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Customer support plays an integral role in delivering an enjoyable online shopping experience. Your online store could be optimized with tips from beautyIQ series, but a poor customer experience will drive 89% of consumers to go to a competitor. The last article of the beautyIQ series will provide guidance on how to best support your Southeast Asian customers online and keep them loyal to your brand.

The importance of customer service seems obvious in traditional brick-and-mortar shops – your salesmen on the floor represent your brand’s image and values through interactions with customers. This is especially true in Thailand and China where shoppers rate customer service as one of the most important factors driving their favorite retailer perception.

For ecommerce, customer care is more integral to the experience as shoppers lack the touch and feel of a product and convenience of a friendly salesperson ready to address any questions. Customer support is also important to containing the damage of a negative review spreading on social media, where more than 50% of consumers in Southeast Asia turn to read product reviews.

Providing excellent customer support can be the make or break of a company as demonstrated by Zappos.com, an online shoes, clothing and accessories store owned by Amazon. Just this July, the company set a new internal record with a customer-service call that lasted 10 hours and 43 minutes. It is stories like these that keep Zappos in the online shopping spotlight and customers coming back.

To be as accessible as possible for online shoppers, brands and merchants should ensure the following:

1. Make Customer Service Contacts Visible

45% of respondents to PwC retail study say reviews, comments and feedback found on social media influence their shopping behavior. This means it is extremely important to quickly diffuse a frustrated customer as they are more likely to turn to social media and post a negative comment regarding your brand.

Mitigate this situation by making your phone number or other contacts highly visible to increase trust in your online store and give browsers a ‘shopping safety net’.

Bobbi Brown’s online store in Thailand lists a live chat button at the top of its webstore and uses large icons for email, chat and phone communication at the bottom of the page, leaving no questions where customers should turn for answers.

customer support

customer support

 

Clinique also lists customer service contacts at the top of its webstore under ‘Help’, which is easy to see and comprehend.

customer support

2. Support Customers on Channels They Use

As internet users spend from 1.6 hours in Singapore to 3.7 hours in Philippines on social media every day, consumers in Southeast Asia show a stronger desire to communicate with brands through social media than consumers elsewhere in the world.

Facebook is the most popular social media network and a quick look at local pages of popular beauty brands show that customers don’t hesitate to express their positive and negative experience online. Developing a capability to respond to customer reviews online will help brands improve their relationship with customers.

In Thailand, global beauty brands state on their local brand.com webstores (Bobbi Brown, Kiehl’s, Estee Lauder, MAC Cosmetics, Clinique, L’Occitane and Laura Mercier) that they mostly provide customer support either by phone on weekdays from 9 AM to 6 PM or email.

Bobbi Brown is the only brand that offers a live chat on weekdays, while Laura Mercier has official account in LINE, one of the most popular chat apps in Southeast Asia. All brands mentioned engage with customers and their inquiries on social media channels like Facebook and Instagram, but the response time varies.

3. Train Customer Service Agents to Listen, Reply and Execute

“I want it all, I want it all, I want it all, and I want it now,” sings rockband Queen, and it sums up quite well the expectations of customers nowadays. Every third customer who has attempted to contact a brand for customer support through social media expected a response within 30 minutes. Research shows that customers even value a quick response over a more informative one.

To track your customer inquiries, use software like Zendesk, as used by Lazada, one of the biggest marketplaces in the region. Keeping track of customer inquiries is important to calculate customer response time and ensure customers who have turned for support have actually received it.

Having knowledgeable customer service agents who are familiar with product properties, brand policies and other issues will speed up time taken to reply to customers and positively impact the chance of a returning shopper. ecommerceIQ sent inquiries to the above mentioned global beauty brands and they all responded within 24 hours.

Customer complaints may not be the most pleasant thing to handle, but it is the best feedback a business can receive as it highlights holes in its business model. Internal data from aCommerce, service provider for ecommerce fulfillment in Southeast Asia, shows that concern about expiry date of skincare or cosmetics products are among the most common complaints in Thailand. Shoppers may ask for a refund or return the product if, for example, two years have passed since the manufacturing date.

It is the responsibility of customer service agents to communicate these problems to the right departments and ensure the same issues do not arise again.

Customer care is the key factor impacting consumer trust – not surprisingly a good customer experience will bring shoppers back for more, while bad support will drive them away. With the widespread usage of social networks in Southeast Asia and across the world, word of mouth has never traveled faster. 47% of digital consumers in Southeast Asia inevitably go online to share their experience, which will impact decisions of other potential customers for buying online.

With this article beautyIQ series finishes. We hope you found the tips useful in creating an enjoyable online shopping experience for your customers. You can read all articles on ecommerceIQ.  

For more insights about ecommerce trends in Southeast Asia, visit the report section on  ecommerceIQ.

 

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ

 

We’d love to hear your feedback,

find us on Facebook, LinkedIn or Twitter.

