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The ecommerce world today is all about data. It’s not a nice-to-have but rather a must-have. Why? Because the richer the data, the better the decision brands make.

Collecting data is easy when brands have their own ecommerce website or what we call 1st party data. Some channel partners do share their data to a certain extent, that’s called 2nd party data. The 3rd party data, which is a set of data collected from sources by a company that isn’t directly involved in the transaction, will help brands drive successful action and increase their ecommerce sales.

Types of data in today’s ecommerce world; BrandIQ

Brands in Southeast Asia are accustomed to ‘surveyed data’, but have a limited amount of data from online marketplaces, so much so that it is insufficient for them to craft a successful online marketplace strategy.

BrandIQ is envisioned to provide brands in Southeast Asia with measurable data and actionable insights for their online commerce strategy. Using sophisticated ecommerce data collection and proprietary machine learning technologies, BrandIQ will empower brands to monitor online merchandise, analyze competitors, offer better promotions, understand consumer sentiments, and improve the overall ecommerce experience.

When 4Ps is not enough. BrandIQ Analytics will be able to provide brands the data and insights across 9Ps; BrandIQ

At Okura Prestige Bangkok, three brands – Beiersdorf, Kimberly Clark, and L’Oreal, were brought together by BrandIQ to discuss and share their experience about the growing influence of data usage and user-generated reviews.

From left: aCommerce’s Group Director of Product, Poonpat Wattanavinit as the moderator, and panelists: Praponsak Kumpolpun, Senior Ecommerce Manager, L’Oreal CPD Thailand, Aviroot Prasitnarit, Sales Director – Kimberly Clark Thailand, and Phunnapa, Limtansakul, Senior Ecommerce Manager SEA – Beiersdorf Thailand

This is what was discussed:

Keep your Friends Close, Your Enemy Closer

By having an understanding of your competitor’s movement, brands can gain a significant advantage to help guide its own pricing and marketing strategy.

Tracking your competitor can be easily done offline, especially the price. Brands can simply send an intern to take note of the price. In the country’s FMCG industry, prices change every two weeks. Online channels? Every minute.

“Unlike offline, monitoring our competitors’ online movement is extremely challenging. Promotions are constantly changing and without a proper tool, it is impossible for a human to keep up,” says Aviroot Prasitnarit, Sales, Kimberly Clark. “My team once woke up to a surprise that our competitor could perform really well overnight because of its flash sales at 10 PM. None of my team members was standing by to track that.”

Being in the competitive FMCG industry, Kimberly Clark aims for a double-digit growth. Therefore, taking up more market share from its competitor is very important to Aviroot. So when it comes to price, Aviroot suggests keeping friends close, enemies closer.

In addition to direct competitors, brands should also be aware that grey sellers on the online marketplace can be a threat. According to BrandIQ, 35% of e-marketplace sales happen through grey sellers. This should raise a concern among brands because not only can grey sellers take away your share on an online marketplace, brands will not be able to create a unified brand experience.

Because at the end of the day, consumers will not differentiate if the sellers are grey, authorized or official. They will perceive it as one brand.

The New Rising Star: Nano Influencer

Besides price, reviews and ratings are also important for L’Oreal Thailand where the cosmetic industry is a “Red Hot Ocean”, according to Praponsak Kumpolpun, Senior eCommerce Manager, L’Oreal CPD Thailand.

“Thailand has many strong local beauty brands that are 40-50% cheaper than L’Oreal with roughly the same quality. So monitoring 4Ps (Price, Product, People, Place) is not enough.”

BrandIQ also found that the FMCG category has almost 70,000 reviews with most comments regarding the quality and speed of delivery. This is because FMCG has a “need it now” characteristic, making consumers very sensitive to delivery lead-time.

The number of reviews versus % of reviews that are about delivery across the categories on Thailand’s leading online marketplace; BrandIQ

Aviroot also added that a survey conducted by his team revealed that commercials on televisions are not convincing for consumers today. 80% of respondents also say they’d rather listen to recommendations of their friends and family. This is where the concept of nano influencers comes in.

Influencer marketing is not new in Southeast Asia. Around 40% of companies’ social media advertising spending has been allocated to influencer marketing in Thailand, up from 15% three years ago. Thailand, being the home to 57 million active Internet users, consumers are fairly familiar with social media. Seeing the success of established influencers and bloggers in the industry, many could not help but aspire to be one, in hope to enjoy the perks brands offer; overseas trips, free products, and a large amount of side income.

The trend to become influencers made the social web of today home to a millennial digital entrepreneurial society. Brands make a good use of it by handpicking matured ambassadors, ready to promote their values, from the army of new social influencers.

