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In this day and age, a mobile phone can do more than making a phone call; it records the time, takes pictures, orders meals and even measures your heart rate. Who needs a watch these days?

You may be surprised to learn that even though 81.4% of Thais own a mobile phone, many still wear wrist watches.

Mobile phone user penetration in Thailand; eMarketer.com

What do Thais Look for when Buying a Wrist Watch?

Out of the 877 Thai respondents, 94.9% wore a watch and more than half (56.0%) owned three watches or more. Data from the ecommerceIQ Wrist Watch Survey Thailand 2018 indicated that watches remain a necessary accessory among Thai consumers with demand still high despite a large number of smartphone users. Statista reported a total of 25.75 million smartphone users in Thailand but the days of the wristwatch are not yet over.

Apart from the obvious reasons to tell the time (62.5%), 13.5% also wore a wristwatch as an accessory. Male respondents especially mentioned that wearing watches was the easiest and classiest way to look good. Around 8.6% cited that wearing a watch reflected their status and style and helped to boost their confidence.

For this reason, design was naturally the most important factor that Thais considered when buying a wristwatch, followed by price and brand name. Brand name also reflected status and personal style. For example, Rolex is still highly regarded as a prestigious timepiece brand in Thailand. Wearing a Rolex advertises high income and social status.

Price, naturally, is another high-ranking factor. Watches are deemed as expensive accessories and not something to be bought on an impulse. Thais only buy new watches every few years (58.7%). Most respondents indicated that they were comfortable to spend around 1,000-30,000 baht on a wristwatch.

Factors that Thai respondents look for when buying a watch; ecommerceIQ Wrist Watch Survey Thailand 2018

The top three watch brands preferred by Thai respondents were Seiko (25.6%), Casio (21.6%), and Omega and Rolex (10.9%).  What do we learn from this ranking?

  • Seiko is a Japanese company that revolutionized the industry and is known for its long history of watchmaking. Prices range from 5,000 to 30,000 baht and the brand is popular among 20K-50K baht income earners.
  • Casio offers a diverse product assortment and brands including G-SHOCK and Baby G. Casio are known for their affordable but attractive designs.
  • Rolex and Omega are popular among consumers aged 40 and above. These two brands are preferred by the older generation, while youngsters opt for IWC or Tag Heuer as luxury timepieces.
  • Daniel Wellington, is a hipster brand that rose to popularity fast and won the hearts of the younger generation. Up to 75% of respondents aged 18-25 wore this brand. Tag Heuer is also popular amongst the 31-40 age group.

When asked about the media channels they used for news and information about timepieces, 48% of the respondents stated that they received news from social media with 33.7% using brand websites.

In Thailand, 74% of the population are active social media users, as reported by ETDA 2017. Thus, it does not come as a surprise that social media was the main channel respondents used for news concerning watches. Brand websites offer more genuine and trustworthy news about the brand itself.

Media channels that Thais use for news about wrist watches; ecommerceIQ Wrist Watch Survey Thailand 2018

Where do Thais Buy Wrist Watches?

Despite the heavy usage of the Internet to consume news, 76.7% of Thais still buy wrist watches from offline stores. The most popular offline channel used by 55.5% of the Thai respondents was Central Department Store because of the store’s credibility.

Like most department stores in Thailand, Central Department has a dedicated section for wristwatch sales. Apart from their reliable reputation, buying a wrist watch from Central Department Store is very easy and convenient. Up to 19% of the respondents looked for convenience and a holistic service, especially regarding after-sales service when buying a watch. Every Central Department Store has a ‘Watch & Clock Clinic’ that offers after-sales service for watches bought from the store.

Watch & Clock Clinic at Central Department Store, Pinklao Branch

Only 23.3% of the respondents bought wrist watches online. Lazada received the highest scores in terms of an online sales channel where Thais buy watches. The second preferred option would be the brand website, due to its credibility.

The online channels Thai respondents choose to buy watches from; ecommerceIQ Wrist Watch Survey Thailand 2018.

 

Similar to other product categories, the top reason cited for opting for online channels was because of convenience; ecommerce saves time and is hassle-free. On the other hand, some Thai respondents refrained from buying wrist watches online due to a perceived lack of credibility in the sellers and/or marketplaces. Offering a warranty and after-sales service are also factors that some online sellers fail to provide.

Reasons why Thai respondents bought wrist watches from online channels; ecommerceIQ Wrist Watch Survey Thailand 2018

It is also interesting to note how wrist watches are listed by Lazada and Shopee websites as each has a slight difference. From our observations, watches are only found in the ‘watch and glasses’ category on Shopee, while Lazada lists watches under: Electronic accessories, women’s fashion, and men’s fashion. This provides users with more exposure to the products and hence higher conversion to sales.

On the Lazada website, users are able to see watches listed on the e-marketplace more frequently and in more sections than at Shopee. Lazada, watches can be found under Electronics as wearables and accessories, which is also categorized into male, female and child timepieces.

Shopee, on the other hand, only offers watches under the watches and glasses category, and does not categorize watches for different demographics like Lazada.

How Can Watch Brands Take Advantage?

Watches are deemed as a luxury item by Thais. More often than not they are bought as an investment. Thais look for credibility and confidence from the seller, as well as a warranty proving that the timepiece bought is authentic.

It is not enough to list your products on a marketplace and engage in advertising campaigns. Rather, brands should focus on establishing confidence among consumers. One way to ensure this is to be listed as an official seller on LazMall or Shopee Mall, as well as including a clear statement about warranty and after-sales service conditions.

For luxury timepiece manufacturers, an e-marketplace may not be the ideal strategy as it may conflict with the brand’s positioning. Luxury brands should focus on providing beyond-expectation services and ascertaining that information is clearly visible on their websites.

As watches are still mainly sold offline, now is the right time for brands to give omnichannel a try. Take Burberry for example. They created the Burberry Retail Theatre that streams live runway shows into a number of their stores worldwide and through their other online channels. In the Retail Theatres, customers can browse live streaming collections on iPads and purchase items online immediately.

Burberry’s Runway to Reality campaign allowing consumers to order items from the runway in real-time

However, high-end or mid-range Thai timepiece brands should not ignore the power of social media. Daniel Wellington sets a great example through owning its own social media game. The company reduced spending on traditional advertising and turned instead to social media to reach potential consumers through use of the hashtag #DanielWellington. This also leverages user-generated content (UGC) to engage its customers and drive brand loyalty.

An Instagram post was created with #DanielWellington as #DWPickoftheDay and #DWPickoftheMonth

By taking your brand digital, you are embracing an endless supply of consumer data. As Shadi Halliwell, the creative and marketing director of Harvey Nichols stated,

“Data is a conversation; the more data you have on someone, the more conversation you can have.”  