 

Asia’s mobile phone penetration matched with the high popularity of social networks has paved the way for social commerce to flourish in Southeast Asia. More and more online shoppers are using social media channels like Facebook and Instagram to browse and to negotiate a purchase of beauty products, apparel and other goods instead of buying it on typical ecommerce websites.

Thailand is the world’s biggest social commerce market where 51% of online shoppers have purchased goods directly via a social media channel.

Social commerce has been practiced by every third online shopper in Malaysia and Indonesia, while globally around 16% of online buyers have shopped directly via social media.

Across the region, Facebook and Instagram are among the most popular networks and on average, internet users spend from 1.6 hours in Singapore to 3.7 hours in Philippines on social media every day. This, the fact that Southeast Asians are reluctant to share their financial information online and less than 20% of population (except Singapore) use either debit or credit card to make payments drive social commerce in Southeast Asia.

How Social Commerce Works in Thailand

Usually merchants set up ‘shops’ on Facebook or Instagram, or both, and post images and details of goods for sale. Potential shoppers can browse and inquire about product availability and arrange a method of payment, typically a bank transfer, through a popular chat app such as LINE.

In social commerce, the order is usually made online while the payment – offline.

Social media ‘shops’ offer nearly anything from food, beauty and health products of various brands to apparel and accessories, sometimes secondhand or with minor defects. 

How Big is Social Commerce in Thailand?

The consumer-to-consumer (C2C) market size in Thailand is significant. Page365, a startup that helps small retailers sell products via social media, estimated that social commerce is worth more than $500 million per year in the Land of Smiles alone. However, it is difficult to accurately measure the market size as majority of sales from social media are conducted via bank transfer and merchants refrain from disclosing their real revenues.

ecommerceIQ decided to test one of several popular forums where shoppers frequently discuss favored and reliable Instagram/Facebook stores for makeup. The team chose an Instagram makeup shop by user @lachompshop due to popular word of mouth and recommendations on Pantip forum.

Case Study: The Social Commerce Journey

The search for products takes place by scrolling through @lachompshop picture gallery on Instagram. ecommerceIQ decided to purchase a MAC lipstick, which surprisingly was selling for 550 Thai baht, 300 Thai baht cheaper than in MAC’s official online store.

social commerce

social commerce

On social commerce shops products usually are browsed by simply scrolling through the seller’s Instagram picture gallery.

social commerce

A lipstick on MAC’s official online store costs 850 Thai baht while @lachompshop offered to sell it for 550 Thai baht.

The seller indicated her LINE account in the Instagram ‘About Me’ section so she could be easily reached for further product inquiries. The seller replied on LINE within one minute of the team’s question and confirmed product availability with a screenshot of the product from her Instagram page. The exchange was short – the seller noted delivery would take 3 days and after the team negotiated for express delivery in 2 days at no additional charge, she outlined more details – payment had to be made before shipping of product.

The seller sent her bank details so that 600 Thai baht (included 50 baht delivery cost) could be transferred to her account. The entire purchase process was simple – a short exchange on the chat app with a following bank transfer compared to filling online forms, payment card details, when buying online.

social commerce

The exchange with the seller took place on March 29, 2016.

social commerce

MAC lipstick that was ordered by ecommerceIQ team

Once the transfer was made, the transaction could not be cancelled. After the payment was done, the seller followed up in LINE with a tracking number from Thai Post so delivery could be followed online.

The MAC lipstick arrived in a brown package, sealed with a protective clear tape, and actually even a day earlier than expected. The delivery time in the end was just 1 day compared to 2-5 days waiting for products bought online from brand.com store or marketplace.  The product was in perfect condition in terms of exterior, in the original MAC packaging and was the right color. However, the lipstick texture was slightly smudged, possibly due to the heat during delivery. There was no pre-delivery text or call as would be in a typical ecommerce purchase.

social commerce

The new lipstick was delivered before expected for a nice surprise after agreeing on the purchase via Instagram shop.

Once the seller was notified of the product arrival, she responded politely within 5 minutes adding an element of personalized contact to make the experience more positive.

The Good and the Bad of Social Commerce

Facebook and Instagram provides an inexpensive opportunity for upcoming, small brands to sell online at a lower cost compared to creating a full-fledged webstore. The direct communication with sellers also adds a personal touch, which Southeast Asian shoppers find important to gain trust in the seller, the brand or product.

However, the same trust with regards to product authenticity and payment is also a concern when buying from sellers who stock various products on C2C platforms. Data from Page365 shows that 74% of consumers are reluctant to shop online because they fear fraud and 33% of consumers have complained about product imperfections when ordering from Facebook stores. There have been cases reported when the customer transfers money to a seller via bank transfer prior to a product delivery just to find out later that the seller took their payment and cut off contact.

There is also risk of receiving fake products and C2C shops are usually less willing to accept returns, as in the case with @lachompshop who explicitly stated that unless the product was damaged or delivered in the wrong color, returns nor refunds would be accepted.