“Whether they are macro, micro, nano, influencers play a big part in convincing the digital consumers. Knowing that Nano influencer is new to the market, I think it is a big opportunity that brands should start considering.” – Phunnapa, Limtansakul, Senior Ecommerce Manager SEA – Beiersdorf Thailand.

What Can Brands Take Away from This?

Time and again, brands are constantly curious about two things: what is my competitor doing? How do my consumers feel? As ecommerce and social media become a bigger part of consumers’ daily lives, brands are looking for ways to gather data and gain insights from platforms such as Lazada and Shopee as a rich and dynamic data set.

The metrics that BrandIQ will be able to offer to brands.

And the metrics that brands should start paying more attention to, tools like BrandIQ will be able to track and analyze consumer behavior and sentiment on marketplaces, in addition to tracking their own performance as well as benchmarking against competitors selling similar products.

Interested in monitoring your competitor? Get BrandIQ’s free trial here.

As the ecommerce trend continues in Southeast Asia, a wave of the new generation of moms is joining the party. These moms are relying more and more on online to help them embrace their role as a parent.

Millennial moms expressed their dependency on online for their shopping journey, especially for the Mom & Baby category, during an ecommerceIQ panel session in Jakarta earlier this month.

ecommerceIQ surveyed 1,144 Indonesian moms with results showing that 66% have attempted to purchase Mom & Baby products online. Shopee was voted as the most popular e-marketplace for this category, followed by Lazada and Tokopedia.

Mom & Baby Indonesia Online Shoppers

aCommerce Group CMO Sheji Ho on stage presenting the findings from ecommerceIQ’s report: Digital Profile Mom & Baby Shoppers in Indonesia.

Indonesian actress and Miss Universe 2007 finalist Agni Pratishta was one of the panelists at the event. She agreed with the findings and also mentioned that most women visit numerous websites to find the best deals.

“I have a group chat with other moms where we exchange information regarding which e-marketplace is having a sale right now,” admitted Agni.

Agni was joined in the panel session with the Head of Marketing Baby Care from Softex Indonesia, Wenny Damayanti, and aCommerce Group CMO Sheji Ho to shed light on the current landscape comprising Mom & Baby online shoppers in Indonesia.

What else did we discover from the event?

Panel session during ecommerceIQ event in Jakarta with Agni Pratistha (middle) and Wenny Damayanti (right).

Indonesian moms shop cautiously online

When Indonesian moms were asked about their favorite online shopping platforms, brand websites did not feature much in their answers, with only Mothercare Indonesia appearing on the radar at a score of 4%.

Digging deeper, the result is most likely related to the type of products they are more likely to buy online in this category. Following general ecommerce trends in the country, Baby Clothing (49%) ranked as the most popular product purchased online in this category, followed by Baby Gear (23%) and Toys (18%).

Mom & Baby Indonesia Online Shoppers

Top products purchased online in Mom & Baby category in Indonesia; ecommerceIQ Mom & Baby Customer Survey in Indonesia (2018)

Meanwhile, perishable goods like Baby Personal Care and Baby Food are less popular and the cause of it is rooted in the main reasons why Indonesian moms don’t shop for this category online.

Mom & Baby Indonesia Online Shoppers

Top reasons for consumers to not shop for Mom & Baby products online; ecommerceIQ Mom & Baby Customer Survey in Indonesia (2018)

More conviction is necessary for consumers to purchase perishable goods online; moms require full assurance of product quality, and one way to avoid buying counterfeit products in the e-marketplace is to purchase only from brands’ official online flagship stores.

The top three consumer-favorite platforms all benefit from their official brand-dedicated portal inside their platform.

Mom & Baby Indonesia Online Shoppers

Tokopedia’s dedicated page for brands’ official store; Tokopedia

The importance of word-of-mouth in the digital world

Brands should always take cues from its consumers to adjust and hone their retail strategy. These include instilling customer confidence to overcome the reservations mentioned above. Wenny revealed that internet habits of millennial mothers provided the driving force for Sweety’s shift to digital.

“These moms are constantly searching for information online. TV commercials alone are no longer sufficient. Modern day moms use the internet to talk to their friends, surf for product information and read customer reviews before deciding which products to buy. Sweety took these cues onboard and redefined its online strategy,” explained Wenny.

Sweety’s official flagship store is offering online exclusive offer on ShopeeMall Indonesia.

Product reviews are a key aspect for Indonesian moms to overcome the wariness of doing their shopping online, as seconded by Agni

“Reviews are the make or break point for me when I shop online. When I see a product in e-marketplace with no review, even if the price is right, I wouldn’t risk buying it most of the time.”