Customer service goes beyond a smiley face and a friendly personality. In the world of ecommerce, where there is a lack of human touchpoints, customer service plays a vital role. When done well, it can help you increase your Average Order Value (AOV), boost your conversion rate, and create brand loyalty.

But gone are the days when customer service translated to 24-hour hotlines. In this day and age, customer service often comes in a form of live chat, recently popularized by all the hype around AI-driven chat bots.

In order to craft an effective customer care strategy, it is important to benchmark the level of customer service in the marketplace. To do that, ecommerceIQ conducted an experiment to test the responsiveness and effectiveness of brands offering live chat on Lazada Thailand.

Methodology

We randomly picked three brands from each category offered on LazMall, sampling a total of 27 brands across Lazada Thailand.

Each of the brands was asked the same single question – “How long does it take to deliver a product from your brand?” – during two time periods: during lunch time and after work. These are typically peaked online shopping hours, translating into peak load hours for live chat operations too.

Results: How Do Brands’ Customer Service Perform on LazMall?

From our observations, 25.9 percent of the brands offer a real-time response through Lazada live chat. 22.2 percent replied within 30 minutes, 22.2 percent replied within the first hour, 11.1 percent replied within 6 hours and 24 hours, and 7.4% of the brands did not reply at all.

It is also noted that the categories that are the most responsive are Electronics & Mobile and Home & Lifestyle.

Since our sample covers after work, off-hours too, this allows us to identify brands that have configured auto-replies for their live chat. Only 37 percent of the brands tested had auto-replies enabled. Setting up auto-replies is easy and a no-brainer in this day and age when everything is on-demand and 24/7.

ecommerceIQ’s observations about the responsiveness of live chat on Lazada Thailand

From our observations, 25.9 percent of the brands offer a real-time response through Lazada live chat. 22.2 percent replied within 30 minutes, 22.2 percent replied within the first hour, 11.1 percent replied within 6 hours and 24 hours, and 7.4% of the brands did not reply at all.

It is also noted that the categories that are the most responsive are Electronics & Mobile and Home & Lifestyle.

Since our sample covers after work, off-hours too, this allows us to identify brands that have configured auto-replies for their live chat. Only 37 percent of the brands tested had auto-replies enabled. Setting up auto-replies is easy and a no-brainer in this day and age when everything is on-demand and 24/7.

Xiaomi’s automatic reply which indicates the working hours and apologizes for the slow response in both Thai and English.

Most brands do add some human touch to their chats, such as using stickers and offering detailed information. But that is not enough to make an impression and the current live chat offering from brands are far from using live chat at its maximum ability.

How can Brands Improve their Live Chat on E-Marketplaces?

With these findings, brands should start paying more attention to their customer care strategies. We spoke with the Ms. Ratchaneewan Vichaisorn, Head of Customer Service at aCommerce, an end-to-end brand ecommerce enabler in Southeast Asia. Here are her suggestions:

1. Equip your Customer Service / Chat Agents with Product Knowledge

As the agents operating your live chat are an extension of your company’s brand, it is important that they receive adequate training for your products. This is especially the case for Mobile & Electronics and Beauty categories as product knowledge are often the deciding factor for shoppers in Thailand.

According to Ms. Ratchaneewan Vichaisorn, Head of Customer Service at aCommerce, during non-campaign periods, 35% of the inquiries through live chat are about products, while the number of inquiries about products surged to 45% during campaign periods like 9.9. (See how to prepare for the annual online mega sales here.)

2. Leverage the Opportunity to Up-Sell and Cross-Sell

Based on their product knowledge, your agents should be able to provide recommendations of similar products or complementary products that consumers may be interested in.

Brands can also take this opportunity to inform consumers of upcoming promotions to keep them coming back to buy the next time too.

3. Collect Data and Monitor For Customer Feedback

Talking directly to your customers is a great way for brands to collect data and feedback from end users. This information can then be used to improve a brand’s products and services. Because live chats are automatically logged, the chat histories can be mined for patterns and insights.

4. Promote Your Brand

Your customer service agent should be encouraged to offer more information about the brand to improve the relationship between the brand and the consumer. Towards the end of the chat, inform the customer about the channels that they can follow your brand for content, updates, and promotions.

These are a few tips that your brand can adapt to improve your customer service. If you’re interested in a similar audit for your own brand or a consulting session to improve your live chat operations, please contact us via hello@ecommerceIQ.asia or fill out the form below:





 

 

Customer reviews matter for brands selling online. Studies have shown an increase of 161% in conversion rates when adding user generated product reviews.

Amazon of course has become the gold standard for high quality user generated reviews. Unfortunately for brands in Southeast Asia, getting customers to leave reviews is hard. Users don’t proactively write reviews and when they do, the content is short and not very helpful.

In this article, we’ll look at some of the brands that are doing well in terms of ratings and reviews on Lazada Thailand and identify some ways for other brands to get more quality reviews.

How do Ratings & Product Reviews help brands?

Ratings and product reviews help brands increase sales on marketplaces in three ways:

  1. Getting more traffic

Products reviews are basically user generated content on a brand’s product detail page. This content helps increase the ranking of that particular page on Google, therefore driving more offsite SEO traffic, leading to more sales.

In addition, higher ratings and more content also help the brand rank higher in terms of onsite search, i.e. users searching while on Lazada or Shopee.

  1. Increasing conversion rates

High ratings and positive, holistic user reviews also help increase conversion rates from the brand’s product detail page into checkout. Based on ecommerceIQ research, social proof or friend and family recommendations is a top 3 customer acquisition channel for marketplaces like Lazada and Shopee, demonstrating how important reviews are for conversions.

  1. Improve and defend brand equity

Marketplaces attract grey sellers. Genuine reviews from real users help distinguish your products from those of grey sellers or knock-off products.

Findings from our study

For our research, we looked at how the top brands that have an official shop-in-shop presence on Lazada Thailand perform in terms of ratings and reviews.

Specifically, we looked at and compared the below metrics. (Please note that you’ll be able to download the full data set with all these metrics by brand at the very end of this article. Click here to go there right now.) Please keep in mind that the ratings and reviews data was collected separately over a short period of time so minor discrepancies are to be expected.