Yet, for many, especially in provinces where malls are not easily accessible, social commerce is an easier way to get products they want without having to shop online and without having a credit card. Although it does takeaway from ecommerce websites, the wave of social commerce allows consumers to adopt online shopping habits and eventually encourage them to trust e-transactions. 

What to Expect Next

Seeing the popularity of social commerce, other businesses are looking for ways to enter the market. This June, Facebook started testing social commerce payments in Thailand and later decided to launch the world’s first Facebook Shop in August. LINE, which is widely used to communicate with buyers of social media shops, launched its own ecommerce app LINE Shop already in July 2014.

C2C marketplace Shopee, which is among the most popular apps in Thailand, is trying to attract merchants currently selling on social networks, to its online marketplace by offering easy integration of their Instagram shops and reimbursing shipping, cash on delivery fees to sellers.

The positive experience ecommerceIQ had testing social commerce shows why for many it may be more convenient to shop via social networks than overcome concerns about the security of digital payments to shop online even if it means a few added small risks. 

As the ecommerce market size in Southeast Asia is expected to increase nearly 15 times to $88 billion by 2025, social commerce will likely grow as well thanks to a relatively low online presence of Western brands

 

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ

 

We’d love to hear your feedback,

find us on Facebook, LinkedIn or Twitter.

Up until this point, we’ve covered driving traffic to your online store, where to best sell your products and the type of content that increases conversions. Now we will be sharing a few tricks to make it easy for store visitors to complete their purchase, something commonly overlooked. From the checkout process to receiving the package, in this article we discuss how to decrease cart abandon rates and last mile best practices.

55% of consumers surveyed by PwC in Southeast Asia report they are shopping online monthly or more frequently, and returning customers are one of the easiest ways to grow ecommerce business. Creating a stress-free checkout process and delivering pretty package on time are vital factors to gain customer loyalty.

Once the shopper is happy with their product selection and ready to checkout, ensure the final steps in their online journey, the last mile, are hassle free. Businesses can do this by:

  • Providing easy checkout process and being transparent about any extra costs
  • Offering a ‘cash on delivery’ payment method
  • Creating the best image of your brand with smooth delivery of the product

 

Optimize your store’s checkout process

Abandoned shopping carts are the worst nightmare of online sellers as they present lost revenue. And it’s usually because every fourth customer is frustrated when there is too much information to fill upon checking out.

An overly complicated checkout form can scare off over 60% of potential buyers therefore the shorter the checkout form and the less clicks your customer has to make, the more likely that she or he will finish the purchase.

For example, Estée Lauder’s checkout form of its Thailand webstore is rather long. It requires, first, user registration and, second, to fill in a separate line each item of the address, eg. house number, alley, road, district, county, instead of using a text field for the user to enter everything at one go. This probably makes it easier for the brand to process data in the backend, but doesn’t make for a great user experience.

last mile delivery

last mile delivery

Checkout form of the Estée Lauder online store in Thailand is quite lengthy.

To checkout from Kiehl’s Indonesia webstore customer first has the pleasant task to choose free samples. But after that she or he is directed to sign in or register an account, then has to look again for the shopping cart and gets to fill the checkout form only after a few more clicks.

In both cases, customer at some point may feel impatient or confused and such experience may reduce conversion rates.

To best capture your shopper’s purchase, offer a guest checkout option and create a simple, one-page checkout form asking the buyer to fill only the necessary information – name, address, phone number and payment details. Do you really need to know your customer’s birthday adding one more line to fill during the checkout?

Be sure to offer various payment options based on the preferences of your target audience and show that you are serious about the security of the payment displaying secure payment gateway branding such as SSL (Secure Sockets Layer) certificates.

With a total of 5 clicks from landing to checkout to submitting your order, Maybelline Thailand is a good example of how to simplify the checkout process. While it requires a registration, it is very simple and quick, and the checkout form is just one-page.

last mile delivery

Maybelline Thailand store has created simple one-page checkout.

To avoid abandoned carts, brands should be transparent about the costs that the buyer might incur in addition to the product price. Around every fourth customer drops the purchase because of unexpected shipping costs and 45% of customers tend to add products to their cart without intent to buy in order to check the final price.

Show all the additional costs that the customer might have to pay or highlight free shipping with minimum purchase value – around 24% are more likely to spend more to be eligible for free delivery.

Prioritize cash on delivery as payment method

In Southeast Asia, cash is the preferred payment method for the majority of customers – in Thailand 83% of them would prefer to pay with cash on delivery, in Malaysia – 82%, in Singapore – 72%. Less than 10% of the population in Thailand, Indonesia and Vietnam and less than 20% in Philippines and Malaysia use banking cards to pay for their purchases.

Offering cash as a payment method will increase the number of customers who want to purchase goods online as the conversion rate on cash on delivery is higher than bank transfer and bank service combined. This is due to low credit card penetration rates and high mistrust issues with entering payment information online across the Southeast Asian markets.

