the premium beauty segment by 2021.

The chart, illustrated by Business Insider, shows how interconnected beauty brands really are and which houses are most prominent. Below are a few that stand out:

L’Oréal’s footprint

L’Oréal had the most brands on this list – a total of 39 beauty brands ranging from Maybelline to Kiehl’s.

It was estimated that L’Oréal made $27.6 billion in annual beauty sales in 2016. What factors attribute to its success? The company’s ecommerce sales rose by 33% year on year in 2016 and 30% of its media spend was on digital.

For the company, ecommerce isn’t only a peripheral revenue stream, but the new growth engine.

La Roche Posay, a skincare brand under L’Oréal, also has a marketplace presence in Thailand through a flagship shop-in-shop on Lazada.

La Roche Posay flagship store, Thailand

Beyond Thailand, Johnson & Johnson in the Philippines recently launched an official flagship store for its brands, Aveeno and Neutrogena, on Lazada to take advantage of the marketplace’s high traffic.

“Ecommerce isn’t the cherry on the cake, it becomes the new cake,” says Jean-Paul Agon, CEO of L’Oreal Group.

Selling online also helps L’Oreal cut costs,

“With traditional channels, there’s counters, samples and purity materials, when we do ecommerce, the cost is lower,” says Agon.

Unilever’s footprint

Unilever has 38 sub-brands under its management, and many are drugstore staples such as Vaseline and Sunsilk. The company reportedly made $22.3 billion from beauty sales last year.

The FMCG giant announced a partnership with Lazada earlier this year to collaborate on supply chain, fulfillment, data, marketing and social commerce. As Lazada saw a 181% growth surge in one year in its FMCG category, Unilever is looking to grab a large piece of the pie.

Unilever’s digital strategy in Southeast Asia reflects the company’s global ambitions,

“It’s important to change business models, to be inspired by startups, because the model of the past is not the model of the future,” says Keith Weed, CMO of Unilever Global.

Unilever Thailand unveiled a flagship store on Lazada earlier this year, selling ten of its most popular brands on the marketplace.

Unilever, Lazada Thailand

Johnson & Johnson’s footprint

Johnson & Johnson is responsible for nine beauty brands on the list – relatively small compared to the others but what it lacks in quantity, it’s well-known brands make up in popularity among users. Aveeno and Neutrogena are household staples for body and hair care.

The J&J brands can easily be found on the shelf of US drugstore chains such as Rite Aid, and as equally easily across the globe in a department store in Singapore or Bangkok. Offline footprint aside, consumers can also find a lot of these brands online – especially in China.

“Ecommerce is becoming a strategic imperative to winning baby,” says Christina Lu, VP Marketing for consumer personal care, Johnson & Johnson. In China, 15% of baby skincare sales come from ecommerce.

The group is also doubling down on an online strategy in Southeast Asia.

Aveeno flagship store, Lazada Philippines

Estée Lauder’s footprint

The company has reached $1 billion mark in yearly ecommerce sales, with online being Estée Lauder’s fastest growth channel.

“New experiences and innovative high quality products and services, which will encompass digital marketing, disruptive in-store merchandising, compelling creativity and omni-channel offerings is a priority for enhancing the customer engagement experience,” says Fabrizio Freda, CEO of Estée Lauder.

Brands under Estée Lauder, such as Bobbi Brown and MAC leverage from being global powerhouses, and solidify their presence in countries such as Thailand by launching brand.com.

Bobbi Brown Thailand

Why are these beauty brands so successful?

In 2016, global brands such as Unilever, Procter & Gamble and L’Oréal maintained a strong foothold in Thailand even as the market saw a rise in local beauty brands. According to Euromonitor, beauty brands have experienced a faster growth rate in 2016 because of aggressive digital marketing strategies via: 

  • Online content
  • Different purchasing incentives such as click-and-collect
  • Free delivery with online purchases.

What this research shows is the importance of a digital strategy – not many brands have the capability of breaking into markets without a long term online play.

Interested in reading more on beauty? Check out eIQ’s BeautyIQ Series, where we cover different aspects of building a successful beauty brand in a digital age.

The original infographic was published on Business Insider, access the article here.