  • Quantity:
    • Number of ratings
    • Number of reviews
    • Number of SKUs with at least one rating
    • Number of SKUs with at least one review
  • Quality:
    • % of SKUs with at least one rating
    • % of SKUs with at least one review
    • Number of ratings with at least 3 stars
    • Average rating
    • Average length of reviews (character count)

Based on the above metrics, we identified the following patterns and findings:

  • Top 18 official shop-in-shops are responsible for 80% of all the ratings (out of 161 official shop-in-shops tracked in this experiment)
  • Top 22 official shop-in-shops are responsible for 80% of all the reviews (out of 161 official shop-in-shops tracked in this experiment)
  • Average length of a review is 83 characters
    • This is how 83 characters looks like (short right?):

      “Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Aenean commodo ligula ege”

  • The top 3 categories with the most reviews are:
    • Health & Beauty (33,002 reviews, 46% of total)
    • Mother & Baby (23,970 reviews, 34% of total)
    • Bags & Travel (3,165 reviews, 4% of total)
  • The top 3 categories with the longest reviews are:
    • Health & Beauty (avg. 98 characters)
    • TV, Audio / Video, Gaming & Wearables (avg. 81 characters)
    • Mobiles & Tablets (avg. 76 characters)
  • The top 3 categories with the least reviews are:
    • Pet Supplies (7 reviews)
    • Sports & Outdoors (8 reviews)
    • Laundry & Cleaning (107 reviews)
  • The top 3 categories with the shortest reviews are:
    • Tools, DIY & Outdoor (avg. 37 characters)
    • Groceries (avg. 38 characters)
    • Cameras (avg. 45 characters)

Full table of data (best viewed on desktop or tablet)

Want do download the full Excel spreadsheet? Sign up here with your email and receive a download link.

Key Metrics By Category:

CategoryNumber of SKUsNumber of RatingsAvg. RatingNumber of ReviewsAvg. Length of Review (Character Count)Number of SKUs with at least one ratingNumber of SKUs with at least one reviewRatings per SKUReviews per SKURating Penetration (% of SKUs with at least one rating)Reviews Penetration (% of SKUs with at least one review)
Health & Beauty2,93871,5204.3933,002982,0061,929361768%66%
Mother & Baby96250,4764.3823,97074693688733572%72%
Bags and Travel1,2876,1853.963,165607827388461%57%
Home Appliances7075,3774.222,6076942140213660%57%
Fashion1,4833,9314.371,761505835647339%38%
Computers & Laptops5481,2694.121,5516310099131618%18%
Mobiles & Tablets361,2393.972,300762626488872%72%
Groceries1061,2184.4644138565022953%47%
Furniture & Décor8751,0674.09795542912794333%32%
Cameras357014.49309452727261177%77%
Toys & Games8015544.46253531531284219%16%
Laundry & Cleaning1404664.521075860478243%34%
TV, Audio / Video, Gaming & Wearables933724.1444581464681049%49%
Watches Sunglasses Jewellery6872353.863137493923314%13%
Bedding & Bath6551973.592105666593410%9%
Motors681784.501425945454366%66%
Tools, DIY & Outdoor33814.6612337333124100%94%
Pet Supplies74324.4875555617%7%
Sports & Outdoors5674.17854661111%11%

Key Metrics By Brand:

BrandNumber of SKUsNumber of RatingsAvg. RatingNumber of ReviewsAvg. Length of Review (Character Count)Number of SKUs with at least one ratingNumber of SKUs with at least one reviewRatings per SKUReviews per SKURating Penetration (% of SKUs with at least one rating)Review Penetration (% of SKUs with at least one review)
L'Oreal Paris (Thailand)79821,4834.388,67481597570361675%71%
BabyLove (Thailand)12915,2754.405,898471041041475781%81%
Maybelline (Thailand)46412,3174.204,62649342313371574%67%
MamyPoko (Thailand)18511,1694.533,93349160160702586%86%
Garnier (Thailand)1909,3714.443,95387126125753266%66%
FOREMOST (Thailand)216,7504.162,25650202033811395%95%
Huggies (Thailand)1776,4084.626,408138102102636358%58%
Tesco Lotus (Thailand)9965,5943.962,812587186818572%68%
Vaseline (Thailand)1184,9334.464,0741946868736058%58%
La Roche Posay (Thailand)954,5904.632,255888383562887%87%
Durex (Thailand)934,0864.601,117406262661967%67%
Enfagrow (Thailand)643,6564.261,651545049743478%77%
Dove (Thailand)1223,3324.502,5631917676443462%62%
S-26 (Thailand)812,9984.131,385597269422189%85%
Sabina (Thailand)9392,3964.39988482942949431%31%
Yves Rocher (Thailand)3652,1454.427565820920411457%56%
Tefal (Thailand)2561,9484.249017215414213760%55%
Nivea (Thailand)2351,8574.238735710910718946%46%
Dumex (Thailand)1561,7333.761,334589696191462%62%
Lesasha (Thailand)861,6464.04889647575221287%87%
Tresemme (Thailand)701,4594.45703844236352060%51%
Black & Decker (Thailand)691,4594.24705796665231196%94%
Kira Kira (Thailand)191,3604.325146219197228100%100%
Vichy (Thailand)521,2664.59949704949262094%94%
Dettol (Thailand)341,0524.44379382725391679%74%
Citra (Thailand)389654.376821841918513850%47%
3M (Thailand)3029124.26330521471427349%47%
AJ (Thailand)698254.11576614040211558%58%
Nubia (Thailand)158103.981,33010312126811180%80%
Wacoal (Thailand)1547354.403374592928460%60%
Asus (Thailand)1947314.161,243584949152625%25%
Eneloop (Thailand)246524.52295452121321588%88%
Sunsilk (Thailand)656284.2831640424215865%65%
Levi's (Thailand)2616054.27303611361175352%45%
Ensure (Thailand)405914.5420257313120778%78%
Lego (Thailand)7545394.47248541481234320%16%
Pampers (Thailand)165104.842738720202614125%125%
Inter Steel (Thailand)4784844.14310541641593234%33%
3M Scotch-Brite (Thailand)1404664.521075860478343%34%
Vivo (Thailand)144143.95785421212356686%86%
JBL (Thailand)643674.1344282454591070%70%
Huawei (Thailand)43674.132027418172112450%425%
Merries (Thailand)93194.781175788401589%89%
RF Furniture (Thailand)642914.572683337378858%58%
Physiogel (Thailand)452634.64765734288376%62%
Curel (Thailand)282354.739867202012571%71%
Kuron (Thailand)242294.4311464151516863%63%
Xiaomi (Thailand)52224.3699931211199240%220%
Ray-Ban (Thailand)2542203.902997685853433%33%
3M Filtrete (Thailand)72204.197582773211100%100%
Samsonite (Thailand)422003.9716274191911945%45%
His & Her Shopsmart (Thailand)2251663.81886030246413%11%
HP (Thailand)3081583.9781772424748%8%
ADHOME (Thailand)1771513.54988349434328%24%
Enfa (Thailand)351373.72674318178451%49%
Pediasure (Thailand)601354.681035921217535%35%
3M Scotch (Thailand)601304.49675633334355%55%
Nescafe Dolce Gusto (Thailand)181284.61444016148489%78%
EMJOI (Thailand)101244.50827777181270%70%
G2000 (Thailand)991144.13765546463246%46%
Index Living Mall (Thailand)61003.9413359771519117%117%
Platong Furniture (Thailand)116993.18779334333329%28%
Era-won (Thailand)30814.77575915156450%50%
PR Shop (Thailand)637803.0760615447228%7%
PXTools (Thailand)6534.698137181835300%300%
Panasonic (Thailand)9494.141448669367%67%
Fit Auto (Thailand)8484.557561121247150%150%
Purina One (Thailand)3294.7456233102100%100%
DG (Thailand)10264.2431413391130%30%
Energizer (Thailand)26264.76156213112250%42%
U-RO Decor (Thailand)8194.4032673371138%38%
Finish (Thailand)8194.65651445250%50%
3M Command (Thailand)12174.001730554442%42%
Eastern Trade Commercial (Thailand)3173.998713363100%100%
Fisher Price (Thailand)47154.56557553111%11%
Samsung (Thailand)7154.20185332289329%29%
Lenovo (Thailand)21134.1125175992343%43%
LG (Thailand)2114.2671445432250%200%
Essence (Thailand)37104.93523752119%14%
Oakley (Thailand)8593.57105833344%4%
Vanish (Thailand)994.90774225422%22%
3M Post-it (Thailand)5674.17854662211%11%
Koncept (Thailand)2964.8021211623%3%
Bose (Thailand)2954.8036711533%3%
Vogue (Thailand)27842.6723732211%1%
Royal Canin (Thailand)7132.0024022213%3%
Big Home Furniture (Thailand)1934.00430331216%16%
Dyson (Thailand)225.0013752217100%100%
Safetydoor (Thailand)123.00272522114200%200%
Diesel (Thailand)4911.0014411112%2%
Timberland (Thailand)2115.0012711115%5%
Ricoh (Thailand)500000%0%
Microsoft (Thailand)1600000%0%
Unbranded/Generic (Thailand)200000%0%

