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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.

The Background

Back in 1851, a small apothecary was established in the neighborhood of East Village, New York by John Kiehl. Breaking away from typical drug stores that offered common compounds and nostrums prepared onsite, John chose to open a store that focused on essentials oils, homeopathic and herbal remedies to achieve his objective — keeping the local community happy, healthy, and feeling their best.

The apothecary remained in the family for 70 years until it was purchased by Kiehl’s apprentice, Irving Morse, in 1921 before his son, Aaron Morse, took over in 1950 and added grooming products for men and women to the brand’s product line.

Aaron was also the one who introduced free samples to customers and is still practiced at today’s global cosmetics powerhouse Kiehl’s.

More than 12 million Kiehl’s sample packets and tubes are given away each year.

Fast-forward to 2000, Aaron’s daughter Jami Morse Heidegger decided to sell the business she inherited to L’Oreal for approximately $100 million. The brand had become immensely popular among fashion enthusiasts and skin-care connoisseurs worldwide and impossible for her to continue managing.

“It was like a snowball rolling downhill and just getting bigger and bigger. I created something I couldn’t control” – Jami Morse Heidegger

Jami Morse Heidegger, third-generation Kiehl’s heiress and her husband, Klaus Heidegger
Source: Retrouve

After being acquired by one of the largest cosmetics companies in the world, Kiehl’s expanded to 2,000 locations in 61 countries and was well on its way to the top of the beauty industry. What could go wrong?

The Challenge

Jami always feared her business would become a brand fighting for money, attention and space.

The thought of selling her business to L’Oreal didn’t appeal to her at first because L’Oreal had a reputation in building mass brands like Maybelline and had never managed a niche, boutique brand before.

But after it grew to a size she could no longer handle, she had no choice but to hand the brand over to a corporate looking to compete in the burgeoning specialty market.

Kiehl’s was afraid that under the management of L’Oreal, consumers would no longer view the store as independent and cutting-edge but rather as a revenue-generating corporate machine.

“[The challenge is] to grow and export the Kiehl’s way without changing it. We soon realized that we needed to stick as closely as possible to our business model on a global basis, to create a consistent Kiehl’s experience around the world,” said Kiehl’s General Manager Worldwide, Cheryl Vitali.

How were they going to keep a tight leash on L’Oreal?

Inside Kiehl’s apothecary during its early days. Source: Yahoo

The Strategy

The company didn’t want a flashy marketing budget or fancy model to be representing its brand.

“We want to keep the line [Kiehl’s] very exclusive,” said L’Oreal USA’s former chief executive, Guy Peyrelongue.

In order to appease the wishes of the Kiehl’s family, L’Oreal maintained the brand’s identity and its distribution model while ensuring its stores around the world matched the look and feel of the original apothecary in East Village.

Kiehl’s was on a mission to set strict brand boundaries for consistency and product control. And it worked.

Any one that has ever stepped into a Kiehl’s apothecary will recognize the iconic skeleton, Mr Bones, next to the famous Harley Davidson motorcycle.

“The motorcycles entertained the guys while the ladies shopped — and it was also a very clever way to introduce Kiehl’s men’s products to them,” – Chris Salgardo, president of Kiehl’s USA

Kiehl’s shops around the world look almost identical thanks to the brand’s strict guidelines. Source: Marie Claire

The brand also spends heavily on the development of products and ingredients, almost 3 to 5 times more than competitors. Its contribution to multiple charitable efforts also proved to be a successful way to hook customers to not only buy for themselves, but also feel proud to gift Kiehl’s products.

In Thailand, Kiehl’s introduced the country’s first ambassador and offered free samples together with a 5-minute consultation. Source: mThai

The company’s success in the US made global expansion a next natural step. In line with L’Oreal’s focus on digital marketing and ecommerce to capitalise growing consumption, Kiehl’s went online.

