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For smaller brands in Southeast Asia dipping their toes in ecommerce for the first time, it’s usually easiest to start selling on an online marketplace such as Lazada, Wemall or MatahariMall before fully investing in a brand store. Being on multiple marketplaces can help new brands build brand awareness without having to stretch small budgets.

Smaller merchants often lack the in-house capabilities or industry know-how to successfully drive an ecommerce website of their own and a marketplace gives a young brand increased visibility that will eventually turn into conversions.

However, it can become difficult to manage a presence in a marketplace because each comes with its own set of regulations and restrictions. There is limited space in a ‘shop in shop’ for a brand to sell itself, which is why it’s vital that all product content is optimized to attract the interest of a browser. How?

Product content refers to product descriptions, size and quality of visuals, user generated content all the way to customer reviews. These components drive the user further down the shopping journey. Research conducted by Shotfarm shows that poor product content can harm your brand, majority of shoppers abandon their online shopping carts because the product isn’t what it appears to be, which is due to inaccurate or missing product images (26%) and product content (30%).

Charles Gourlaouen, General Manager of Channel Management at aCommerce, Southeast Asia’s leading ecommerce service provider, shares insights for helping brands compete with other merchants on leading marketplaces in the region.

The three product content staples:

1. Creating strong product descriptions (titles, content, benefits)

Fig.1 : Best practice for content optimization

From Fig.1, brands can see the ‘checklist’ on what marketplaces recommend to include when posting an item for sale. Often overlooked, it is crucial to include details such as shipping time, supplier name and warranty to legitimize the brand and give the potential customer a degree of trust.

Instead of simply describing the product, let’s say a phone, by color and size, include the product’s key functions such as the dual LED flash and having a fingerprint identification sensor. These details can make a product more valuable to a potential customer and differentiates it from the countless similar items that are also being sold on the marketplace. If a shopper needs to leave the page to search for more information, you are adding an additional step before purchase.

According to insights from Lazada, improving the product quality score—Lazada’s big data algorithm output that determines how high a product should rank on Lazada—would drive almost an immediate  3 to 5% increase of the conversion rate in Southeast Asian countries. The components of product quality includes content (title quality & richness of content), reviews and performance (click through rate & browsing time etc.)

How to create an effective title

Different categories have formulas that work best, depending on what kind of product they are. For example, laptop titles should be written as:

Brand + Model Number + PC Type + (Processor speed + MB of RAM + Hard Drive Size+ Optical Drive), but for cutlery, it should be written as Brand + Line + Size+ Product Type.

Below are examples of both:

  • Sony VAIO PCG-FRV25 Notebook (2.66-GHz Pentium 4, 512 MB RAM, 40 GB Hard Drive, DVD/CD-RW Drive)
  • Calphalon Professional Hard-Anodized 8-1/2-Quart Saucier with Lid

 

Use bullet points

Bullet points simplify your information, breaks it down effectively, and doesn’t make a potential customer have to reread your block paragraph three times – a key to a good user experience.Fig.2

Fig.2 is an example of how to effectively roll-out product descriptions on Lazada. By splitting a product’s key attributes into sub-headings and listing its details by bullet points, the reader has an easy time to digest the information.

Constructing strong product copy

When trying to persuade a browser to purchase your product, it is advisable to lead with its benefits. A browser may be less inclined to purchase if all they read are technical specifications, color options and so forth. A curious browser would want to know why they should buy this product, what will they get out of it?

For example, if you’re selling a multi-device charger, build a picture of going somewhere with three devices and the added convenience of being able to charge them all at once.

The main content body should be informative but kept short and concise. Product descriptions should not be treated as a blog. (see fig.3).

Fig.3 La Roche Posay on Lazada, product content

Premium skincare brand La Roche Posay includes a wealth of product centric content to educate potential consumers. For example, it includes tips & tricks and insider information about the product type being viewed. The brand also includes skincare advice from medical professional and skincare experts to legitimize its product.

