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Over the last few days, major moves have been made by a handful of top ecommerce players in Southeast Asia in efforts to cement a position in payments. Each company is already well aware: if you want people to buy or use your services, it makes sense to have direct influence over their spending.

Owning the payments chain has become so important (thanks to what was witnessed in China), that Amazon announced it would pass discounts to retailers if they used its online payment service.

Earlier this week, ShopBack, a cash back ecommerce aggregator, acquired Singaporean personal finance startup for an undisclosed amount. The stated reason being it wanted to help millennials ‘better handle their money‘, but with a new team of developers, no doubt the company is looking to optimise its existing system.

What was more interesting this past week were the new discoveries made by Go-Jek and Grab users in Southeast Asian markets.

Go-Pay

The on-demand market leader in Indonesia has expanded its reach to the most unexpected locations – street food vendors.

Tweet translation: “Interesting find this afternoon: Some street vendors on the alley beside Bank BNI Kebon Sirih have accepted payment with Go-Pay. When I bought ayam penyet [fried chicken] at my regular place, I just have to scan a QR code, show the payment slip, and that’s it. So cool!”

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The popularity of Go-Jek in Indonesia is almost legendary and this example shows how far its reach goes. The difficulty for Go-Jek will be expansion outside of Indonesia to other markets in the region, where similar on-demand companies exist.

GrabPay

With Uber officially out of the picture, Grab is doubling efforts to increase the adoption of its e-wallet, GrabPay. On a trip to Manila May 7th, an ecommerceIQ Community member shared with us app screenshots of Grab promoting a new cash ‘top up’ feature. Riders can add money to their Grab accounts by simply handing their drivers cash.

This is hardly innovative as Go-Jek has offered cash top ups since 2016, a large contributing factor to its success in Indonesia, but it shows Grab’s seriousness in evolving its payments product to the local market.

 

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This new feature follows Grab’s launch of three other services the company introduced to the Singapore market: GrabAssist, GrabCar Plus, and GrabFamily.

“Grab’s vision is to be an everyday app for consumers,” said Tarin Thaniyavarn, country head of Grab Thailand.

Regulations stand in the way of Grab’s vision in Southeast Asia as most countries lack any solid regulations to ride-hailing companies. Currently, the company is unsuccessfully trying to acquire a microfinance licence from the Bank of Thailand.

What drives the adoption of new technology?

Grab is targeting hawker stalls in Singapore, Go-Jek has already successfully penetrated local vendors in Jakarta. Grab is offering cash top ups, Go-Jek has been doing so for the past two years. They both offer on-demand services, taxis, cars, bikes and the technology and mechanics of an e-wallet are not all that different player to player. They are essentially going toe to toe, what is going to push further adoption?

The real winner will be the company’s capability in effectively communicating the benefits of its payments service to users. How aware are users of its existence and its importance? How can it make their lives easier versus using good old fashioned cash or swiping a credit card?

In developed markets like the US, Apple Pay, Samsung Pay, Google Wallet have single digit adoption rates compared to credit card usage. Why? Because the country already fares well with credit cards, there is no reason to change habits.

The same case can be made for relatively cash-less markets like Singapore. The real opportunity to dominate payments is in developing markets like Indonesia and Thailand, where credit card ownership floats around only 4 percent and majority of the population owns a smartphone.

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“To enhance awareness, you really need advertising — one thing that’s not well understood [by consumers] about Samsung Pay is that it has more utility the Apple Pay; you can use it at a non-NFC terminal and that’s a huge advantage I don’t think Samsung is doing a good job of promoting.”

It’s hard to escape news of changing consumer behavior and ongoing retail ‘disruption’, especially amid the year’s largest sales. An evident signal of this shift has been the steady decline in foot traffic to once widely /lopular Black Friday sales in shopping malls.

Net sales on Black Friday slid 10.4 percent for brick-and-mortar chains, according to RetailNext.

For digital-first businesses, launching online is a no-brainer. But what happens when you are an existing brand that is over 80 years old working with hundreds of distributors around the world? Speed and simple decision making are out of reach.

At the Shangri-La at the Fort Manila, four brands – Abbott, Unilever, Payless, and Titan22 – each leaders in their own categories, were brought together by ecommerce enabler and e-distributor aCommerce to candidly share customer preferences, impact of traffic congestion and what must change internally in order to stay relevant in the future.

This is what was discussed:

1. More Filipino men pushing the carts

“There’s a lot more male shoppers going for groceries, it used to be the woman that was in charge of nutrition labels, but now they tell men to do it,” says Christian Domingo with a laugh. He is the Head of Ecommerce for Abbott Philippines.