Unfortunately, leaving a product review is not a habit mastered by Southeast Asian consumers yet, especially compared to consumers in developed ecommerce market like the US. And most of the time, Southeast Asians are prone to leave only bad reviews as a way to express their dissatisfaction and to caution other consumers.

Brands must concentrate on encouraging satisfied consumers to be more proactive and do the same. Some brands have utilized user-generated content platforms like ReviewIQ to help with the problem. Nivea, for example, achieved an increase in the number of positive reviews with the help of ReviewIQ from real consumers for its flagship store on Lazada Thailand.

“At this stage, brands still need to incentivize satisfied consumers to help generate good, organic reviews,” says Sheji.

How should Mom & Baby brands go about online?

Sheji stresses the importance of brands understanding the nature of their products and their primary objective to determine the optimal online strategy.

“If your products fall into the luxury category, you might as well sell it on your brand website to retain the full control of your channel. However, this strategy requires you to invest extensively in bringing in traffic,” advised Sheji.

But having a website also means owning a proprietary media channel that can be used for marketing and educational purposes. Brands like Sweety and Frisian Flag, for example, use their sites to connect offline promotion with the online audience as well as equip consumers with detailed product information.

For most brands, however, if the objective is to diversify sales channels, then opening an official flagship store on an e-marketplace like Shopee or Lazada is sufficient and also easier to maintain, while providing access to a broader online consumer base.

Drawing on her extensive experience in promoting Sweety to e-marketplaces, Wenny opined that prioritizing e-marketplace sales avenues is paramount for success. Especially in Indonesia where consumers are presented with many options, and competition between e-marketplaces is high, brands often feel the needs to have ubiquitous footprints.

Wenny summed up, “Choosing the right e-marketplace is an important step in the online expansion. Selection must consider the available audience, while also ensuring that the e-marketplace’s infrastructure is compatible with the business.”

Get the full report of Digital Mom & Baby Shoppers Profile here.

Appearance matters — which is why there are more people purchasing beauty items each year in Thailand. The country’s Cosmetics and Personal Care market is expected to grow 7.7% annually, and with the changing lifestyle that the country’s increasing internet penetration brings, more Thai consumers are turning to online to purchase beauty products.

Why do Thai consumers buy beauty products from online stores

Data from ecommerceIQ Beauty Survey Thailand 2018 shows price is an important factor as 25% of the total 1,874 respondents answered discounts as the top reason to shop beauty products online. Free delivery (24%) followed closely as the second reason.

Figure 1: Reasons why Thai consumers prefer buying beauty products online; ecommerceIQ Beauty Survey Thailand 2018

As the rule of thumb in developing markets like Southeast Asia, including Thailand, consumers tend to be price sensitive.

The Bank of Thailand (BOT) reports that the average salary in the country is approximately 13,789 baht, in line with our report where 35% of our respondents’ monthly income is less than THB 18,000. As such, it’s no surprise why most Thais prefer things that are either free or low-priced, especially for items that aren’t daily necessities.

Figure 2: Average wage categorized by occupation (in baht) in Q2 2018; Bank of Thailand

In addition to price and free delivery, having a wider product selection (19%) is another reason for consumers to purchase beauty products online, most likely due to the lack of offline footprint outside the Metro area. And unlike brick-and-mortar stores, consumers can view and compare a wide array of brands offering similar products in one sitting, allowing them to purchase the cheapest item available in the market in no time.

What beauty items are purchased online?

In general, Thais mostly shop online for skin care products (31%) and color cosmetics (31%), possibly due to high product availability and exclusivity online. Understandably, color cosmetics are mostly purchased by female, while males and third-gender individuals mainly purchase men’s grooming products online.

Figure 3: The category of beauty products purchased by Thai online consumer, depending on gender; ecommerceIQ Beauty Survey Thailand 2018

There are a couple of reasons why color cosmetics are popular among Thai online shoppers. First, there’s sufficient product information for color cosmetics available on the internet, whether it’s from beauty bloggers and vloggers, or product reviews from the consumers.

Figure 4: Search results for make-up tutorial videos on YouTube; YouTube

36% of our respondents say the lack of touch and trial is their main reason why they don’t buy beauty products online. Therefore, the availability of comprehensive product information online might help them overcome the need for having to try it out beforehand.

Figure 5: Top 5 reasons why Thai consumers don’t buy beauty products online; ecommerceIQ Beauty Survey Thailand 2018

Another reason is because color cosmetics are usually priced on a much lower range than other beauty product categories. For price-sensitive societies like Thais, they’re more likely to only shop on affordable products like color cosmetics. This is also supported by our survey findings where over 50% of Thais only spend less than 1,500 baht for beauty products.