It is also advisable to curate original content rather than replicate existing or generic copy. Reusing a manufacturer or competitor’s product content will hurt your brand’s rankings when it comes to search engine results.

Strong product content versus weak product content

Strong

What makes this content strong?

  • Detailed, personalized product description
  • Key breakdown of product features with description
  • Supporting images to showcase product features (more than one)

Weak

What makes this content weak?

  • Long, disjointed product title
  • Disjointed sentences with spelling errors
  • No content, just specifications of product. The description is not engaging for potential buyers

2. What makes a good product image?

Read any brand guideline provided by a marketplace like Amazon, Lazada or MatahariMall and it will specify that a brand should optimize product images for the best results. At aCommerce, brand commerce experts take clients through each marketplace’s specific criteria to ensure product photos meet required image clarity and dimensions.

A way to tackle a high cart abandonment rate is through optimized product images.

Quick pointers to optimizing product images on Lazada

  • If possible, always include multi-angle view of product
  • If possible, always include a zoom option
  • Can have up to eight images for one product
  • Image measurements: the main product image must have the size of at least 600 x 600 pixels and at most 2000 x 2000 pixels.
  • Secondary images must have the size of at least 450 x 450 pixels and at most 2000 x 2000 pixels.
  • At least 85% of the frame should be filled with the product image
  • No text, borders, reflection or additional logos on the image
  • Image is clear, sharp and not pixelated
  • Item should not be cropped
  • Product against a clean white background

Fig.4 Maybelline offers multi-angle product views on Lazada

One of aCommerce clients such as Maybelline cosmetics effectively showcases its product content on Lazada. From multi-views of its products, it also offers a zoom function that allows a customer to have a close up look at product texture, particularly important when buying something such as cosmetics.

A particularly good brand page would also include the available colors of the product and additional images of the product packaging.

3. Leveraging authentic user reviews to enhance brand reputation

We’ve all been guilty of being influenced by product reviews. No matter how convincing a brand’s testimonial of its products, we tend to be receptive to other people’s opinions. 25% of those surveyed in PwC’s research “Total retail SEA 2016” showed that respondents always read product reviews before making a purchase.

In a survey conducted in the United States, 88% of respondents admitted to trusting a review like they would a personal recommendation. Positive reviews and rankings can increase your brand’s product ranking, hereby increasing your influence in a marketplace.

For smaller brands, who’s to say that you did not ask a friend or a family member to put in a good word about your product online?

There are certain ways for a brand to establish a good relationship with its customers. For example, a smaller brand with a growing following should concentrate on establishing a strong following in the beginning. After a purchase, a brand can email the customer with a review request.

Another tip to generate authentic reviews is to reach out to influencers on social media or encourage the usage of brand-centric hashtags such as #MyKiehls. These reviews can be re-posted on your page (if the marketplace allows) to enhance your brand’s visibility on social media channels.

Marketplaces are usually the first step to a digital strategy and increased brand visibility for online sellers. Despite its benefits, being on a marketplace means that a brand, no matter how big or small, would have to share the spotlight with competitors alike. For new brands lacking ecommerce expertise, it is particularly important to ensure that your brand stands out through effective, trustworthy and legitimate content. Win the marketplace.

INSIGHTS PROVIDED BY CHARLES GOURLAOUEN, GENERAL MANAGER, CHANNEL MANAGEMENT, ACOMMERCE

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


We’d love to hear your feedback,
find us on Facebook, LinkedIn or Twitter.

 

Following in the footsteps of China and the U.S., Southeast Asia is on the cusp of an ecommerce golden age. With online shopping accounting for only 1 percent of retail today, the region is slated to reach double-digit China-esque numbers within the next 4-5 years.

With a population of 600 million — twice that of the U.S. — Southeast Asia is poised to eventually become the third-largest ecommerce market in the world, second only to China and India (and ultimately surpassing the U.S.).

But enough of the macro overview. How did 2015 turn out? And what will 2016 bring to ecommerce?