Findings from a recent Nielsen study show that 40% of today’s grocery shoppers in the Philippines are men, an increase of six percentage points from last year. The driving factor? Affluent Metro Manila residents, especially in dual-income households.

Nielsen

Grocery shopping behavior for men and women in the Philippines. For more charts & graphs, visit here.

What this means for brands is to rethink marketing strategies traditionally targeted towards women.

Referencing another study, Christian attributed the popularity of ecommerce to worsening traffic conditions in the Philippines. CEO and owner of Titan22, the top sneaker retailer in the country, Dennis Tan, also shared his experience.

“The customer decision window is getting shorter and shorter. It used to take days where people thought about purchases and then come back to it but now the entire process seems to happen with minutes.”

He should know as Titan sold 400 pairs of Jordan Elevens during Single’s Day (11.11) in the first hour online.

“I won’t drive for hours for a chance to get the right shoe size. Consumers have a lot of options where to buy products, so we need to offer a competitive advantage.”

2. After-sales is as important as the purchase journey

Ecommerce is commonly misinterpreted as the shopping experience on a website but what gets forgotten is the attention given to the steps that come after checkout.

“How a customer feels after the purchasing experience is a big factor to the entire happiness experience to retail. This is one of the big pieces,” comments Dennis.

“We need to give them inspiration, not only about the shoe, it’s about happiness guaranteed,” agrees Thea Lizardo, Head of Ecommerce for Payless Philippines (Footwear Specialty Retailers Inc.).

3. Internal processes causing friction, there needs to be unified commerce

aCommerce, ecommerceIQ

Christian Domingo and Thea Lizardo from Abbott and Payless, respectively.

“It’s not typically mentioned but an important factor to talk about is the hurdle of internal friction in terms of technology. There’s a lot of confusion around how we attribute sales,” mentions Thea. “ These discussions are vital to transforming the entire business.”

“How do we remain competitive? How do we keep customers? It’s overwhelming for brands and business owners to adapt to all the changes because it’s so quick but at the end of the day, it’s understanding your numbers, your customers, your behavior and leveraging it.”

“Internally, there is no P&L, who is going to own the digital marketing unit? The marketplace?” comments Christian.

“It’s recommended [at Payless] to have a separate P&L, separate ERP for our ecommerce business as we didn’t want to disrupt the other 76 stores,” replies Thea.

Another internal roadblock Christian hopes to push through is the company’s (lack of) unified shift to ecommerce.

“We are selling milk online but other product divisions such as diabetic drugs need the push. They have hurdles like FDA approval, internal conflict, etc. but what we envision for 2018 is to go beyond the brand because it’s the user looking for a solution to a problem.”

“We [Unilever] have a long heritage selling fast moving consumer goods but we need to move things faster,” closes Kay Veloso, Head of Ecommerce for Unilever Philippines.

“It’s [unified commerce] not an unachievable dream, it’s a basic expectation. B2C, B2B – we serve the entire ecosystem to get the pulse of people we serve, and continue to adapt our brands to ensure their day to day needs are met through ecommerce.”

aCommerce, ecommerceIQ

Kay Veloso at the aCommerce Philippines Partner Media Workshop

4. Data and mobile will pave the retail future

Each brand has their own ideas about the main focuses for 2018. Unilever Philippines hopes to e evaluate its mobile experience to understand if it’s delivering the brand message across the board.

“Omnichannel is the big trend that is here to stay in the Philippines. We need to provide consistent online and offline experiences and preserve the quality of our products both instore and online,” comments Kay. “80% is coming from mobile websites and the Philippines is actually the fastest growing mobile market in Southeast Asia.”

Payless Philippines wants to leverage its data to better utilize its offline stores to become more customer oriented and explore new channels.

“How can we leverage the 76 Payless stores and unify them to serve our customers better? We have online data, consumer data so we can map out our merchandising plan for various locations.”

“Social commerce, exploring the space that we’re not in [social media] but also stores (they can be turned into fulfillment centers). Customers are becoming brand agnostic. We need to capture them when they are on their devices, not only at the mall, people no longer go online, they live online.”

Titan, on the other hand, will focus on expansion through ecommerce to meet the demand growing outside of Metro Manila.

“The challenge for Titan is all our physical stores are in Metro Manila while 50% of consumer base is outside Metro – we will continue to build on it and see what role innovation really plays for us.

“At the moment, ecommerce is more defense than offense, but when you start playing offense is when you start to win.” — Dennis Tan, CEO and owner of Titan22

“It used to be that companies had to set up a website because everyone was doing it but the companies that have their own internal ecommerce teams are the ones that are most successful, you need to be ones to drive and grow it in the organisation.”

Dennis Tan from Titan22


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