Full Raw Data:

CategoryBrandNumber of ratingsAvg. ratingNumber of reviewsAvg. length of review (character count)Number of SKUsSKUs with at least one ratingSKUs with at least one review
Furniture & DécorADHOME (Thailand)33.301949311
Bedding & BathPR Shop (Thailand)11.001645211
Computers & LaptopsLenovo (Thailand)54.1513204822
Health & BeautyVaseline (Thailand) 4,9334.46 4,0741941186868
Health & BeautyDove (Thailand) 3,3324.50 2,5631911227676
Health & BeautyCitra (Thailand)9654.37682184381918
Home AppliancesLG (Thailand)64.275178133
Computers & LaptopsLenovo (Thailand)84.08121431377
Bedding & BathPR Shop (Thailand)13.0021421711
Mother & BabyHuggies (Thailand) 6,4084.62 6,408138177102102
Bedding & BathPR Shop (Thailand)15.0011203511
Home Appliances3M (Thailand)44.752105522
Mobiles & TabletsNubia (Thailand)7534.03 1,3211041299
Bags and TravelTesco Lotus (Thailand)5113.843049815655
Furniture & DécorEastern Trade Commercial (Thailand)73.40496111
Bags and TravelXiaomi (Thailand)2034.329496398
Furniture & DécorPlatong Furniture (Thailand)993.1877931163433
Home AppliancesBlack & Decker (Thailand)3924.221629171817
Health & BeautyLa Roche Posay (Thailand) 4,5904.63 2,25588958383
Health & BeautyGarnier (Thailand) 9,3714.44 3,95387190126125
Mother & BabyPampers (Thailand)5104.8427387162020
Health & BeautyTresemme (Thailand) 1,4594.4570384704236
Furniture & DécorEastern Trade Commercial (Thailand)-0.001831--
Home Appliances3M (Thailand)63.50283422
Computers & LaptopsHuawei (Thailand)353.622183276
Home Appliances3M Filtrete (Thailand)2204.197582777
TV, Audio / Video, Gaming & WearablesJBL (Thailand)3674.1344282644545
Health & BeautyL'Oreal Paris (Thailand) 21,4834.38 8,67481798597570
Computers & LaptopsHP (Thailand)1583.9781773082424
Health & BeautyEMJOI (Thailand)1244.5082771077
Bags and TravelTesco Lotus (Thailand)544.002876151311
Home AppliancesBlack & Decker (Thailand) 1,0674.2554376624848
Watches Sunglasses JewelleryRay-Ban (Thailand)2203.90299762548585
Home AppliancesTefal (Thailand)6974.17315751146862
Home AppliancesDyson (Thailand)25.001375222
Furniture & DécorADHOME (Thailand)1483.5497751744842
GroceriesVanish (Thailand)94.90774922
Bags and TravelSamsonite (Thailand)2003.9716274421919
Computers & LaptopsHuawei (Thailand)3324.191817321111
Bags and TravelTesco Lotus (Thailand)2163.5812573182323
Bags and TravelTesco Lotus (Thailand)893.706172553333
Health & BeautyVichy (Thailand) 1,2664.5994970524949
Home AppliancesTefal (Thailand) 1,2514.29586701428680
TV, Audio / Video, Gaming & WearablesBose (Thailand)54.803672911
Furniture & DécorU-RO Decor (Thailand)194.403267833
Health & BeautyCurel (Thailand)2354.739867282020
Bedding & BathPR Shop (Thailand)63.132657642
Home Appliances3M (Thailand)1314.2049651244
Bags and TravelHis & Her Shopsmart (Thailand)854.045064791311
Health & BeautyLesasha (Thailand) 1,6464.0488964867575
Health & BeautyKuron (Thailand)2294.4311464241515
Furniture & DécorInter Steel (Thailand)413.93963876
Home AppliancesAJ (Thailand)3294.0727763221111
Computers & LaptopsAsus (Thailand)3234.5374662472929
Mother & BabyKira Kira (Thailand) 1,3604.3251462191919
Pet SuppliesPurina One (Thailand)294.74562333
Tools, DIY & OutdoorEnergizer (Thailand)264.761562261311
Bedding & BathPR Shop (Thailand)21.0026211322
Bags and TravelXiaomi (Thailand)15.00161111
MotorsFit Auto (Thailand)484.55756181212
Bedding & BathIndex Living Mall (Thailand)744.4511561344
FashionLevi's (Thailand)6054.2730361261136117
Motors3M Scotch (Thailand)884.484661362121
Bags and TravelHis & Her Shopsmart (Thailand)213.973603563
Home AppliancesLG (Thailand)54.25260121
Bags and TravelTesco Lotus (Thailand)723.992960181713
Bags and TravelTesco Lotus (Thailand) 1,4933.8975159211138134
FashionEra-won (Thailand)814.775759301515
Mother & BabyS-26 (Thailand) 2,9984.13 1,38559817269
Home AppliancesAJ (Thailand)4964.1429959472929
Mother & BabyPediasure (Thailand)1354.6810359602121
Laundry & Cleaning3M Scotch-Brite (Thailand)4664.52107581406047
Watches Sunglasses JewelleryOakley (Thailand)93.5710588533
Health & BeautyYves Rocher (Thailand) 2,1454.4275658365209204
Mother & BabyDumex (Thailand) 1,7333.76 1,334581569696
Toys & GamesFisher Price (Thailand)154.565574755
GroceriesDettol (Thailand)24.50157521
Health & BeautyEnsure (Thailand)5914.5420257403131
Health & BeautyNivea (Thailand) 1,8574.2387357235109107
Bags and TravelTesco Lotus (Thailand)184.3312574388
Mother & BabyMerries (Thailand)3194.7811757988
Motors3M Scotch (Thailand)334.551257221010
Health & BeautyPhysiogel (Thailand)2634.647657453428
Bags and TravelTesco Lotus (Thailand)63.40556654
Bags and TravelHis & Her Shopsmart (Thailand)154.0013563244
FashionG2000 (Thailand)1144.137655994646
Bags and TravelTesco Lotus (Thailand)593.833755231714
Bags and TravelTesco Lotus (Thailand)5754.0928755926363
Stationery & Craft3M Post-it (Thailand)74.178545666
Toys & GamesLego (Thailand)5394.4724854754148123