Local, regional and global players stepped up their games. In particular, we saw Indonesia rise this year: MatahariMall launched with big fanfare as the nationalist answer to Rocket Internet’s Lazada; Lazada, in turn, doubled-down on Indonesia with the return of previous CEO Magnus Ekbom; for the first time, aCommerce Indonesia surpassed Thailand in order volume; and, recently, China’s Alibaba competitor JD snuck into Indonesia and surprised everyone with the launch of JD.id. This has served to add to an immense amount of pressure and competitiveness in the pure B2C space.

2015 also was the year of M&As, as other players allied together or were absorbed in order to arm themselves against the behemoths mentioned above. First, Ardent Capital-backed WhatsNew acquired lifestyle vertical site Moxy in Thailand in January.

More recently, we witnessed an encouraging ecommerce exit as beauty site Luxola was acquired by French luxury superstar LVMH. And in December, aCommerce gave a 20 percent stake to a 150-year-old Swiss retail distributor, giving it access to more than a hundred of its Western brands and physical infrastructure in the region.

Unfortunately, the year did not pass without its share of casualties due to the hyper-competition in B2C ecommerce in Southeast Asia. Fashion retailer Paraplou Group shut down in October after two years (and having raised $1.5 million) due to lack of focus and deep pockets.

In March, SingPost and Indonesia’s mobile phone retailer Trikomsel announced a mysterious ecommerce partnership — only to have reports pop-up of the telco’s dire financial situation three months later, in addition to the sudden removal of Wolfgang Baier as Group CEO of SingPost in December.

If 2014 was the year of unprecedented capital injections to build Southeast Asian ecommerce businesses, 2015 was the year we saw the early rise, fall and transmogrification of players in the fragmented landscape as they vied for a piece of the rapidly growing ecommerce pie.

We expect to see serious movement in the region from offline players moving online.

In line with our annual tradition, we are giving you a sneak peek at what will be on the menu for next year. The conclusions were determined through extensive investor and executive interviews, as well as internal data and secondary sources from January 2015 to December 2015.

Because we work for a major Southeast Asian service provider, with the biggest ecommerce names in the region (such as Lazada, MatahariMall, L’Oreal and more), we are privileged to sit at the intersection of tech, logistics, retail, marketing and VC. We see where our partners are putting their money and where the investors are willing to follow.

As such, we are able to see with acuity where the growth will be. There’s no crystal ball or trusting a gut feeling here; we simply have the privilege of a bird’s-eye view that most players don’t have, and we’re providing projections here in the form of predictions.

1. Brand.com Is Poised To Be The New Black

The evolution of ecommerce commonly follows the trajectory of P2P and C2C to B2C to eventually Brand.com. The U.S. went from Craigslist and eBay to Amazon to brand sites like Nike, J.Crew and Gap. China went from Taobao to Tmall and JD to the many standalone and marketplace brand sites, like Estee Lauder, Burberry and Coach.

Today’s Southeast Asia is following a similar pattern, yet at a much faster pace due to “1 to n,” horizontal progress and the resulting leapfrogging behavior. In our region, we have P2P (OLX), C2C (Rakuten, Tokopedia, Shopee), B2C (Lazada, Zalora, MatahariMall) and Brand.com (L’Oreal, Estee Lauder) all happening at once within a very short time frame.

Even Unilever in Thailand has created an ecommerce division with revenue targets they expect to start hitting in 2016. We are seeing brands going online much earlier than one would normally expect.

It was no big surprise, then, when aCommerce recently landed a strategic investment from Asia’s biggest retail distributor, DKSH. Swiss-based DKSH owns distribution rights for some of the biggest brands in the region, such as P&G, Unilever and Johnson & Johnson.

This partnership validates the growing demand for brand ecommerce in the region, and will further expedite the process at which brands go online, whether on their own brand sites or on the many marketplaces in Southeast Asia.