In Thailand, other payment methods which customers without bank accounts can use include payments over the counter in convenience stores 7-Eleven and other shops or cash deposit in a bank or ATM. However, by offering these payment methods, a merchant pushes the customer to decide twice on buying the product – first time on the webstore and second time when the person has to go to either the counter or the bank to actually make the payment. Thus, giving customers another opportunity to reconsider and cancel the purchase.

Make the delivery of the product stress-free

Delivery times, customer service, the aesthetic appeal of the packaging and even the etiquette of the messenger is a business’s final chance to leave its consumers satisfied. Yet, some brands fail to align their global image with the “last mile” delivery.

When a customer makes a purchase, she or he, of course, is interested in the particular product and will presumably make a purchase if your site is optimized but that doesn’t mean the box in which the product is sent should be neglected. The goal is to make the shopper feel like their online purchase was worth it.

In a recent study, Dotcom Distribution found that 40% of consumers are likely to make repeat purchases from an online merchant that delivers products in gift-like or premium packaging. If the delivery came in a unique package, consumers are also more likely to share it via social media. Instant free marketing!

Here are a few things to consider for special packaging:

  • Use a branded box, not just the standard brown box from the logistics provider
  • Use branded or coloured tissue paper, not hard paper to wrap product
  • Consider branded or coloured tape instead of clear tape
  • Include small gift samples to increase cross-selling
  • Protect the branded box by putting it in a standard brown box

It is extremely vital to premium brands like Bobbi Brown, Kiehl’s, Estée Lauder and MAC to provide proper packaging to protect their brand image and justify higher product costs. In Thailand, they are trailblazers as to how their products are represented when delivered.

last mile delivery

last mile delivery

Premium brands Bobbi Brown, Kiehl’s and MAC have invested in a gift-like packaging. Source: ecommerceIQ

Yet, the arrival of French brand’s L’Occitane package provided somewhat disappointment.

last mile delivery

Franch brand L’Occitane delivers products bought on its online store in standard packaging.

There comes a high cost to providing this special packaging in the right size. As it can be seen in the table below, just having a brand’s logo on the box and using a branded tissue paper can increase the packaging costs 3 to 5 times, while having the full premium branded packaging means even bigger expense.

last mile delivery

“If you have an average basket size of over 1000 THB, it makes sense to have a branded box. Even if not the case, brands should see the packaging as an extension of its marketing and pick a style that aligns with the brand’s global image, as it is the customer’s final touchpoint,” says  Phensiri Sathianvongnusar, aCommerce Thailand COO.

Take into account that shipping costs are calculated by volume metrics, not by weight. This is why it’s important to have a couple box options that are efficient for the physical average basket size of your product.

When you’ve invested your time and resources to get potential customers to visit your online store, don’t sabotage your efforts by complicating the checkout process and ignoring careless fulfillment. Provide an enjoyable purchase process experience, surprise them in a positive way with gift-like packaging, and you will win their hearts.

Southeast Asia’s ecommerce boom in the recent years has fostered the establishment of fulfillment companies who can advise your brand on the best practices. See who they are for Thailand and Indonesia.

Stay tuned for next week’s beautyIQ piece in the series!

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ



We’d love to hear your feedback,

find us on Facebook, LinkedIn or Twitter.

This article of the beautyIQ series will provide tips on how to target customers and generate demand for your products in Southeast Asia. In the previous articles, we looked at how to create engaging, localized content and where to best sell online to present your product correctly to Southeast Asian customers. Even if you have the best product in the world, it is important to get it in front of the eyes of potential customers.

The internet is full of tips on how to do automated personalized email marketing, show up at the top of Google search and run ad campaigns to lead browsers to your online store, but with such a diverse and large audience as in Southeast Asia, the general ‘spray and pray’ digital marketing strategy will not work. To make your marketing campaigns successful, the trick is to leverage on the online and shopping behavioral traits of your target audience in each Southeast Asian country.

Which channel does your target audience use for product research? Which are the most popular social media networks? Do customers use laptop or mobile to buy products online?

Southeast Asian nations are among the ones who spend the most time online. Philippines is the second country after Brazil by hours spent online daily – people aged 16 to 64 years access internet through their computers 5.2 hours and through their phones – 3.2 hours every day.

Singaporeans are the least internet active – they spend online daily “only” 4.2 hours on their PC and 2.1 hour on their phones. This provides an excellent opportunity to reach your customers through various online tools as they are connected for the most part of the day.

These are some of the habits you will want to know before moving forward with your online marketing campaign. The better you understand your customer, the more you know what they want. Many companies already sit on gold mines of unutilized consumer data – take advantage of it as well as these reports to increase the success of your digital marketing strategy.