Mother & BabyEnfagrow (Thailand) 3,6564.26 1,65154645049
Furniture & DécorInter Steel (Thailand)4414.1629953465156152
Bags and TravelHis & Her Shopsmart (Thailand)393.1018531633
Mobiles & TabletsNubia (Thailand)573.30953333
Bags and TravelTesco Lotus (Thailand)1654.3910552292423
Bags and TravelHis & Her Shopsmart (Thailand)23.502521211
Computers & LaptopsAsus (Thailand)4083.86497521472020
Home Appliances3M (Thailand)1574.347652804340
GroceriesFinish (Thailand)194.65651844
Bags and TravelTesco Lotus (Thailand)5723.72271511729289
Bags and TravelXiaomi (Thailand)184.80451122
Furniture & DécorInter Steel (Thailand)24.50250411
Mother & BabyFOREMOST (Thailand) 6,7504.16 2,25650212020
Bedding & BathPR Shop (Thailand)543.2842503173431
Home Appliances3M (Thailand)224.371449766
Mother & BabyMamyPoko (Thailand) 11,1694.53 3,93349185160160
Health & BeautyMaybelline (Thailand) 12,3174.20 4,62649464342313
FashionSabina (Thailand) 2,3964.3998848939294294
CamerasPanasonic (Thailand)494.141448966
Home Appliances3M (Thailand)5924.26187481949088
Bags and TravelTesco Lotus (Thailand)6584.0826047634239
Mother & BabyBabyLove (Thailand) 15,2754.40 5,89847129104104
CamerasEneloop (Thailand)6524.5229545242121
FashionWacoal (Thailand)7354.40337451549292
Watches Sunglasses JewelleryDiesel (Thailand)11.001444911
Bedding & BathIndex Living Mall (Thailand)212.101244222
Bags and TravelTesco Lotus (Thailand)4224.1921944796764
Mother & BabyEnfa (Thailand)1373.726743351817
Mobiles & TabletsVivo (Thailand)4143.9578542141212
Bags and TravelTesco Lotus (Thailand)2563.97128411177366
Mother & BabyDG (Thailand)264.2431411033
Bags and TravelTesco Lotus (Thailand)944.2449403599
GroceriesNescafe Dolce Gusto (Thailand)1284.614440181614
Health & BeautySunsilk (Thailand)6284.2831640654242
Pet SuppliesRoyal Canin (Thailand)32.002407122
Health & BeautyDurex (Thailand) 4,0864.60 1,11740936262
Bags and TravelTesco Lotus (Thailand)174.1515381466
Bags and TravelTesco Lotus (Thailand)3174.121263853227
GroceriesDettol (Thailand) 1,0504.4437838292524
Watches Sunglasses JewelleryVogue (Thailand)42.6723727832
Tools, DIY & OutdoorPXTools (Thailand)534.69813761818
Bedding & BathIndex Living Mall (Thailand)54.00635111
Motors3M Scotch (Thailand)94.35934222
Bags and TravelBig Home Furniture (Thailand)24.003341722
Furniture & DécorRF Furniture (Thailand)2714.6025234623535
Furniture & DécorEastern Trade Commercial (Thailand)104.40333122
Bedding & BathPR Shop (Thailand)22.00133421
Mobiles & TabletsSamsung (Thailand)154.2018533722
Bags and TravelHis & Her Shopsmart (Thailand)25.001322211
Bedding & Bath3M Command (Thailand)154.1314321044
Bedding & Bath3M Command (Thailand)-0.002301--
Bags and TravelHis & Her Shopsmart (Thailand)23.501281521
Bedding & BathPR Shop (Thailand)102.556282276
Watches Sunglasses JewelleryTimberland (Thailand)15.001272111
Furniture & DécorRF Furniture (Thailand)204.151625222
Tools, DIY & OutdoorSafetydoor (Thailand)23.002725122
GroceriesEssence (Thailand)104.935233775
Bags and TravelBig Home Furniture (Thailand)14.00118111
Bedding & BathPR Shop (Thailand)23.002184711
Bedding & Bath3M Command (Thailand)23.00116111
Furniture & DécorKoncept (Thailand)64.802122911
Bedding & BathPR Shop (Thailand)13.0014411
Bags and TravelHis & Her Shopsmart (Thailand)-0.00--3--
Bags and TravelBig Home Furniture (Thailand)-0.00--1--
CamerasUnbranded/Generic (Thailand)-0.00--1--
Computers & LaptopsRicoh (Thailand)-0.00--5--
Computers & LaptopsMicrosoft (Thailand)-0.00--16--
Bags and TravelHis & Her Shopsmart (Thailand)-0.00--10--
CamerasUnbranded/Generic (Thailand)-0.00--1--
Furniture & DécorInter Steel (Thailand)-0.00--1--
Bags and TravelHis & Her Shopsmart (Thailand)-0.00--1--

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The fourth quarter is always the busiest season for retailers and brands across the world, Southeast Asia is no exception. The wave of mega sales typically observed offline during Black Friday in December have moved online thanks to prolific marketplaces like Amazon, Alibaba and Lazada. These campaigns now occur consecutively on 9.9, 11.11, and 12.12 (September 9th, November 11th, and December 12th) and cause headaches for brands new to ecommerce.

Businesses must plan ahead well in advance with multiple partners to hit their annual online revenue targets as up to 40% of GMV can be generated in the last three months of the year.

To help brands make the best of the shopping season, these are 10 strategies based on experience working with e-marketplaces, talking to ecommerce enablers, and data from some of the biggest brands across Southeast Asia.

While this guide is most applicable to enhancing performance during the upcoming “mega online sales campaigns” held by players like Lazada and Shopee in Southeast Asia, brands can increase chances to maximize sales and minimize costly mistakes with the findings.

Let’s dive right in.