10 Trends That Will Shape Southeast Asian Ecommerce in 2016

2. Omni-Channel Awakens: “There Will Be No More Ecommerce, Only Commerce”

This is what aCommerce Group CEO Paul Srivorakul said when ecommerce logistics player SingPost announced it would create a futuristic mall that combined online and offline shopping, in pursuit of the omni-channel retail dream — a dream that is quickly becoming a reality in the U.S. and China.

Referring to a seamless shopping experience across stores and the online channel, omni-channel retail is considered the elusive Holy Grail in retailing due to the politics and logistical challenges of integrating often independent online channels with their brick-and-mortar counterparts. But so far, Southeast Asia has been late to the game, with its focus (reasonably so) on building up pure-play ecommerce first.

In 2016, we expect to see serious movement in the region from offline players moving online, and vice versa. 2016 will be the year in which offline brands will go online due to the plethora of online marketplaces available, as well as the presence of full-service ecommerce enablers.

Southeast Asia is on the cusp of an ecommerce golden age.

For B2C players, the appeal of adding offline operations to the mix includes enabling faster last-mile fulfillment and delivery. In Southeast Asia, Vietnamese electronics retailer Nguyen Kim (acquired by Central Group) is able to pull off same-day, 4-hour deliveries because of the massive offline retail footprint it has.

Ecommerce players with a traditional offline arm, such as MatahariMall, Cdiscount and Central, will be in an advantageous position to execute on this. However, 2016 will also have B2C pure players looking into this, as logistics and last-mile in Southeast Asia increasingly struggles with industry-wide capacity bottlenecks.

10 Trends That Will Shape Southeast Asian Ecommerce in 2016

3. Niche-Commerce Models Will Evolve To Avoid The B2C Bloodbath

In our 2015 predictions, we discussed how B2C ecommerce is a long-term, cash-intensive, winner-takes-all game. Companies trying to battle it out in this space better have deep pockets (see Lazada, MatahariMall, and JD) — or face extinction (see Paraplou Group).

In his seminal essay “Ecommerce is a Bear,” Andy Dunn, founder and chairman of Bonobos.com, elaborates on why B2C ecommerce is a winner-takes-all game, and what options remain for other players who don’t have the luxury of deep pockets or a sugar daddy.

Much of this comes down to a “David versus Goliath,” Peter Thiel-esque contrarian approach to ecommerce. The U.S. ecommerce scene has been dominated long enough by Amazon to witness some of these models coming to fruition over the last several years: 1) Proprietary Pricing (think flash sale, Gilt Groupe), 2) Proprietary Selection (ModCloth, NastyGal), 3) Proprietary Experience (Rent the Runway, Birchbox), and 4) Proprietary Merchandise (Warby Parker, Bonobos).

This will be the year where more creative ecommerce models emerge. Companies like Pomelo and Sale Stock Indonesia have already adopted the proprietary merchandise approach toward achieving a competitive advantage. They do this by designing their own fashion and gradually moving upstream to include manufacturing.

Moxy has staked their flag as the “Everything Store,” but focused on women. We also may see the return of subscription-commerce business models with retailers like Central, impacted by a dip in foreign shoppers, seriously considering a Gilt-style flash sales model to get rid of excess inventory.

10 Trends That Will Shape Southeast Asian Ecommerce in 2016

4. Cross-Border Ecommerce Will Be Driven By Silk Road 2.0, Not AEC

Despite all the media hype and lofty expectations (even our own predictions last year), the ASEAN Economic Community (AEC) will not have a significant impact on ecommerce in 2016.

Governments are too fragmented on policy; coupled with the immediate growth opportunity within the domestic markets, it doesn’t make sense to focus on cross-border within ASEAN, as evidenced by companies such as Lazada and MatahariMall doubling-down on Indonesia’s ecommerce opportunity.

Cross-border ecommerce in 2016 will be driven mainly by what we call “Silk Road 2.0.” These are Greater China-based companies that will bring their products into Southeast Asia, laying the foundation for our generation’s version of the Silk Road and attempting to expand China’s soft power and hegemony through commerce and digital.