“It [online] enables us to get to know our customers better and interact more effectively with them, while remaining true to the brand’s rebellious and offbeat style” – Cheryl Vitali

By 2013, Asia had topped global sales of natural personal care products. The popularity of natural products was driven by major economic changes and rise in disposable incomes, especially among the Chinese, who had become more health-conscious.

The chart shows the sales of natural personal care products by region in 2013; Asia is the leader in sales. Source: Kiline Group

Southeast Asia also displayed the highest-growing demand for beauty and personal care causing Kiehl’s to invest heavily in performance marketing and its website with the help of ecommerce enabler and e-distributor aCommerce.

Beauty and personal care is expected to grow the most in Asia Pacific from 2016-2021. Source: Euromonitor

A fear many brand managers face is consistency across channels. How do I ensure the brand is rightfully represented at all customer touchpoints?

In the case of Kiehl’s, the company successfully projected its edgy and young vibes through bright colors and flashy images on its website in Thailand and Indonesia.

Kiehl’s website was localised for Indonesian customers.

The brand preserves its mission to make each and everyone of its customers feel good by utilizing technology. Kiehl’s recently implemented artificial intelligence and a text messaging model in its stores and online to keep customers engaged and taken care of.

“We’ve learned the first purchase happens in store, and online we’ve created tools to extend services to make a cycle,” Julia Mavrodin, Kiehl’s associate vice president of e-commerce and digital marketing said.

Through historical data collected from online orders, Kiehl’s can accurately estimate when a customer will run out of an eye cream or facial cleanser and send a text message to prompt the customer to order a new one.

A sample text message that Kiehl’s sets to keep their customers replenished with its goods. Source: Digiday

By introducing a direct channel to converse with customers, the brand is able to track where and when customers buy its products, even at partner retailers like Sephora or Nordstrom.

This allows the brand to stay top of mind and shield customers from buying unauthorized products off of e-marketplace like Amazon at the same time.

To this day, Kiehl’s has remained one of L’Oreal’s fastest growing brands and broke the symbolic $1 billion sales mark in 2016.

The Future

Kiehl’s is looking to capitalise on its brand power in new markets like the Middle East and Latin America to ultimately spread the brand’s legacy and become the number one skincare brand in the world.

“To get there we will need to pay even closer attention to our customers. After all, that has been the secret of our success for the last 160 years.”

ecommerceIQ, together with Sasin SEC, created LEAP (Leadership Ecommerce Accelerator Program) to provide the fundamental knowledge and skills needed to successfully run an ecommerce business in the world’s fastest growing market.

Southeast Asia’s first ecommerce program kicked off last Thursday with three lecturers from honestbee, L’Oreal and aCommerce teaching a full class of C-suites and Senior Managers from banking, travel, retail and FMCG industries, etc.

Every week after class has wrapped up, we will be sharing a few highlights from each session.

Welcome, Class of 2017.

1. Thailand’s Emerging Digital Consumer, the Super App, and Marketplace Verticals

PAUL SRIVORAKUL, ACOMMERCE GROUP CEO, CO-FOUNDER ARDENT CAPITAL   
LEAP Ecommerce Course Southeast Asia

Paul Srivorakul, aCommerce Group CEO, co-founder Ardent Capital

Messaging platforms are the emerging leaders in the ecommerce space to watch for because they’re no longer just social platforms but have the capacity to move up and down the value chain to become a ‘super app’.

An example is LINE: LINE@ (advertiser), LINE Shop (ecommerce) and LINE Man (on-demand).

LEAP Ecommerce Course Southeast Asia

Convergence of media, advertising, ecommerce and logistics. These brands move up and down the value chain

With millions of dollars behind titans such as Go-Jek, Lazada and Tokopedia all fighting for the region’s 200+ million internet users, what’s left for SMEs? According to Paul, the future is in vertical marketplaces.

“It’s more important to build a community around your company’s products and services than continual subsidizing because what matters is the consumer experience.”