1. Promotions & Merchandising

Getting this part right may sound trivial but it’s the main ingredient for a successful sales campaign. If the product offering clashes with offline deals and/or pricing is weak, no matter how much is spent on marketing, there will unlikely be high sales volumes

This is akin to achieving product-market fit prior to scaling your business.

So how should brands approach this? Well, what are brands trying to get out of these mega sales – revenues or general visibility/awareness?

In the case of the former, brands need to secure prime real estate on a marketplace such as the homepage or category page, which are typically allocated based on attractive discounts, online traffic and cash vouchers.

In order to drive revenue, exclusive “doorbuster” deals are especially important when top competitors – official and grey market sellers alike – selling similar or identical items are dropping prices.

Mass market brands are free to offer discounts, whereas premium market brands cannot use discounting as a viable strategy (channel conflict) and should look at adding value via bundling and exclusive GWP (Gift With Purchase). These tactics work well without having to tarnish the brand in the long-term.

In the case of visibility/awareness, more budget should be allocated to advertising and promotions to drive traffic to an upgraded shop-in-shop design to make a good first impression on new shoppers.

Brands can also utilize data tools to evaluate their positive in a competitive landscape (examples include BrandIQ) and benchmark competitor SKUs, promos and pricing ahead of the online sales festival.

ecommerce holiday strategies

BrandIQ Marketplace Analytics & Digital Shelf Monitoring

Planning and approval of the pricing strategy for end year – final list of SKUs, pricing, bundles and GWPs – will take the longest time. The brand then needs to share this plan ahead of a ‘freezing period’ to let marketplaces like Lazada and Shopee evaluate and approve the campaigns. And relative to the e-marketplaces other seller applications, it will allocate site visibility.

2. Inventory & Stock

Once SKUs and pricing is set, brands need to ensure there is enough physical stock to meet the forecasted demand.

This requires scrubbing historical data, if available, and use proxy data points like offline channel sales if not.

With a forecast in place, products are ordered and inbounding slots at partner or brand fulfillment centers are reserved and dedicated to online sales. This should all be completed at minimum two weeks in advance.

Lastly, brands should set up automatic ‘out of stock’ triggers to receive emails and SMS whenever a product sells out. This can also be applied strategically to competitor SKUs too through tools like BrandIQ – this allows ecommerce store managers to respond with targeted pricing promotions whenever a key competitor SKU runs out.

ecommerce holiday strategies

Price change triggers in BrandIQ

3. Traffic Acquisition

A common dilemma faced by brands during sales season is whether or not to double down on marketing spend.

CPCs (cost-per-clicks) are typically higher during a period when other brands are prioritizing and spending aggressively on marketing. The idea behind this is returns tend to be higher too because of higher conversion rates resulting from more competitive SKUs, pricing and bundles.

If a brand can afford it, it’s recommended to increase spending during the sales season. In addition, a “warm-up” or teaser campaign prior to the big launch is also recommended and actually required by marketplaces like Lazada.

Brands also perform better when leveraging an existing customer email database or mobile phone list or building them using formats like Facebook Lead Ads well before the shopping season, when CPCs are still relatively low.

ecommerce holiday strategies

Facebook Lead Ads to build up email database ahead of the sales season

With this targeted database, brands can drive traffic during the sales campaign by sending emails or SMS to the list with promo codes to be used online during targeted dates.

While barter deals are more effective for brands to gain better on-site visibility, it’s also recommended to allocate budget to marketplace paid ads such as Lazada Sponsored Products and Shopee My Ads. These ad formats are still affordable compared to Facebook and Google ads and help acquire users when they’re already in a shopping mindset. They also help brands stand out on category pages as well as competitor product detail pages.

ecommerce holiday strategies

Shopee My Ads

But when multiple brands are fighting for the same site banner placements, exclusivity and doorbuster deals are prioritized by marketplaces over sponsored ads.

Beyond the typical Facebook and Google paid ads to drive traffic, brands can also look into non-conventional channels such as Quora Ads and Shopback. CPCs and CPAs (cost-per-acquisition) are often lower due to less competition.

4. Traffic Activation & Conversion

Driving traffic is not enough; they need to convert into sales. To do this, brands have several levers to pull.

First, upgrade to an official shop-in-shop format if not yet done already. Commission fees will increase but this format goes beyond just a badge as it improves product search ranks and peace of mind for shoppers worried about authentic goods.

Maybelline Official LazMall Shop-in-Shop on Lazada Thailand

High-conversion shop-in-shop layouts. Source: aCommerce Shop-in-Shop Design Gallery.

The typical customer journey on marketplaces goes from the shop-in-shop homepage → category pages → product detail pages (PDPs).

The product detail pages is where customers need to be incentivized to “add to cart”. PDP optimization requires descriptive and rich product titles, images, body content, etc.

ecommerce holiday strategies

NIVEA product detail page optimization

One important element of PDPs are customer ratings and reviews. Unfortunately, most reviews on marketplaces in Southeast Asia tend to be few and often, not very helpful. To acquire more high quality reviews, either connect the brand.com product reviews/ratings to the Lazada product page or if no brand.com exists, leverage tools such as ReviewIQ to generate more reviews for certain SKUs on Lazada and Shopee.

ecommerce holiday strategies

NIVEA customer reviews generated via ReviewIQ

Another driver for conversions is live chat offered by both Lazada and Shopee. This is a great opportunity to increase conversions, especially for more expensive or complex products that require product detail exchange between the buyer and the merchant.

With an estimated one-third of ecommerce transactions in Thailand happening through Instagram, Facebook and LINE, users have come to expect live chat in other B2C channels as well.

ecommerce holiday strategies

Lazada Thailand live chat

ecommerce holiday strategies

Shopee live chat

For brands selling directly to customers via their own brand.com sites, an abandoned cart email should be active to regain lost revenue as well as retargeting pixels to drop cookies for a retargeting campaign during and right after the mega sales period.

5. Customer Service

From a CS perspective, brands need to prepare their customer service team on best-selling product details, pricing and overall campaign. In addition, having a master FAQ document or wiki that’s circulated ahead of time will allow CS teams or a dedicated agent to operate more efficiently during the campaign period.

If allowed, brands may want to scale up CS staff with temporary labor accounting for the increase in demand during the sales period. This should be tied back to the demand forecast. Platforms like Helpster in Thailand and Indonesia offer brands an easy way to quickly ramp up temporary staff.

6. Monitoring

A large and often negative impact on a brand’s performance online is the abundance of grey market sellers that undercut product prices.

As marketplaces aren’t incentivized to remove grey sellers selling authentic products and will only delist pirated goods, brands can only focus on improving their own product selection, search rank and educating its consumers on its official online channels.