Southeast Asia is poised to eventually become the third-largest ecommerce market in the world.

China’s JD is a classic example. The No. 2 online retailer in China just recently set up shop in Indonesia and will be expected to leverage their 40+ million SKU product assortment and China-Southeast Asia supply chain to compete with the likes of MatahariMall and Lazada. Alibaba investing almost half a billion into SingPost clears the way for Alibaba, Tmall and Taobao packages to smoothly enter Southeast Asia.

5. Payments: COD Will Continue Its Reign While Third-Party Payments Struggle

The next double-digit billion dollar opportunity in Southeast Asia ecommerce is the third-party online payment space. U.S. has PayPal and China has AliPay; what does Southeast Asia have?

Contrary to what many people believe, building a successful payment product isn’t about technology, it’s about distribution. Payment technology is a commodity; everyone’s building the same thing, including banks (SCB UP2ME), telcos (TrueMoney, PAYSBUY), media (Line Pay, AirPay by Garena), retailers (helloPay by Lazada) and payment-focused startups (2C2P, Omise).

The hard part is distribution. How do you reach critical mass in order to cruise off network effects? Until this happens, COD will remain the dominant payment method in Southeast Asia. Based on aCommerce’s latest aggregated numbers, COD made up 74 percent of transactions in Southeast Asia, up from 53 percent the year prior. This validates the importance of COD to ecommerce in our region, and already exceeds the COD penetration rate at the height of its popularity in China back in 2008.

Eventually, COD will naturally reach its shelf life and be replaced by a “modern” third-party online payment product. Even then, the most likely scenario will be one leading payment product per country in Southeast Asia due to the region being fragmented.

Until then, good luck “killing off” cash on delivery, Mr. Jon Sugihara.

6. The Fizzle Of Fast Fashion E-Tailers

We’ll see mass, fast-fashion players like Zalora struggle and either fizzle out or be rolled into cousin Lazada. People familiar with the history of ecommerce in China will see similarities between Zalora and VANCL. VANCL, a mono-brand fast-fashion retailer founded by Chen Nian (who sold his previous business, Joyo, to Amazon), rose to prominence in 2009, raised up to $570 million and even planned for an IPO, but then gradually faded away. Selling your own fashion products is less about retail economics and much more about brand building.

In addition, VANCL suffered from competition from Taobao merchants who sold similar products for higher quality at lower prices. Replace Taobao with Instagram and Facebook and you’ll understand the pain that Zalora and other mono-brand, mass-fashion retailers are going through in Southeast Asia.

Ecommerce companies need to understand that this is a long-term game.

Following the natural progression of ecommerce, fashion will start becoming a more popular category for online shoppers, especially with the rise of richer female consumers in Southeast Asia. Fashion brands currently have the choice of selling on the many marketplaces in Southeast Asia and/or selling via their own brand sites. We’ll expect them to set up shop on their own brand sites or specialized, fashion-friendly marketplaces.

However, premium fashion brands may be hesitant to set up shop on mass marketplaces like Lazada and Rakuten because of the risk of being perceived as a mass brand. After many years of courting fashion and luxury brands, Amazon is still struggling. Don’t forget, most of Amazon’s premium fashion sales today are generated via Shopbop, a fashion-only destination that the company acquired in 2006.

7. New Channels Will Emerge To Challenge Google And Facebook’s Dark Side

When you’re digging for gold in the remaining ecommerce gold rush on the planet, you better be equipped with the best picks and shovels available. Unfortunately for ecommerce players in our market, the range of weapons available is quite limited due to historical and socio-economic factors unique to Southeast Asia. The appearance of a “no-tail” landscape in terms of publishers severely hampers the effectiveness of traditional tools, such as affiliate marketing and programmatic display.

In Southeast Asia, players are already exhausting the “usual suspect” channels, such as Google Search, Facebook and Criteo, with the result being CPCs rising to all-time highs and companies tapping into offline marketing to seek better returns. This is Andrew Chen’s “Law of Shitty Clickthroughs” in full effect.