An ecommerce marketing strategy in Southeast Asia should include the following parts:

  • Continual communication with the customer, i.e. several direct emails per month
  • “Always-on” paid search campaigns
  • Dynamic retargeting
  • Discounts and samples

 

Send Emails to Keep Communication Fresh

As 96% of online Southeast Asian consumers identify themselves as email newsletter subscribers and 48% have made a purchase as a result of a marketing email, it is the top communication channel for marketers who target their products to customers in the region.

Offer your customers a newsletter subscription pop-up with an incentive and send them emails directly (EDMs) one or two times per week depending on how many promotion campaigns you plan to run. If you offer deals more frequently, send emails more often. aCommerce internal data find that even if your offers are less frequent, sending emails accordingly to remind your subscribers about new products at least once or twice a month will still result in conversions.

Some tools to automate email marketing include: Campaign Monitor, MailChimp, Getresponse Bluecore.

Examples of beauty brands that do it correctly: Kiehl’s presents first time visitors with an email newsletter subscriber pop-up, offering free delivery and samples. Other brands may take it one step further by offering a specific incentive such as a discount off a user’s first purchase.

Premium cosmetics brand Kiehl’s motivates customers to subscribe to its newsletter with incentives. Source: Kiehl’s Thailand online store

Bobbi Brown Thailand is another brand that continuously connects with customers through emails. It lands weekly emails into subscribers’ inboxes with promotion details, a call-to-action (CTA) link on the image in the email which directs them to the Bobbi Brown website and occasionally, discount promotion codes.

Bobbi Brown offers its customers in Thailand a gift with a purchase worth 2,500 baht. Source: Bobbi Brown weekly newsletter

Once a visitor has subscribed, brands should follow up with personalized emails, which is among the most effective channels for ecommerce business to drive orders. In 2014, the average return on investment in email marketing in Britain was 38 pounds ($47) for each 1 pound spent. Yet, even smaller returns make it worth invest in email marketing.  

Building up a customer database opens the door for marketing automation and highly targeted customer acquisition and activation at scale in the future.

Keep Paid Search Campaigns “Always-On”

Search marketing is the most effective customer acquisition tactic and customers in Southeast Asia, same as elsewhere around the globe, turn to search engines when looking for information about products they want to buy. In Singapore, 67% of internet users searched online for a product or service to buy, while 48% in Thailand and 31% of Indonesia’s internet users did the same.

Google provides excellent tools for brands to appear at the top of search ranks when customers search for a product from your line. Don’t let your competitors or other distributors steal customers who look for your products – do paid search marketing. It means you bid for ad placement in a search engine’s sponsored links for keywords related to your business – your brand name, product line or generic product name you sell. Then you pay the search engine a fee for each click.

If the benefit of an online store is purchase at anytime, brands should drive traffic to their sites by keeping paid search campaigns “always-on”, especially for its own brand keyword.

For example, when searching for South Korean cosmetics brand Innisfree, the first link that appears in Thailand is a paid ad of a US online store, iHerb, which sells online Innisfree products among others. The webstore of Innisfree itself appears as the second link, which means that Innisfree is not bidding for their brand name and may lose potential customers.

Source: Google search results page for South Korean cosmetics brand Innisfree

Kiehl’s, Maybelline and Estée Lauder, on the other hand, are brands that run “always-on” campaigns. Keyword search for Kiehl’s brings the brand’s ecommerce site the first on the search engine result page, ahead of other online shops who also sell Kiehl’s products in Thailand and bid on the same keyword. This allows Kiehl’s to acquire high value customers through its brand keyword searches and control the customer experience end-to-end.

Source: Google search results page for premium cosmetics brand Kiehl’s

The average cost-per-click (CPC) for your own brand name is very low as Google gives brands and their landing pages a higher Quality Score, and the more people click on it, the more relevant it becomes and the cheaper it will cost for the brand. There should be no excuse for not bidding on your brand name all year round, even if it is just to protect the brand against competitors.

If you register on Google Adwords, you will be able to estimate how much bidding on your brand name as well as other keywords would cost. Google will provide you with suggestions what other keywords you may want to bid to get seen on the search engine’s result page. For a new brand in the cosmetics industry the minimum recommended amount to spend on paid search advertising in Thailand, for example, is 7,000 Thai baht (around $200), while the average monthly budget might be around 20,000 Thai baht (around $570).

Increase Brand Awareness on Social Networks

Southeast Asia claims one of the highest social media usage in the world – in all six countries social media penetration exceeds 70% and is expected to grow in the future as well. On average, internet users in the region spend on social networks every day from 1.6 hours in Singapore to 3.7 hours in Philippines. Across the region, Facebook and Instagram and Youtube are among the most popular social media networks.

Use this knowledge to run dynamic retargeting campaigns – it means that customers who’ve already once visited your site to look for a product, but have left without a purchase, would be reminded on social networks such as Facebook that the product they are interested is still available on your online store.

Dynamic retargeting through platforms like Google, Criteo or Sociomantic are the most effective channels in ecommerce to drive both customers to your online store and sales. Platforms like Criteo allow brands to retarget users across both Facebook and ad networks as well as across multiple devices. Dynamic retargeting is a “no-brainer” channel commonly applied by retailers such as Lazada and Sephora, but unfortunately still ignored by many brands.