In addition to raising concerns to the marketplace on removing counterfeit goods, brands can use BrandIQ to track grey market SKUs or other brands that impact its promotions, e.g. Mimi Poko vs. Mamy Poko:

ecommerce holiday strategies

Mimi Poko on Lazada Thailand

7. Packaging

Packaging seems mundane in comparison to the other sales levers but it’s a customer touch point to increase repurchase rates. In addition to an eye-pleasing design and quality of the packaging itself, promotions via flyers or vouchers to drive follow-up actions such as cross-sell and up-sell.

ecommerce holiday strategies

Pedigree box design

8. Fulfillment & Delivery

Customers value packages to be delivered in a quick and efficient manner.

ecommerce holiday strategies

Lazada customer chat with merchant complaining about expected delivery times.

For brands to succeed here in the last mile, we recommend the following:

  • Organize the warehouse set up at least one week ahead of time – reserved inbound, outbound slots – to ensure delivery to customers within SLA
  • Give the warehouse the estimated order volume factoring in marketing, promotions, and competition well ahead of time
  • Prepare enough packaging material such as carton boxes, bubble wrap, packing foam, etc. to meet forecasted demand
  • Align with 3PLs to ensure its capabilities to pick up and deliver packages given the high volume
  • Prepare an on-demand delivery resource in case of over-capacity, e.g. LINEMAN, Grab Delivery

9. Business Operations

Ecommerce is a cross-functional, team-based effort, especially during the mega sales period where tight-knit coordination is the difference between hitting record highs or dropping the ball:

  • Set up war room dedicated to a cross-functional team that manages all operations during the campaign period. Prepare food because it’s going to be long stretches of day and night and weekends as 9.9 and 11.11 both happen on Sunday
  • The team needs to proactively monitor active campaigns during the day to ensure everything is synced properly, e.g. stock, price, etc. and may even needs to reply quickly to customer chats if CS is overwhelmed
  • Marketing and store managers to check all campaign landing pages after launch. Last thing needed is money spent on driving traffic to 404 pages
  • Debrief / post-mortem for the next big sale (right around the corner)

10. Website Stability

To avoid mishaps such as Amazon’s very own Prime Day meltdown, these tips apply only if a brand is running its own brand.com site, not marketplace shop-in-shop:

  • 2-3 weeks prior to peak period, perform a load test (also known as a stress test) to determine the traffic limits of your existing infrastructure setup. This will arm you with the knowledge of server limits and determine benchmark for an upgrade
  • Upgrade server processing power and network bandwidth 24-48 hours ahead of campaign day to be able to handle the spike in traffic
  • Test promotions, for sanity and determine if any loopholes
  • Enforce a code freeze period (no deployments) to reduce the risk of introducing bugs from new features during or prior to peak period
  • Prior to, communicate to web support teams to be readily available and on standby for peak trading. Hope for the best, prepare for the worse

But regardless of the above, performance will be determined by the right online channel for your brand or product category. Based on ecommerceIQ research, Shopee is a preferred platform by consumers for female-oriented categories like fashion and mom and baby items, whereas Lazada is preferred for categories such as electronics and home appliances.

Sign up here to download a Holiday Flash Sale preparation report.

Brands without inhouse ecommerce capabilities tend to work with ecommerce enablers to optimize their online performance. Contact us for a free consulting session: hello@ecommerceIQ.asia

I put out a survey two weeks back about ecommerce enablers to find out the sentiment towards these companies in ASEAN, if brands actually use them (why or why not), and areas where they believed partners could improve.

The answers I received were not what I expected.

60 percent of respondents reported using an “ecommerce enabler”, but given their answers, most didn’t understand the difference between a marketplace and an enabler.

ecommerceIQ

Very simply put, ecommerce enablers are service providers that help a brand execute its digital strategy through a one-stop solution. This solution encompasses content production, web platform optimization, performance marketing, technology to integrate all digital channels, all the way to customer care, fulfillment and/or delivering it to the end customer’s doorstep.

Ecommerce enablers provide a client with whatever it takes to sell successfully online.

Popular examples in Southeast Asia include: aCommerce, iCommerce, etc.

Lazada, Shopee, 11street are not ecommerce enablers, they are the platforms for businesses to sell on. Sure, they might lend a brand an account manager who periodically checks in but their goal is to push for lower product prices and exclusive channel promotions.

The marketplace is neither charging the business for this service or providing special treatment – if a better performing merchant comes along, it catches you later.

This is why Alibaba’s Tmall has its own list of Tmall Partners – specialised agencies that build functional stores for businesses on the Tmall platform. Tmall itself is not the enabler.

The same goes for marketing platforms such as MailChimp, payment gateways like Paypal and delivery companies like Kerry Express or NinjaVan – they may not be ecommerce enablers but they are important pieces of the ecommerce supply chain.

This distinction is vital to the growth of ecommerce in Southeast Asia, especially as most global brands – Samsung, Unilever, L’Oreal, etc. – are choosing to outsource their ecommerce BUs to other experts.

Why? Because inhouse teams aren’t sure how to structure themselves. Over 65 percent of global marketers feel teams are “somewhat integrated” or “broken out by channel”. For ecommerce to work, Marketing needs to align with Sales, and Service.

 

ecommerceIQ

But ecommerce isn’t a magical band-aid capable of fixing all problems – especially not corporate silos.

Aื FMCG industry leader recently asked me, “what is something you would do to improve my brand’s digital strategy?”

My reply?

“Establish internally what the business wants from ecommerce, who’s in charge of this division and the resources the business is willing to dedicate before even bothering to bring on an enabler. Without internal alignment, it becomes one inefficient mess and everyone ends up pulling hair.”

After working with some of the world’s top brands – Unilever, Microsoft, Reckitt Benckiser, Payless, Samsung – I’ve been fortunate enough to see how these well-oiled machines function and why it doesn’t necessarily work for ecommerce.

The beauty of digital is that it’s instantaneous, which is the complete opposite of how decisions are made in these enormous corporations. It’s new, it’s disruptive.

Online moves quickly and requires constant care because a store that never sleeps means inventory, pricing, recommendations, customer support need to be up to date 24/7. It gets even more complicated when the ecommerce enabler needs to manage a brand.com and a marketplace shop-in-shop (SIS).

What often gets overlooked by brands is the shift in power.

Dangling more visibility over the thousands of grey market and official sellers on its site, a marketplace will push aggressively for more deals, more exclusivity, more vouchers, now, now, yesterday, while the brand pushes back with the same tenacity, touting “channel conflict”, and scrambling to squeeze funds from other departments.

The brand finally ends up throwing paperwork at the problem two weeks past the deadline.

Who wins?

No one.

Certainly not the enabler.

How is it in 2018, we still don’t know how to do ecommerce?

As a marketplace, its job is to offer the best deals and shopping experience to customers to grab market share. It does this by subsidizing prices, and by nudging its merchants to sell more and offer exclusives.

As a brand, its job is to sell to as many customers as possible, keep its distributors civil, maintain brand consistency across channels and mitigate the amount of friction between departments. It does this by offering the same promotions to each channel partner, allocating resources in a democratic fashion and following processes to a tee.

