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All aspects of ecommerce can be controlled by a brand, except for one area that is completely in the hands of the user – product reviews and ratings.

As competition grows on marketplace, where most online customers start their purchasing journey, this aspect has become a reliable filter to help other users decide, “to buy or not to buy.”

On most ecommerce sites, customers can sort products from highest to lowest average ratings, which means a high score gives brands more visibility and a competitive advantage over competitors. Better product rating, better purchase rate, makes sense right?

But five stars alone isn’t enough to convince customers to add to cart, it’s what the reviews are saying that drive checkouts, especially in Asia where an average of 22% customers — the highest globally — count online reviews as a decision making factor due to the strong effect of community.

By aggregating the major consensus of what customers are saying in their reviews, brands can leverage reviews to improve their performance online. How can this be done?

customers review Unilever

Data-analytics platform BrandIQ has collected reviews for four of Unilever’s brands – Dove, Rexona, Simple, Toni and Guy – on Lazada Philippines to showcase what companies can learn from this set of data and separating out the generic complaints (i.e. slow delivery, average product).

The average rating of each brand online gives a high level glance at which brand needs more monitoring and brand building. For example, Toni and Guy scores an average 3.81/5, which isn’t necessarily bad, but can be improved to rank higher in search.

42% of total reviews scrubbed were about the touch and feel of the products, but approximately 58% actually shed light on aspects other than product quality.

What were they saying?

To sort the data, reviews are split into five main categories: Product, General, Delivery, Packaging, and Customer Service.

customers review Unilever

From the data above, the keyword “delivery” is the second most quoted in reviews, but it doesn’t reveal whether sentiment is good or bad.

By splitting customer reviews into two sentiments: positive and negative, we identify the strengths and weaknesses of these categories. This allows companies to understand which area should be prioritised for improvement.

For Unilever brands on Lazada Philippines, despite the small numbers of reviews that talk about Package, the category racked up a strong positive sentiment compared to the other four categories (Service contributes only a small percentage of the total reviews). Extrapolation of this data can signal that the products ordered by customers is well taken care of during the last mile with the packaging the company used.

customers review Unilever

customers review Unilever

Review left by a Dove customer on Lazada PH that was found helpful by at least six other customers.

Customer reviews are a unique and vital aspect to ecommerce that offline retail rarely had to face before. Brands looking to crack the code on e-marketplaces will need to build an understanding for this new metric, and use it as a tool to their advantage.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’S TOP MARKETPLACES?

Online marketplaces offer brands high incentives as it gives them access to millions of customers. However, high volumes of traffic come with a price as they are often attracted to items sold by unauthorized sellers, often referred as grey sellers.

And without official authenticity checks being implemented, grey sellers are at liberty to put whatever the price they want to appeal to Southeast Asians high aptitude to look online for low prices.

To understand how grey sellers impact authorized sellers and the brand’s official stores on marketplaces, data analytics platform BrandIQ draws comparisons between the top three sellers for Samsung on Lazada Thailand.

This data shows that Samsung only controls less than 2% of total SKUs direct or through authorized third party sellers.From a numbers game of SKUs, grey sellers dominate the distribution of Samsung products on marketplace with a total of 51,925 SKUs or 98.1% of all Samsung products available on Lazada Thailand.

On Lazada Thailand, Samsung has several official stores; Samsung Official Store (managed by Lazada), Samsung Official Shop (managed by Samsung), Samsung Official eStore – Consumer Electronics, Samsung Official eStore – Mobile; as well as authorized sellers.

Multiple stores leave Samsung unable to create a unified brand experience confusing consumers as to which channel is more reliable given there is overlap on the product offering. Each channel also offers a different policy on payment and delivery.

How about price differences?

Taking a look at the price points for several products, BrandIQ data shows that grey sellers actually offer lower prices on average compared to the official Samsung channels. They can vary between 4% to as high as 63%.

Price comparison between Samsung official stores versus grey sellers on Lazada TH

From the consumer point of view, experiences from grey sellers offer a varying standard of service unsurprisingly but looking at ratings from three Samsung smartphone products show the official store still has the more favorable opinion from consumers compared to unofficial sellers.

Review comparison between official store vs. grey seller

However, it still remains a lose-lose situation for Samsung because consumers with a negative experience from grey sellers impact the Samsung brand and if they have a better experience with grey sellers, they will continue purchasing from them, causing Samsung to lose market share.

What does this mean for brands?

It becomes important for Samsung to create a unified brand experience in order to gain more market share on marketplaces like Lazada, especially with the numerous grey sellers flooding the site with their products.

Provided that marketplaces also suffer from counterfeit issues and grey market sellers, popular brands can work with Lazada and Shopee to boost its presence on the website through front page banners and onsite ad placements offered through Shopee’s new feature Shopee My Ads.

Consumers don’t want to think twice, and usually don’t even care, about differentiating between channels as long as they get the right product at the right price.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’S TOP MARKETPLACES?

