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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.

Apparel and tech gadgets are two things that are almost synonymous with online shopping. According to Statista, ecommerce sales in fashion and the electronics & media categories make up more than 50% of total online sales in Southeast Asia.

Statista estimates ecommerce sales in the electronics & media category will reach $5.26 billion this year across six Southeast Asian countries (find below), while the online fashion market will reach $4.464 billion.

websites where online shoppers buy fashion and mobile phones in SEA

Fashion online sales in the region are expected to double within the next five years and electronics & media are expected to increase 1.5 times. Where are customers going online to look for these products?

Google’s Consumer Barometer has some answers and based on the data, a couple of online channels in Southeast Asia stand out for buying clothing & footwear and mobile phones.

Where are shoppers buying clothing & footwear?

Consumers mostly buy apparel on general online marketplaces and e-shops that predominantly focus on selling fashion and footwear. Less people report buying on brand.com but until only recently did well known brands such as Adidas, Zara, Uniqlo, started to offer their products online in Southeast Asia.

Other popular online shopping destinations include social sites such as Instagram and Facebook and apps like Shopee and Carousell who are dominating C2C market sales in the region.

websites where online shoppers buy fashion and mobile phones in SEA

Where are shoppers buying mobile phones?

As for electronics, there is a larger variety of channels shoppers use to buy mobile phones. In Indonesia, classifieds sites and mobile phone brand stores are the most popular choice for shoppers.

In Vietnam, shoppers favor online shops of mobile retailers and big box retailers, while in Thailand people shop on general e-retailers. websites where online shoppers buy fashion and mobile phones in SEA


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The hype surrounding ecommerce in Southeast Asia is high and everyone from small retailers, globally acknowledged brands to established giants like Alibaba and Amazon are looking to tap into the market.

Similar to other markets, Southeast Asia experiences seasonality in sales – some months are quiet while others experience a rush of eager shoppers. National holidays across the six biggest nations in the region differ, so which are the best performing sales months?

Regional ecommerce enabler aCommerce has shared data that sheds light on online shopping seasonality for various categories in the region.

Best time for sales?

The year end holidays unsurprisingly provide great opportunities for retailers as shoppers flock to the stores looking for gifts, decorations, and Southeast Asia is no exception.

Nearly 40% of online sales are generated in the last three months of the year – October, November and December.

While 2016 saw a number of brands and retailers in Southeast Asia follow in Alibaba’s Singles Day, the world’s biggest online shopping festival held on November 11, sales leading up to the massive campaign were actually higher in October and December.

eIQ seasonality of ecommerce sales in SEA in 2016

Source: aCommerce data includes Indonesia, Thailand, the Philippines and Singapore.

There were slight differences across countries but the last quarter was the peak of online sales in the four markets. Retailers usually begin preparing for the holiday season in August/September to accommodate the sometimes 300% increase in sales volume. This means marketing campaign collateral, raising awareness of future sales, hiring extra staff in warehouses, etc. 

Best performing category?

When looking at trends in category sales, similar patterns emerge showing higher month-on-month (MoM)  growth at the end of the year.

Beauty products and consumer electronics show higher fluctuations in MoM sales growth, while fashion & apparel sales growth is steady.

In 2016, electronics sales increased 2.5 times in October compared to September – most likely due to the release of the new iPhone 7 from Apple in Malaysia, Thailand and Singapore. Sales of beauty products tripled in November most likely boosted by holiday season campaigns advertising cosmetics as gifts for upcoming celebrations.

Kiehl’s Indonesia campaign for 2016 holiday season.

“The Asia Pacific region generates the highest sales via digital retailing for the beauty and personal care market. Its 2010-2015 CAGR at 25% outpaces global internet retailing CAGR at 15%. Therefore, targeting Asian consumers requires a strong online strategy,” said Joanna Chan, Beauty and Fashion Research Analyst at Euromonitor International.

However, a winning online strategy will differ across countries as consumers in markets like Singapore are tech savvy, use credit cards and buy online frequently and in other markets like Indonesia or the Philippines, the poor infrastructure and internet speed need to be taken into account.

As retail around the globe shifts towards a model where online serves as an additional branding, marketing and sales channel for traditional brick-and-mortar stores, stepping into ecommerce will reap first-mover advantage.


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Thailand’s digital and ecommerce landscape could experience 20x growth over the next ten years as the online ecosystem becomes available to the majority of shoppers.

With social channels and new means of communication, methods of targeting consumers and a more holistic understanding of shoppers in a digital age, ecommerce is becoming a true staple in driving business growth in the country.

The integration of social channels in all platforms has also increased. Facebook has become a viable platform for buying and selling among online Thai shoppers, with 44 million active users in the country and reaching 7% yearly growth. Instagram is another important platform that has almost 10 million users in Thailand.

Meanwhile, the tech industry’s most talked about mobile app, Snapchat (that recently filed its IPO), remains a less popular social platform in the country. The app, however, is testing social commerce functions to potentially strengthen its positioning in the market.

Priceza: Predicting 20x growth in the next ten years

According to Tanawat Mahabupha, co-founder of Priceza, Thai consumers are not necessarily seeking out the cheapest deals. The quality of products and credibility of brands are becoming integral to the decision making process.