Facebook also allows businesses to target ads towards existing customers or potential customers that share their interest with its Ads Manager function, a ‘lookalike audience’. That is another way you can make your customer list work for you.

Offer Discounts and Samples To Drive Sales

Everyone loves discounts, especially in Southeast Asia. According to a Mastercard Survey, 75.8% of Thais are influenced to shop impulsively from online merchants when prices are lower, second only to shoppers in the Philippines, who came in first at 76.4%.

Offer discounts to your customers on certain product lines or on major public holidays, when people like to give gifts to one another to keep them coming back to your online store. In addition, offer them samples to try out new products. Both of these incentives work well as retention strategies.

Brands such as Bobbi Brown and Kiehl’s offer samples upon check-out, allowing shoppers to choose between miniature sizes of cleansers and toners, providing in-store perks with the online experience. A small, yet pleasant detail.

Shoppers can choose up to 3 samples upon check-out on the Kiehl’s Thailand website. Source: Kiehl’s Thailand online store

 

Southeast Asian consumers’ internet usage and shopping habits offer a great opportunity for brands to capture existing and new customers – they are already online, a nudge with an email subscription or a discount might be all that is needed to persuade them to buy your products.

Stay tuned for the next article in our beautyIQ series the following Monday. To better understand the general population habits in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, we have also gathered reports and infographics to better guide your journey.

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ

 

We’d love to hear your feedback,

find us on Facebook, LinkedIn or Twitter.

The first two articles of beautyIQ series looked at how to get customers’ attention by blending transactional and discovery content and localizing it according to Southeast Asian customer cultural preferences. The next step to any brand’s successful ecommerce journey in Southeast Asia is to figure out where to sell their products, which will be the focus of this article.

Two thirds of shoppers in developing Asia say access to branded goods is at the core of their ideal shopping experience.

Yet Southeast Asia has only one third of retail stores per capita compared to the United States, limiting offline shopping of branded apparel, beauty and other products and making the internet a great distribution channel. In order to sell products in Southeast Asia, it is vital for brands to be seen online.

Brands have typically three options when selling online:

  • Create a localized brand web store
  • Partner with official distributors or sell on social platforms like Facebook, Instagram, LINE
  • Open a flagship shop (shop in shop) on a marketplace or online retailer

Of course, each option has its pros and cons for brands to consider. The channel on which to sell online will depend on the particular brand guidelines and its positioning, for example, Kiehl’s strictly cannot sell on a marketplace. Yet, in Southeast Asia having a localized brand web store and presence on a marketplace might bring in more dollars.

Where to Sell

The beauty of selling on your own webstore is complete control over the branding of your products, sole ownership of customer data and higher margins as you would sell directly to consumers and no commissions would need to be paid to ‘middlemen’.

aCommerce internal data showed localized webstores of particular brands in Thailand last year experienced 15% month-on-month growth of gross merchandise value (GMV) and GMV of products sold on brand webstores made up 45% of total product sales on various online platforms.

The risk is that the creation of a brand webstore is pricey as brands might have to invest up to $100,000 over a one year period with additional costs for logistics or marketing.

Selling on social networks is another important channel to capture consumers in Southeast Asia as this is a mobile first region. According to Bain & Co, around 30% of sales in Indonesia come from social media, blog shops and messaging apps as 27% of consumers in big cities and close to 80% in the countryside research and buy products on their phones.

This channel may not be appealing for established brands as social networks are mostly used for consumer-to-consumer (C2C) sales but up-and-coming local, regional or global brands may consider partnering with LINE or Facebook for more personalized communication and direct channel to communicate with potential customers.

Opening a flagship store on an online marketplace or “shop-in-shop” provides more powerful distribution. For example, Lazada drew more than 150 million visitors in August from six Southeast Asian countries (Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore), SimilarWeb data shows. While it is extremely popular in most markets, it’s not the number one go to marketplace in every country.

By analyzing average monthly web traffic, businesses can decide which marketplace to sell its products on for heightened exposure. eIQ has compiled the rankings for Thailand, Indonesia, Singapore, Malaysia and Vietnam.

The benefit of selling on a marketplace is the opportunity to tap into an existing large pool of potential customers. There is no such thing as a free lunch and the cost in this case is more competition and a commission that marketplace will charge for brands to sell their products on their platform.

Tricks to Know

If your brand does decide to sell on Southeast Asia’s popular marketplaces to capture their millions of visitors every day, it is best to keep in mind no two are alike.

Each platform has its own guidelines and product content needs to be modified accordingly.

For example, marketplaces tend to promote products on their front page from brands who have proven good sales, so sellers may find it beneficial to work with a brand solutions team to secure higher visibility for their campaigns.