As the year’s largest online sales campaigns wrap up, research from Google and Temasek predict Southeast Asia is well on its way towards becoming a digital powerhouse worth much more than $200 billion USD in eight short years. How did shoppers behave during Single’s Day in light of all the work poured into gaining their trust and promoting online shopping?

From exclusive updates provided by the companies to ecommerceIQ, here is how Google’s recent report correlates with real time results.

Lazada Group Single’s Day and Online Revolution:

  • Single’s Day (11.11) generated USD$123 million gross merchandise value (GMV), 171% year-on-year growth
  • Shoppers ordered 6.5 million items, 191% year-on-year growth
  • 70% of orders were placed from mobile devices
  • Sells 12 limited edition Volkswagen Beetles within 20 minutes, each costing RM112,112 (USD$27,441) during Lazada Malaysia Online Revolution (12.12)
  • Apple products offered officially on Lazada as the brand’s authorised online reseller, opens shop-in-shop (SiS)

11street Malaysia 

  • 600% increase in cross-border product orders, 400% increase in total orders (compared to a regular day)
  • Most popular products: GPS, mobile accessories, smartphones, TV sets, theme park tickets
  • Traffic to the website doubled, 85% contributed by mobile

Shopee 9.9 Mobile Shopping Day 

  • 350% increase in orders, 500% increase in traffic
  • Most popular products: make up brushes, smart watches, canvas backpacks
  • 7 million chats, 30,000 participating sellers
  • Highest number of items ordered by one buyer was 218
  • Find more here

The results from this year’s mega sales campaigns work well with new predictions by Google & Temasek in their latest e-Conomy SEA Spotlight report:

  • Ecommerce sales of first-hand goods will reach $10.9 billion in GMV in 2017, up from $5.5 billion in 2015 (driven by top players like Lazada, Shopee, and Tokopedia)
  • Southeast Asia’s internet economy will reach $50 billion in 2017, growing at 27% CAGR
  • The region’s internet economy accounts for 2% of Southeast Asia’s GDP, will increase to 6% by 2025
  • There will be 330 million monthly active internet users by year end, 90% of which are smartphone users
  • Search interest for ecommerce brands growing more than two-fold in two years thanks to promotional activities and marketing investments by leading regional/global ecommerce players and co-marketing initiatives with top brands in electronics, fashion and consumer goods industries.

ecommerceIQ

It’s shaping up to be a good end to 2017 for ecommerce players, investors and shoppers in Southeast Asia. Stay tuned for 2018 ecommerce predictions.

For more charts & graphs related to ecommerce in Southeast Asia, check out our database.

Seeing as the sun is always shining in Southeast Asia, sunglasses are a popular item that never go out of style, especially in the Philippines. The market is lauded as the fastest growing market in the region for luxury sunglasses brand Oakley as said by Andrew McMahon, former retail manager for Oakley Southeast Asia.

To feed consumer demand, the brand utilizes online channels, in particular, an official store on Lazada to sell to the growing middle class, who is also increasingly tech-savvy. Analytics platform BrandIQ takes a look at the sentiments surrounding Oakley’s products.

Oakley Lazada Philippines

Oakley official store on Lazada Philippines.

Launched almost a year ago, Oakley shop-in-shop (SiS) on Lazada Philippines leaves a good impression for the Filipino customers as witnessed by a 83% positive seller rating provided by customers.

Oakley got a good review rated by the customers on Lazada Philippines

Taking a look at all Oakley sunglasses/products across Lazada Philippines, BrandIQ found that they generate 70% of positive sentiments from the Filipino customers on Lazada Philippines, with ‘authentic’ and ‘fast delivery’ being the keywords that most often appeared in product reviews.

Simultaneously, ‘fake’ is the most common keyword that appeared most often in reviews with negative sentiments as grey sellers are abundant on the marketplace.

Oakley Lazada Philippines

The sentiments show that for customers shopping for higher-end brands, authenticity is more important than a low price — giving brands an advantage competing with grey sellers when they open online.

Discount season generated more reviews

During the build-up to the 11.11 last month, the average discount for Oakley sunglasses on Lazada Philippines increased by 35% on November 9, compared to the week before, and stayed the same until the end of the campaign.

Oakley Lazada Philippines

Sellers for Oakley (Philippines) starts the Online Revolution discounts on November 9. Source: BrandIQ

Although the discounts during this period only increased slightly by approximately 7%, the hype and ergo, traffic, to the website resulted in double the product reviews for Oakley sunglasses post campaign.

For brands attempting to boost ranks in search results on a marketplace, offering special incentives such as high discounts will encourage customers to leave product reviews and increase relevancy of the product.

Oakley Lazada Philippines

HOW IS YOUR BRAND PERFORMING IN SOUTHEAST ASIA’S TOP MARKETPLACES?

As the fastest growing industry in one of the world’s fastest growing markets, the evolution of Southeast Asia’s ecommerce landscape means new players and a lot of consolidation since last year’s first ECOMScape series by ecommerceIQ.

This year’s new edition of the ECOMScapes kicks off with Indonesia.

Expected to capture the biggest chunk of the $200 billion ecommerce opportunity in Southeast Asia, it’s easy to see why Chinese giants like Alibaba, JD, and Tencent have rigorously left their home-market to tackle Indonesia. What has happened over a span of only one year?