“This year, Thailand will have a strengthened infrastructure. Both payment and logistics will become crucial drivers of progress. It can be said that if e-payment takes off, so will ecommerce.”

The shopping behavior of Thais is a mix between going onto marketplaces to browse and/or shopping directly from brand.com. This is especially the case for more premium products, such as cosmetics.

Currently, Southeast Asia is experiencing the most rapid growth in ecommerce and Thailand has the highest gross merchandise value (GMV) in its group. This means that retailers and brands need to be quick in adopting digital strategies. Aside from competing over the speed of launching a product, brands also need to act swiftly in logistics and customer service. The importance of a speedy delivery service is crucial to the success of an ecommerce strategy.

Lnw Shop: Great consolidated ecosystem by sellers 

Nuttawit Polwattanakul, CEO of Lnw plc, or Lnw Shop says that this year, social commerce will experience even more robust growth. A lot of brands will be turning to channels that do not require them to pay a fee, such as Instagram or Facebook.

According to Nattawit, e-payment may take approximately 3-4 years to fully take off and calm the fears of consumers. It’s important to ensure that marketplaces accommodate the incoming new comers in payment in order to accommodate the country’s diversifying payments landscape.

The government is currently pushing initiatives for SMEs, educating the market about different marketing channels and how to use them. Most recently, the Thai government announced an official partnership with ecommerce giant Alibaba to boost growth for small and medium sized players. SMEs are also recommended to integrate Facebook Live into online strategies.

Aside from the development of payment, logistics and marketing, more sellers will want to join forces to target consumers. It is a challenge to construct and operate a website, which is why Thais prefer to join forces and provide customers with collaborative platform, especially in the area of logistics and last mile.

Ascend Group: Promotions are not enough

Thananan Arunrukchai from Ascend Group has pointed out that for e-payment to take off, it must be a no hassle, one step process, otherwise, the complications will drive consumers to resume  shopping via chat apps and bank transfers.

He also notes that it’s vital for brands to understand what their customers want and identify the appropriate marketplaces. This is more important than dishing out promotions in the long run. Some brands often overlook the importance of a customer experience, and instead focus on giving away promotions without much brand engagement.

COL Plc: It’s not easy to go online

According to Worawut Oonjai, chief executive of COL Plc., ecommerce only makes up 2-3% of total retail, hence the growth potential. According to him, it is not easy to go online. Brands should use marketplaces as a platform to test the waters and diversify their online presence.

Brands should widen their marketplace selection in order to collect enough data and the know-how to launch a brand.com.

However, if a brand truly wishes to pursue a brand.com strategy, they need to be strong enough; factors such as funding and a niche market would be necessary for a successful direct-to-consumer strategy.

Looking forward

TNS, global market research company, reports that Thai people have the highest use of social media platforms – 92% of users on a daily basis. Bain & Co also released findings that the Thailand online market is estimated to make up 15% of total retail by 2024.

For companies realizing the importance of ecommerce, are they too late to the game? Not really. Convenience store chain MaxValu recently announced that they are in the middle of executing an online strategy after witnessing a rise in online demand from when they sold new year gift baskets via online distributors. For companies with large offline footprints and strong customer base, they actually have an advantage.

So there we have it, the thoughts of some of Thailand’s ecommerce influencers. The country is undeniably undergoing fast internet adoption and with the increasing popularity of social commerce and marketplaces, brands are under pressure to seize the ten year growth potential. It’s important to use marketplace visibility to tread into ecommerce and as a stepping stone to a brand.com strategy, but brands should be wary of following the herd and without fully establishing a footprint in the ecosystem first.

This post was translated and modified from Bangkokbiznews.com and Prachachat.net. Read the original entries in Thai here and here.

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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UNIQLO, Japan’s global fashion label, will open an online store for the Thai market next Friday, in a move that will complement its physical stores by offering unlimited items, nationwide coverage and around-the-clock access to consumers.

Chanvit Khieonavavongsa, marketing and public relations director and head of ecommerce at UNIQLO Thailand, said the ecommerce channel is a means of answering the demand for broader coverage, since the firm has consistently received queries from consumers who do not live in those areas where it has branches

Entering the Thai market nearly five years ago, UNIQLO currently has 32 physical branches in nine provinces, covering around one-third of the population.

Chanvit said the online channel would not, however, decelerate UNIQLO’s expansion of its physical outlets in the Kingdom.

The Thai online store is the Japanese fashion label’s 12th worldwide, following similar stores launched in Singapore in 2014 and in Malaysia last year.

UNIQLO has assigned Singapore Post to handle logistics and delivery for orders placed via the Thai online store, with guaranteed nationwide delivery of between one and three days. The company charges no delivery fee, while the packaging charge is waived for orders of above 1,500 THB.

Thailand’s Internet penetration rate is expected to reach 56% this year, or 36 million people, growing over 20% from last year, while about 42% of Internet users have experienced buying online.

The estimated value of the Thai ecommerce market last year was 1.2 trillion THB, up 3.65% from the 2014 level. Beauty and fashion together accounted for 42.6% of all online transactions. Chanvit said UNIQLO sales in Thailand so far this year were still in line with its target.

A version of this appeared in The Nation on July 23. Read the full version here.