Figure 6: The average order value Thais are willing to spend on beauty products in both online and offline channels; ecommerceIQ Beauty Survey Thailand 2018

Where do most Thai shoppers buy their beauty products?

For online purchases, most Thais choose to shop on Lazada (30%) and Shopee (27%), the two biggest ecommerce platforms in Southeast Asia. In line with the top reasons to shop this category online, the two websites are chosen for the many discounts they offer (34%) and because consumers find it convenient to shop on these platforms (35%) as they’re already familiar with the sites.


Figure 7: The online channels Thai online consumers usually buy beauty products from; ecommerceIQ Beauty Survey Thailand 2018

Figure 8: A price promotion banner on the homepage of Lazada Thailand

What does this mean for beauty brands in Thailand?

Generally, Thai consumers aren’t loyal towards a specific brand and are willing to try out other brands. Over 57% of consumers cited looking for variations as the main reason they are open to trying other brands — giving brands the opportunity to always grab more market share.

Figure 9: Factors that drive Thai consumers to change personal care brands; ecommerceIQ Beauty Survey Thailand 2018

And with most Thais using online platforms such as social media and brands’ websites as the place to learn about new beauty trends and products, leveraging online channels have become more important than ever for brands to attract more consumers.

Figure 10: An example of a Thai beauty influencer on social media; Wonderpeach’s Instagram

Figure 11: Social media is the number one destination for Thai consumers to learn about the newest beauty trends; ecommerceIQ Beauty Survey Thailand 2018

However, having a presence online will do brands no good without knowing what consumers actually want. Our survey results indicated that the first thing Thai consumers consider when choosing beauty products is the function (25%), followed by price (22%) and product reviews (17%).

In this context, function means the type of product, for example anti-aging, whitening, or acne-treatment. In Thailand, for example, beauty products with whitening agent is the most popular because of the local beauty perception.

Figure 12: Snail White Body Wash in various ingredients and functions; Snail White Official Facebook

Figure 13: The key features Thais look for when buying beauty products; ecommerceIQ Beauty Survey Thailand 2018

At the end of the day, what matters the most for consumers are good products that bring good results, and product reviews have become an increasingly important part of their decision-making process as it comes from real consumers.

Brands can take advantage of platforms like ReviewIQ to help them connect with real reviewers to leave product reviews after purchase on their official store on e-marketplaces like Lazada.

Figure 14: Using ReviewIQ, Nivea has successfully increased the number of reviews from their consumers for their shop-in-shop on Lazada Thailand.

Over 30% of our Thai respondents are loyal to one brand when choosing products from the beauty category. This shows that as long your brand is offering the right products at the right price and quality, consumers will be less willing to use products from other brands.

The full report for Online Beauty Consumers in Thailand will be out in November 2018. Subscribe to our weekly newsletter and be the first to know.

Are you a beauty brand looking to expand online in Southeast Asia? Contact us at hello@ecommerceiq.asia for expert ecommerce advice on growing your brand.

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:





     

     

    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

    On June 28, 2018, Alibaba announced the launch of Taobao Xinxuan (淘宝心选), which translates to ‘Taobao Selected’. After a year in alpha testing, the company’s new concept is finally available to the wider public.

    Through the website or one of two physical stores in Hangzhou and Shanghai, users can shop for affordable quality lifestyle and functional daily necessity goods including home fragrance, smart power sockets, underwear, and sonic-control toothbrushes.

    ecommerceIQ

    Rimowa?

    According to TechNode, the recently opened store in Shanghai was raided and emptied by eager customers in a mere two hours.

    What is Taobao Xinxuan?

    Appearance wise, the Taobao Xinxuan concept will remind many of Japanese retailer Muji, whose clean and simplistic stores offer a wide range of quality and affordable clothing, stationery, bags, and even furniture.

    ecommerceIQ

    Taobao Xinxuan Store Concept Design

    From a business model perspective, Taobao Xinxuan is actually more like Xiaomi, the smartphone-manufacturer-turned-global-electronics brand. Its Manufacturer-to-Consumer (M2C) approach and short supply chain allows the company to quickly go from the latest consumer insights to manufacturers to create products and achieve go-to-market in a few months.

    ecommerceIQ

    Xiaomi Flagship Store in Shanghai

    ecommerceIQ

    Xiaomi Flagship Store in Shanghai

    Arguably, Taobao Xinxuan could be considered a clone of the M2C ecommerce platform launched by Chinese gaming company NetEase called Yanxuan. Since its release in 2016, Yanxuan has seen rapid growth in a unique vertical that avoids direct competition with Alibaba and JD.com.