1. Chinese Companies are Hungry

Out of the total $3 billion investment put into Indonesia startups in the first eight months of 2017, 94% of the funding came from Chinese investors.

News regarding Alibaba leading a $1.1 billion investment in Tokopedia created excitement in the industry, especially because JD was rumored to also make a bid for the popular local marketplace.

Indonesia startups investment

Although that opportunity passed, it hasn’t stopped JD from participating in the funding round of Indonesia’s two other unicorns, ride-hailing app Go-Jek and online travel booking platform Traveloka. Chinese giant Tencent also joined the round for Go-Jek.

2. Natural Selection: A Race to the Bottom

As the market in Indonesia saturates, in both players and investment, it’s only a matter of time before natural selection weeds out the weaker companies (especially those with shallow pockets).

The past year has seen several ecommerce companies in Indonesia either shutting down or pivoting business models, and investors pulling out before stakes become worthless. And don’t think it’s only happening to the small fish.

Some cases? Alfacart and Elevenia.

Earlier this year, Indonesian convenience store chain Alfacart announced its decision to ditch the marketplace model after a continual lag behind e-marketplaces like Lazada and MatahariMall.

Launched in 2013, Elevenia is the joint venture of telco companies XL Axiata and Korea’s SK Planet. Despite claims that Elevenia has seen positive growth over the years, it’s a telling sign when both companies pull out and sell their stake to Indonesia’s conglomerate group Salim.

Even the ecommerce arm of large telco company Indosat, Cipika, shut down in June citing unprofitable business model and high cash burn rate as reasons.

Indonesia ecommerce landscape

With JD and Alibaba investing directly in local companies, it’s not a stretch to expect fewer names on the ECOMScape next year.

3. Marketplace Competition Heats Up

If this time last year Tokopedia was focused on growing its core C2C business, the Indonesian marketplace has long since been strong arming its shift to B2C as signaled by Unilever’s official store opening on the platform.

The move is already serious competition to Lazada, especially as the two ecommerce companies interchangeably grab the top spot in web traffic in Indonesia (which is probably why Alibaba invested in both companies).

Indonesia’s top C2C players have been moving into the B2C space i.e. Tokopedia. Traffic of ecommerce websites compiled by ecommerceIQ. Find more here.

Sea’s backed Shopee has also opened its platform for brands as it launched Shopee Mall that claimed to offer over 500 brands.

The shift from C2C to B2C is a natural progression as companies attempt to increase revenue and leverage their already large customer bases.

4. Having Fintech is for “Cool Kids” But the Nerds Will Win

While payments still remain a pain point in Indonesia ecommerce even though multiple companies released their own e-wallets last year, the country and the region potentially, might finally have a real solution.

Both Kudo and Kioson are arming micro-entrepreneurs and business owners such as mom-and-pop shops in rural areas with their digital platform to empower them to act as the bridge between ecommerce companies and rural citizens.

The O2O (online-to-offline) concept clearly has some merit, as both companies attracted investor attention and made headlines in 2017. Kudo was acquired by Grab and Kioson raised $3.3 million as the first tech company to IPO on the Indonesia Stock Exchange (IDX).

Kioson during its IPO in October 5, raising $3.3 million. Source: Kioson.

Indonesian startup darling Go-Jek is also leveraging its millions of users by launching its own mobile wallet, GoPay, which has real potential to become the WeChat of Indonesia.

GoPay’s usability has improved from payment for rides to also allowing peer-to-peer (P2P) transfers and making the order of food, groceries, tickets, and beauty treatments extremely easy in one app.


Are we missing any key players? Let us know via Linkedin | Facebook | Twitter

Download ECOMScape Indonesia 2017 here.

Featured image credit: Martha Suherman
As internet adoption grows at a double digit pace year on year in Southeast Asia – a 31 percent increase last year – retailers and brands must find ways to capture the wave of the some 80 million new consumers coming online.

Internet shopping has become one of the most robust areas of growth in the last few years, especially in markets like Indonesia and Thailand as both international and local ecommerce players pour money into winning the emerging digital customer in the region.

In such a fragmented market segmented varying in cultures and languages, there are a few common key threads to be noted about the region’s increasingly affluent shoppers:

  • Southeast Asia is mobile first. Mobile subscriptions have increased by 8% since last year, adding an additional 60 million users.
  • Southeast Asian’s are the most actively engaged with social media. Indonesia is sometimes referred to as “Twitter city” whereas Total Access Communication Pcl, estimates that Thais spend up to six hours a day on Facebook and Youtube – the 8th highest in the world.
  • Southeast Asia has low credit card penetration and a large unbanked population – 73 percent – due to a lack of financial maturity.
  • There is an overall low trust in anything ‘digital’ due to its novelty and user unfamiliarity.

So how do retailers, brand stores and marketplaces attract more consumers to shop on their websites?

One highly successful and proven method is to incentivize with large discounts, leading to the emergence of some of the region’s most infamous flash sales.

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