As an ecommerce enabler, its job is to work with its client and ecommerce partners (marketplace, 3PL, payment gateways, etc.) to increase GMV by optimizing digital channels. It does this by executing on behalf of the brand a strong digital strategy, which sometimes means bartering with the marketplace for more visibility for its clients.

Ecommerce enablers are by far nowhere near perfect. Imagine a marriage counsellor trying to find compromise between two hot-headed and egotistic partners refusing to budge but still looking to have a long term relationship.

Oh, and sessions aren’t once a week, it’s an uphill climb everyday. This respondent hit it on the head when describing what they did not like about its enabler.

“Not mature business yet.”

While the concept of ecommerce is not new in the world, the execution, talent and best practices are still nascent in Southeast Asia.

Customers in APAC need education on ecommerce, a company’s ecommerce team in APAC needs education on how to work with other departments, and marketplaces in APAC are still figuring out how to be more like Alibaba and Amazon, two companies with over 10 years operating experience.

An ecommerce enabler is supposed to have all the answers. While a challenge to take on, especially in Southeast Asia, it’s a hot business with a lot to gain, and probably why ecommerce enablers have popped up all over Southeast Asia and India.

And it’s been somewhat positive for respondents using an enabler as majority would recommend it to a friend or colleague.

“Getting an ecommerce enabler should definitely be considered, regardless of what stage a business who wants or is doing ecommerce is in.”

“Allows me to focus on my core business capability and rest assured online segment is still moving along.”

ecommerceIQ

Now what?

Now that the distinction has been made between a marketplace, a payment gateway, a marketing tool and an ecommerce enabler who ties them all together, a business needs to decide whether it needs marriage counselling.

Is it more cost effective to invest and build a team to manage digital channels inhouse or outsource it to a third-party partner? The survey respondents listed reasons why they work with an enabler:

“Aligned with brand principal interest and cost effective”
“Short time to market, revenue growth”
“Strong communications, effective operations”

Now you’ve identified you need one, how do you choose an ecommerce enabler?

  • Assess the experience of its leaders – do they have a strong track record in high-performing digital businesses?
  • Assess the existing clientele – are you in a similar tier/size/industry?
  • Assess the company’s own digital footprint – their performance marketing will be telling of the performance marketing they do for you
  • Assess the scope of work – is the enabler incentivized to sell more for your business?

And now take a look at your own business and decide whether it’s ready to commit to ecommerce. Is there an efficient approval process in place for resource allocation and commercial sign off for digital channels? Is there a C-level stakeholder responsible for P&L?

If not, time to move fast because in the digital world, it’s either give all or risk losing a lot.

 

Want to build an ecommerce strategy in Southeast Asia or speak to an enabler? Send an email to hello@ecommerceIQ.asia or fill out the contact form below





*Thanks to a ecommerceIQ Community member for sharing the launch of LazMall with us:

In case you missed it, JD Central’s long awaited joint venture went live in Thailand a few days ago:

ecommerceIQ

And reviews have already come in,

ecommerceIQ

Though rough, the experience has been positive so far and as expected by JD, delivery reliable and quick. The partnership with Thailand’s largest retail conglomerate Central Group indicates JD.com is attempting to replicate its value proposition in China in Southeast Asia: a high quality ecommerce experience for authentic goods.

“If you promise people to deliver same day, people will more likely buy. Our people will literally cross rivers and climb mountains to get the package to the end customer.” – Louis Li, former Deputy GM of JD Worldwide

It seems Chinese players Alibaba and JD.com are looking to establish its number one and number two statuses in Southeast Asia ecommerce, respectively. Alibaba known for its hit-or-miss products at cheap prices and JD.com for the authentic goods and reliable customer experience.

And now that JD.com has planted its flag in Thailand, Alibaba/Lazada isn’t going to sit back casually – hence, (re)introducing LazMall.

ecommerceIQ

Consumer newsletter by Lazada Thailand

What is LazMall?

Very simply, it is a replica of the widely successful Tmall in China – a platform for official brands. In Lazada’s own words:

‘LazMall is an exclusive channel featuring items sold by leading international and local brands.’

“At LazMall, we aim to offer an online shopping experience of the highest-quality to garner the trust of our customers and provide the convenience they long for. LazMall will provide customers with the following promises: 100% authenticity and 15-day easy returns.”

There also appears to a number of benefits by becoming a LazMall seller:

• LazMall badge on all your products throughout the customer journey; see LazMall Indonesia
• Enjoy higher visibility on homepage and higher search ranking
• Exclusive access to dedicated LazMall campaigns
• Dedicated customer service team for LazMall customers

ecommerceIQ

Brand dashing to marketplace

Not quite.

Brands commonly will teeter with the idea of a brand.com and/or marketplace and the answer we always give is “a marketplace strategy is important in Southeast Asia as part of a bigger digital strategy, but it shouldn’t be the only online effort by a company.”

While LazMall aims to create a safe space for brands to promote themselves online by setting strict authenticity procedures and greater visibility over unofficial sellers, activity the US and China have taught us the brand relationship with a marketplace is a tricky one and from it emerges a power struggle.

A well-known American brand saw its Tmall sales plummet 10% to 20% for 2017.

“Based on our sales record, we should have been in a prominent position, but we were at the bottom of the page,” said the brand’s ecommerce director, who spoke anonymously to the Bangkok Post for fear of further retaliation. “That’s a clear manipulation of traffic. That’s a clear punishment.”

Executives soon learn that what Alibaba gives, it can also take away.

How did the marketplace gain so much power?

A few factors. First, all that money business tech sites complained about marketplaces burning was to grab market share and market share translates into influence. If you’re not present on marketplace or selling on your own website, you’re losing an important revenue channel.

As reported by the New York Times about Amazon, Lazada also has an advantage over traditional retailers and its own merchants that no one else has: knowledge and access to data from its platform. 70% of Amazon’s word searches are for generic terms such as “running shoes” or “games”, meaning Amazon can choose what to display in search results. Will it be Nike or Adidas shoes? Well, it probably depends on who is being a better merchant to the marketplace – driving traffic, exclusive promos, etc.

We can expect something similar to take place in Southeast Asia but this doesn’t necessarily mean brands are guaranteed to lose out.

KitchenAid recently launched with us and their revenue was two times than targets,’ – Lazada Singapore Category Manager

The rise of digital has forced brands used to having 100% control learn how to barter for maximum visibility. The birth of a brand to marketplace relationship is also why ecommerce enablers are popping up everywhere in Southeast Asia to mediate the wants and needs of both.

“[Enablers] allow me to focus on my core business capability and rest assured online segment is still moving along” – eIQ Community Member, Ecommerce Enabler survey

Your move brands.

Want to learn more about participating in LazMall? Contact us at hello@ecommerceIQ.asia