    The Yanxuan model can be described as an ODM (Original Design Manufacturer) model as well. By going directly to Chinese manufacturers creating products for established global brands, NetEase is able to get the same quality while selling at a much lower price by skipping over distributors.

    ecommerceIQ

    NetEase’s Yanxuan website

    By targeting young, mainly urban consumers who value quality and design but are also price sensitive, Yanxuan has been able to achieve rapid growth in the Chinese ecommerce space. The company reached a monthly GMV (gross merchandise volume) of RMB 60 million (about US$9 million) by Q3 2016, only a few months after its initial launch. This allowed Yanxuan to break into the list of top 10 Chinese ecommerce platforms based on GMV.

    ecommerceIQ

    Yanxuan Home & Living Category

    Alibaba’s New Trojan Horse?

    For a business to execute the M2C model well, it needs to understand what consumers want and then act on it swiftly. Considered the pioneer in M2C in China, Xiaomi is well known for asking its users directly what they’d like to see in terms of new features and products.

    Another company that knows what its users want is – surprise, surprise – Alibaba. Being the largest ecommerce company in China, Alibaba has extensive data on what brands and products people are buying and when and where. This doesn’t even include the additional data it gathers through its other businesses Ant Financial, Ali Health, and its offline Hema supermarkets and ‘New Retail’ initiatives.

    Alibaba’s US counterpart Amazon hasn’t shied-away from using its data to introduce its own private label brands to compete directly with the other brands selling on its platform.

    “The company now has roughly 100 private label brands for sale on its huge online marketplace, of which more than five dozen have been introduced in the past year alone. But few of those are sold under the Amazon brand. Instead, they have been given a variety of anodyne, disposable names like Spotted Zebra (kids clothes), Good Brief (men’s underwear), Wag (dog food) and Rivet (home furnishings).”

    New York Times, ‘How Amazon Steers Shoppers to Its Own Products’

    And this move by Amazon isn’t a small pilot project. Amazon private labels have a large impact on revenue:

    “The results were stunning. In just a few years, AmazonBasics had grabbed nearly a third of the online market for batteries, outselling both Energizer and Duracell on its site.”

    Amazon’s home court advantage gives it a leg up versus other brands:

    “Take word searches. About 70 percent of the word searches done on Amazon’s search browser are for generic goods. That means consumers are typing in “men’s underwear” or “running shoes” rather than asking, specifically, for Hanes or Nike.

    For Amazon, those word searches by consumers allow it to put its private-label products in front of the consumer and make sure they appear quickly. In addition, Amazon has the emails of the consumers who performed searches on its site and can email them directly or use pop-up ads on other websites to direct those consumers back to Amazon’s marketplace.”

    Alibaba has been flying under the radar with regards to any private label initiatives, and for good reason. Unlike Amazon, which started out as a retailer buying and selling products, Alibaba’s Taobao and Tmall properties are pure marketplace plays from the beginning. Because Alibaba’s main goal is helping connect merchants and buyers via its platforms, a neutral stance is essential to the platform’s success.

    It’s not surprising then that Alibaba decided to launch Xinxuan as ‘Taobao Xinxuan’ rather than ‘Tmall Xinxuan’. Originally a part of Taobao, Tmall spun off to provide a more premium B2B2C marketplace for authentic brands to sell their products online. Mixing in Xinxuan’s private label products would only upset brands competing in similar product categories.

    Lazada’s LazMall a stepping stone towards introducing Lazada private label in Southeast Asia?

    Last week, Lazada officially launched LazMall, its Southeast Asian version of Tmall. It’s a move towards splitting Lazada (‘b-to-C’) and LazMall (‘B-to-c’) and aims to offer a premium place for big brands to sell online, away from the grey market sellers on the platform.

    ecommerceIQ

    From the outside, this looks like an obvious move against JD, known to offer a better customer experience according to our recent Indonesia online marketplace survey.

    However, seeing Alibaba’s new concept in China with Taobao Xinxuan, it’s not far-fetched the LazMall spin-off will lead to Lazada M2C private label brands in the near future.

    The Chinese ecommerce market, being about 10 years ahead of the Southeast Asian one, acts like a crystal ball for brands operating in our region. Battle-tested brands with operations in China know better to diversify their channels before putting all their eggs into a single basket.

    Southeast Asian-native brands are recommended to shake off their naivety and learn from China’s history.

    Monogamy in ecommerce does not lead to happiness.