Lazada allows brands to create a “shop-in-shop” that incorporates interactive features such as sliding banners and video content. This is so sellers can customize their shops to feel like a brand.com and provide shoppers with a pleasant shopping experience. This option may be wise for brands who do not have the budget to create a full ecommerce website.

Maybelline Thailand official “shop-in-shop” on Lazada. Source: Lazada Thailand

 

L’Oreal Thailand “shop-in-shop” on Lazada. Source: Lazada Thailand

 

For beauty brands, Sephora may be a good marketplace to sell on as it features detailed product descriptions and reviews, but all product images are shot from one angle and there is no brand related content. However, compared to, for example, Lazada where almost any brand can sign up to sell their products, getting sold on Sephora is dependent on a decision by retailer’s buyers.

Display of L’Oreal Paris products on Sephora Indonesia online store. Source: Sephora Indonesia

Zalora allows brands to provide a short description or visual, while the product descriptions are standardized. As product reviews are rare on Zalora, the marketplace might offer a discount or some other incentive for users to leave reviews which is a great tool to persuade customers to buy products.

L’Oreal Paris shop on Zalora. Source: Zalora Thailand

 

Brand Spotlight

La Roche Posay’s “shop-in-shop” on Lazada is a good example of how to exercise engaging content into a marketplace site. With multiple product displays, sliding banners and video content, the brand stands out amongst other standard displays.

La Roche Posay’s “shop-in-shop” on Lazada. Source: Lazada Thailand

 

How to Make the Most of Your “Shop-in-Shop”

Follow these tips and they will help your brand gain more visibility and increase sales when selling on marketplaces:

  • Fully optimize page design and brand banner (use slides, images, graphics)
  • Consider ‘knowledge buttons’ that lead to more discovery content. For La Roche Posay, the knowledge button leads to tips from certified medical professionals. Rich content here is advisable, as the page could be redirected to engaging/actionable content
  • Optimize product images: create 360 degree view of products. Currently a lot of brands showcase one dimensional product images, but customers should have a complete view of what they intend to buy as they can’t touch it
  • Banner should re-direct to product category page
  • Optimize video content to differentiate brand identity: tell a visual story
  • Fully engage customers in product details: explain benefits, ingredients/nutrition and instructions (if applicable)
  • Create engaging content such as product endorsement (for example, from doctors) and brand history

Brands should consider the above mentioned benefits and drawbacks of selling on various online channels in Southeast Asia as preferences will vary. It would not suit premium and luxury brands to open a “shop-in-shop” on marketplaces as that could tarnish their brand image.

Yet, for many brands, especially new, having both – a brand web store and a shop on various platforms will ensure that more customers see and can buy their products, especially if they are not widely available in the limited amount of retail stores in the region.

Stay tuned for the next article in our beautyIQ series the following Monday.

BY ANUTRA CHATIKAVANIJ AND AIJA KRUTAINE


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beautyIQ Series Part 1 looked at various practices global brands use in Southeast Asia to boost sales through intertwined transactional and discovery content. This article will focus on the importance of adjusting content to the cultural preferences of brand’s target customers in order to grab market share. Let’s begin!

Smartly crafted website content is essential to engage customers and nudge them towards making a purchase. Even more important to note is that

75% of shoppers are more likely to purchase products with information in their native language.

Southeast Asia constitutes diverse countries with varied consumer trends. To thrive here, global brands need to understand the demands of each market by localizing their content, offering promotions on local holidays or using faces familiar to the target audience in photo shoots. While it may not be budget friendly to create unique content for each country website, even small adjustments have the potential to increase a website’s conversion rate by as much as 25%.

Here are three ways brands can make their online content more relevant for customers in Southeast Asia:

1. Communicate like a local

To enter a new market, any brand should ‘speak’ the language of the country. That is especially the case in Southeast Asia where English language proficiency levels vary widely across countries. In Indonesia, Vietnam and the Philippines, the levels are moderate, while Thailand and Cambodia rank 62 and 69 out of 70 countries, respectively. The only Southeast Asian countries with high proficiency of English are Singapore and Malaysia, who were a part of the British Empire in the last century.

The first step brands should take when launching an ecommerce website is providing a language selector for countries with low English proficiency in addition to a site in English.

French cosmetics store chain Sephora has web shops in local languages in Indonesia, Thailand and China, but its online stores in Malaysia, Philippines and Singapore are in English.

Sephora caters to local customers in countries with low level of English language proficiency by providing the content in customers’ native language. Source: Sephora Thailand website.

 

Yet, the difference between being good and being great is not simply translating website content, but also taking into account cultural differences and preferences.

The global brand that stands out with well crafted content is American premium cosmetics retailer Kiehl’s. Besides its brand.com website being available in Thai and Bahasa languages, Kiehl’s collaborates with local brands to leverage popular social media trends.

In Thailand, Kiehl’s collaborated with Jay The Rabbit, local loveable Facebook sensation, on ‘Kiehl’s heritage for Thai heritage’ campaign where it donated part of the earnings to an elephant foundation. This would definitely score brownie points in Thailand, once ranked the most generous country globally. 