2. What is a Product?

BOUNTHAY KHAMMANYVONG, HONESTBEE THAILAND COUNTRY MANAGER

product can be the feel of your packaging, it is the brand image, the UX on your website, it is essentially everything that reaches your end consumer.

LEAP Ecommerce Course Southeast Asia

Bounthay Khammanyvong, honestbee Thailand Country Manager

“It is imperative to define and understand your product to understand who is your real competition and whether you can avoid a war.”

And for ecommerce, make sure to offer consumers something they won’t be able to find offline. Otherwise, what’s the point?

3. The 10 Golden Rules to Succeed in Ecommerce as a Brand

PRAPONSAK (CAFAE) KUMPOLPUN, L’OREAL ECOMMERCE MANAGER

As a brand builds its digital strategy from the initial strategy, business plan to constructing the right internal ecommerce team to execute and measure the right KPIs, there are a few questions the Ecommerce Manager should always ask:

“What do you need to do to succeed?” and “why should you do this?” at each stage of this 10 step ecommerce strategy.

LEAP Ecommerce Course Southeast Asia

Praponsak (Cafae) Kumpolpun, L’Oreal Ecommerce Manager

What L’Oreal focuses on when establishing its ecommerce presence on multiple online channels is A+ Content – engaging content that inspires purchasing.

The next LEAP class is on Thursday September 14th, 2017. Stay tuned for this week’s learnings.

Sign up for the eIQ Brief to receive weekly ecommerce insights.

Instagram celebrated the first anniversary of IG Stories earlier this month. In one year, the platform has become one of the most important online channels for brands to reach customers as more than 70% of IG users follow a brand page and 22% of shoppers have regularly used Instagram to browse products.

With 250 million daily active users, Instagram Stories has become a new favourite tool for marketers as half of the businesses on the social channel have produced a story in the last month alone.

Its appeal comes from the contrast of Instagram’s two functions; the polished image shots and the “raw” side of the capture process.

“Within the same platform now we’ve got this lovely juxtaposition that allows you to tell a richer story, but maybe [providing] a more authentic, or more earthy experience alongside the more polished core visuals,” said Hugh Pile, CMO L’Oreal Western Europe.

Instagram Stories Brands

L’Oreal’s post on Instagram Stories

However, with so many advertising channels now available to brands, it is important to know what is the right content to produce on Instagram Stories for success.

The path to conversions

There are five main categories of activity that brands can encourage users to do with the feature in the ads for Instagram Stories, but shopping is the most popular objective for brands as 59% of the ads Stories produced since its launch in March linked to a page where the products featured in the ads were available online.
Instagram Stories Brands

 

“Instagram has integrated ecommerce handoff technology into Stories, namely swipe-up links leading to brand sites, linked influencer tags, and checkout buttons that support brand efforts to move beyond engagement metrics and render their live video content shoppable.” – L2

Brands also use Stories as a gateway or teaser to drive traffic to more elaborate content on platforms like Youtube or Facebook where shareability and engagement are more likely with the user.

Product promotion is still the most popular type of content in Stories, which accounted for 36% of content produced by brands, followed by ‘behind-the-scene’ pieces, and influencer endorsement.

Instagram Stories Brands

Video has also increasingly become a more effective media format that drives online shopping – 34% of Indonesian youth were influenced by video ads to shop online.

With more tools available for brands to engage consumers, especially in a market like Southeast Asia where online marketing channels are dominantly Google and Facebook, it’s time for brands to get more creative.

Beauty is undeniably a big industry but within the sector, the hundreds of well-loved brands are owned by only seven global conglomerates. These household names range from Unilever, L’Oréal to Estée Lauder.

The 182 beauty companies contribute heavily to a beauty market worth $63 billion in the US alone and responsible for shaping consumer ideas about modern day beauty. The US and China alone will account for 54% of the premium beauty segment by 2021.

The chart, illustrated by Business Insider, shows how interconnected beauty brands really are and which houses are most prominent. Below are a few that stand out:

L’Oréal’s footprint

L’Oréal had the most brands on this list – a total of 39 beauty brands ranging from Maybelline to Kiehl’s.