Companies and savvy entrepreneurs will start addressing this gap by designing and building new demand-generation platforms to offer an alternative to the Googles and Facebooks out there. Expect to see more ecommerce firms adding channels such as price comparison, coupon sites and cash-back sites, as well as innovative affiliate marketing solutions to balance their media mix. 2016 will give us the excavators and bulldozers to complement today’s picks and shovels.

8. The Battle For The Last Mile Continues As 3PLs Fail To Adapt

In 2016, we will see companies like Lazada (LEX), MatahariMall and aCommerce investing in building out their own delivery fleet in order to help relieve the industry-wide capacity issues and serve the anticipated record-breaking transaction volume. The pressure will only become bigger in 2016 as transaction volume is expected to hit record highs in Southeast Asia.

Challenges with last-mile delivery in Southeast Asia, if not addressed properly, will become the biggest bottleneck to ecommerce growth in the region. The industry is currently witnessing industry-wide capacity bottlenecks beyond what the JNEs, Kerry Logistics and DHLs of this world are able to handle.

Part of this is the poor infrastructure to begin with. China, the world’s largest ecommerce market, never really had this issue because of the socialist and central government mindset of prioritizing infrastructure investments. By the time ecommerce took off, the infrastructure was already there, which resulted in last-mile delivery becoming a commodity service.

Also, many existing delivery companies were never built for B2C deliveries to begin with. Their core competencies are in B2B deliveries, which typically don’t face B2C headaches, like returns management, reverse logistics, pre-calling, multiple delivery attempts and cash on delivery.

10 Trends That Will Shape Southeast Asian Ecommerce in 2016

9. Channel Management Will Be The New “Programmatic” Ad Agencies Still Stuck In 2011

Year in, year out, brand advertisers, agencies and adtech sales execs rave about programmatic display advertising and DSPs being the future of digital marketing. However, few actually have been outside their ivory tower in Singapore long enough to realize that “no-tail” has essentially killed off any promise of “programmatic” advertising in Southeast Asia outside of Singapore and Malaysia.

The real “programmatic” opportunity in Southeast Asia will be in ecommerce, not in display advertising. With the advent and fragmentation of online marketplaces, the challenge for brands will be to choose on which channels to be present and what products to push in each of these channels.

One of the biggest issues faced by all ecommerce players in Southeast Asia is the lack of talent.

2016 will see the emergence and adoption of next-generation channel management platforms, which are essentially “ecommerce DSPs.” These products will help brands enable omni-channel retailing across all major marketplaces, while also offering traditional programmatic benefits such as a dynamic optimization engine and plug-and-play integration with multiple first- and third-party data sources for better targeting, personalization and optimization.

10. The Talent War Will Inflate Salaries Faster Than Uber’s Valuation

One of the biggest issues faced by all ecommerce players in Southeast Asia is the lack of talent. In 2015, it was common to see employees being poached left and right with new salaries of 1.5-3x. Obviously, this isn’t sustainable, but it is the current foundation of the talent war in Southeast Asia.

Opportunistic professionals, often young, jump to roles where their skills, experience and leadership don’t match the package and title. “The most important thing to optimize for on your first job is growth. Growth is king, queen, and emperor combined. Optimize for growth above compensation, above location, above lifestyle, and above anything else,” says Auren Hoffman, former LiveRamp CEO who founded and sold five companies.

Ecommerce companies need to understand that despite all of us being in the midst of a Gold Rush, this is a long-term game. To attract and retain the best talent, more and more ecommerce companies will be buckling down on culture and building an appealing work environment. aCommerce in 2016 will be relocating its headquarters to the Ecommerce Valley of Bangkok — Emquartier (also home to Lazada’s regional headquarters).

11. Amazon Will Enter Southeast Asia

Not. Sorry, Jeff.

By Sheji Ho & Felicia Moursalien

Please share your feedback to @ecomIQ@sheji_acommerce and @LilFel

This article originally appeared on TechCrunch Dec 24.