Kiehl’s works with social media influencers to increase its brand awareness and engage new audience segments. Source: Kiehl’s Thailand website.

 

Kiehl’s also has dedicated Instagram accounts in Indonesia, Malaysia, Philippines, Thailand and Singapore, to share promotions relevant for locals, such as hijab and makeup demos in Indonesia. At the same time, all sites and social accounts are consistent in maintaining Kiehl’s global brand identity with look and feel.

Kiehl’s localizes promotional campaigns making them relevant to their target customers. Source: Kiehl’s Indonesia Instagram account.

 

Many global brands have strict guidelines that leave little room for maneuver – meaning promotional campaigns, visuals or tutorials targeted to Southeast Asia have to be the same across all countries from headquarters in North America. If brands don’t adapt to cultural preferences, however, they fail to engage customers and face getting overshadowed by competitors with more flexibility.

2. Leverage the power of peer and celebrity opinions

Asian shoppers’ purchase decisions are strongly influenced by peer feedback and celebrity association, according to a report by PwC.

47% of customers in Asia consider opinions of friends and family before making a purchase, while 90% are influenced by information found on social media.

In Thailand, one of the brands that leverages the potential of local celebrities, bloggers and other key online influencers for their promotional campaigns, is Maybelline. Its Youtube channel, which is featured on its local brand.com website, contains many videos with well-known Thai celebrities and beauty gurus – immediately putting their products in front of a new audience.

Maybelline features several videos with Thai model and actress “Lukkade” Metinee Kingpayom, Thailand’s Kate Moss. Source: Maybelline Thailand Youtube channel.

 

In Indonesia, Kiehl’s collaborated with well-known actor Nicholas Saputra and TV presenter Sarah Sechan for their ‘Kiehl’s Gives’ campaign to support Wehea Forest Preservation in East Kalimantan.

Indonesian celebrities became personality partners of Kiehl’s to support Wehea Forest Preservation in East Kalimantan. Source: Kiehl’s Indonesia Instagram account.

 

Global brands should also use Asian models to showcase products as it’s crucial for the customer to gauge how a blush or lipstick shade would look on their own skin tone. For example, Maybelline Thailand uses predominantly Thai models in their product videos hoping consumers can more easily identify with them.

Source: Maybelline Thailand Youtube channel

 

Skincare brand Nivea also uses local-looking models on their Indonesian, Filipino, Thai and Vietnam local websites (although it is not possible to buy their products online).

Source: Nivea Indonesia website

 

Brands such as Shu Uemura and Bobbi Brown also have a balanced mix of Asian models integrated in their visual web content.

Source: Shu Uemura Thailand website

 

Another issue brands may want to consider is the fact that around 40% of Southeast Asia’s population identify as Muslims. Luxury brands such as Dolce Gabbana, Oscar De La Renta and DKNY as well as fashion brands like Uniqlo and Mango hope to tap into this new customer segment by creating apparel collections specially targeted to Muslim women.

While no global beauty brand has created ads using Muslim models in hijab, Indonesian brand Wardah takes it one step further by offering halal beauty and skincare products and personalizing the marketing to Muslim women as seen below. 

Indonesian beauty brand Wardah creates products particularly for Muslim women. Source: Wardah Indonesia website.

 

3. Celebrate like a local

Due to its cultural and religious diversity, Asia has many major holiday and festival seasons. And as the region’s incomes rise, so too does its holiday spending, creating a wealth of opportunities for businesses. — Nikkei Asian Review 

While Christmas gift frenzy might be global, other celebrations vary from country to country. To achieve the best results, promotional campaigns should be adjusted to major holidays and cultural events of the particular country.  

Kiehl’s in Thailand is a good example how to leverage holiday season. The company centered their promotion around Songkran Festival, which marks the Thai New Year, to offer special discounts for its products and drive sales.

Localize promotional campaigns leveraging on public celebrations. Source: Kiehl’s Thailand Instagram account.

 

Popular public celebrations brands in Southeast Asia can benefit from are:

  • Western New Year
  • Chinese New Year celebration
  • in Thailand Songkran Festival and Her Majesty the Queen’s Birthday (which is celebrated as Mother’s day)
  • in Indonesia the month of Ramadan has become known for driving online retail sales and Harbolnas

While it may be complex to calculate exact return on investment in localization of content, the benefits of it for global brands include first mover advantage and higher revenues from new markets.

Tailoring content to match local quirks and preferences, whether it’s using models that match the general consumers’ skin tone or leveraging the popularity of local celebrities, will help you monetize local behavioral traits such as the fact that 87% shoppers in Asia share their retail experiences on social media.

Stay tuned for the next article in our eIQ series the following Monday that will focus on tools needed to distribute products on various platforms in Southeast Asia.

BY ANUTRA CHATIKAVANIJ AND AIJA KRUTAINE

 

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