It was estimated that L’Oréal made $27.6 billion in annual beauty sales in 2016. What factors attribute to its success? The company’s ecommerce sales rose by 33% year on year in 2016 and 30% of its media spend was on digital.

For the company, ecommerce isn’t only a peripheral revenue stream, but the new growth engine.

La Roche Posay, a skincare brand under L’Oréal, also has a marketplace presence in Thailand through a flagship shop-in-shop on Lazada.

La Roche Posay flagship store, Thailand

Beyond Thailand, Johnson & Johnson in the Philippines recently launched an official flagship store for its brands, Aveeno and Neutrogena, on Lazada to take advantage of the marketplace’s high traffic.

“Ecommerce isn’t the cherry on the cake, it becomes the new cake,” says Jean-Paul Agon, CEO of L’Oreal Group.

Selling online also helps L’Oreal cut costs,

“With traditional channels, there’s counters, samples and purity materials, when we do ecommerce, the cost is lower,” says Agon.

Unilever’s footprint

Unilever has 38 sub-brands under its management, and many are drugstore staples such as Vaseline and Sunsilk. The company reportedly made $22.3 billion from beauty sales last year.

The FMCG giant announced a partnership with Lazada earlier this year to collaborate on supply chain, fulfillment, data, marketing and social commerce. As Lazada saw a 181% growth surge in one year in its FMCG category, Unilever is looking to grab a large piece of the pie.

Unilever’s digital strategy in Southeast Asia reflects the company’s global ambitions,

“It’s important to change business models, to be inspired by startups, because the model of the past is not the model of the future,” says Keith Weed, CMO of Unilever Global.

Unilever Thailand unveiled a flagship store on Lazada earlier this year, selling ten of its most popular brands on the marketplace.

Unilever, Lazada Thailand

Johnson & Johnson’s footprint

Johnson & Johnson is responsible for nine beauty brands on the list – relatively small compared to the others but what it lacks in quantity, it’s well-known brands make up in popularity among users. Aveeno and Neutrogena are household staples for body and hair care.

The J&J brands can easily be found on the shelf of US drugstore chains such as Rite Aid, and as equally easily across the globe in a department store in Singapore or Bangkok. Offline footprint aside, consumers can also find a lot of these brands online – especially in China.

“Ecommerce is becoming a strategic imperative to winning baby,” says Christina Lu, VP Marketing for consumer personal care, Johnson & Johnson. In China, 15% of baby skincare sales come from ecommerce.

The group is also doubling down on an online strategy in Southeast Asia.

Aveeno flagship store, Lazada Philippines

Estée Lauder’s footprint

The company has reached $1 billion mark in yearly ecommerce sales, with online being Estée Lauder’s fastest growth channel.

“New experiences and innovative high quality products and services, which will encompass digital marketing, disruptive in-store merchandising, compelling creativity and omni-channel offerings is a priority for enhancing the customer engagement experience,” says Fabrizio Freda, CEO of Estée Lauder.

Brands under Estée Lauder, such as Bobbi Brown and MAC leverage from being global powerhouses, and solidify their presence in countries such as Thailand by launching brand.com.

Bobbi Brown Thailand

Why are these beauty brands so successful?

In 2016, global brands such as Unilever, Procter & Gamble and L’Oréal maintained a strong foothold in Thailand even as the market saw a rise in local beauty brands. According to Euromonitor, beauty brands have experienced a faster growth rate in 2016 because of aggressive digital marketing strategies via: 

  • Online content
  • Different purchasing incentives such as click-and-collect
  • Free delivery with online purchases.

What this research shows is the importance of a digital strategy – not many brands have the capability of breaking into markets without a long term online play.

Interested in reading more on beauty? Check out eIQ’s BeautyIQ Series, where we cover different aspects of building a successful beauty brand in a digital age.

The original infographic was published on Business Insider, access the article here.