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Workers aged 30-34 claim the highest average gross income levels in the Philippines. And as the relatively young population is set to see a surge of middle class households – especially the single person household – for the next 13 years, strong growth is predicted for the following industries: clothing, footwear, hotels and transport.

Despite an increase in the middle class, the social class E (lowest income class) still remains dominant and represents a bigger market for low cost food, housing and apparel.

The impact of the increasingly affluent Filipino shopper should not be overlooked by global brands as the current focus of many companies is trained on larger markets like Indonesia and Thailand. Traction in the market could easily be tested through a social media campaign as Zara did for Thailand as Filipinos are highly active on social channels. The best way to reach new consumers is through a channel they are already highly active on.

ecommerceIQ

Zara Thailand announcement of online shop on Facebook.

Japanese clothing brand Uniqlo and Nestlé are two global brands that stand out in the Philippines through social media campaigns to attract the country’s almost 40 million Facebook users, a number that is expected to jump to 47.5 million next year.

Nestlé’s Facebook rewards scheme that was launched in 2011 encouraged followers to invite friends to ‘like’ the page in order to win points and prizes. The coffee brand also sells on Lazada and incentives shoppers on Facebook with discounts and promotions.

Earlier this year, Nestlé was awarded by Youtube for releasing one of the most popular Youtube ads in the Philippines. Some other popular campaigns include: 

Youtube Ads Philippines

Uniqlo, on the other hand, has been speedily launching offline stores in popular shopping locations but does not currently offer ecommerce in the Philippines. The company’s recent and successful launch of its shoppable website in Thailand could persuade the brand to move forward with a similar strategy as the markets share similarities. 

In light of Mother’s Day on May 14th, marketing agency Mindshare (Thailand) released a study on mothers in Thailand and their everyday consumption habits, both offline and online. The survey focused solely on mothers who reside outside of Bangkok in second tier cities in hopes to help marketers better understand what mothers require for everyday products such as groceries and FMCG goods.

The women surveyed reside in Naan, Choomporn and Buriram provinces in Thailand and come from low income households, earning approximately $300 – $1,400 per month. 65% of Thailand’s population resides in second tier cities, making them a large potential target group for marketers and brands.

The qualitative research looked at three groups:

  1. Mothers with infants from 0-3 years old
  2. Mothers with children from 3-6 years old
  3. Mothers with children 6-12 years old

And these were the results:

A rise of internet savvy mothers

  • Modern mothers are receptive to the internet and are willing to browse different websites to get advice on child rearing
  • Modern mothers often browse on Facebook and engage in online discussions about child rearing
  • Modern mothers are turning to ecommerce in second tier cities
  • Money and finances are at the heart of their purchasing decisions. Mothers in second tier cities often sacrifice their own needs to spend more on their children and treasure moments such as celebratory dinners outside the home
  • To access the internet, most mothers activate Wifi hotspot from their mobile phones, as this makes it easier to monitor internet usage and budget finances

The role of technology in everyday life

  • The internet is a new mother’s best friend, especially during the adjustment period where her life and schedule are changing. Brands can target mothers through Facebook groups, especially as there is a vast network of Thai mothers that are often exchanging tips and looking for a support system online.

Although they are open to purchasing online, mothers still believe in the importance of touching products before buying. For young mothers, reading the product label, smelling and even tasting products is not uncommon.

Communities play a key role in decision making

  • Mothers in second tier cities often look to other mothers in their community, not celebrities, as they are more relatable. This is another interesting marketing tactic for brands because targeting community mothers requires a lighter marketing budget than celebrity endorsements.
  • Brand loyalty can be achieved through seeing other mothers in the community use a particular product. This is especially true for mothers with young infants.

Brands use a steady flow of insightful, interactive content to strengthen the mother’s connection with the brand and build brand loyalty and trust.

A good example is Nestlé, that often publish family centric content on its multiple Facebook pages to connect with its primary consumer – mothers.

Source: Nestlé Baby Thailand Facebook page

Source: Nestlé Baby Thailand Facebook page

Discounts and promotions incentivize spending

  • Most mothers would choose quality over price for their children
  • Flyers, discount advertising and promotions are important in the decision process.

Ecommerce in second tier cities is still in its infancy, but its adoption is showing promise. Mothers often go online to find products that aren’t available in their province, or for when they want to ‘show off’ by having their child use something that other community mothers do not have.

Although ecommerce is not yet widely popular among mothers in second tier cities across Thailand, it is slowly becoming a part of everyday life. Thai mothers are reliant on social media channels such as Facebook and LINE to find products unavailable in their towns, and online shopping seems to be the next natural step.

Find more insights published on MarketingOops. Read the original version in Thai here.

 

Here’s what you need to know today.

1. Alibaba’s Ant Financial raises offer for MoneyGram to outbid Euronet

Ant Financial, Alibaba’s affiliated company focused on financial services, raised its agreed offer for MoneyGram, a Texas-based money transfer company, by 36% to top competing offer from Euronet and overcome security concerns. 

The revised bid is worth $18 a share in cash, up from $13.25. The new deal will values all the common and preferred stock at $1.2 billion and has got the backing of MoneyGram’s board. Euronet previously offered $15.20 a share.

By raising its bid, Ant Financial is making clear its intention of completing the deal. But the Chinese company could still face potential political obstacles.

American lawmakers are urging the powerful Committee on Foreign Investment in the US to conduct a full and thorough review of the deal.

Chinese companies have struggled in the past to get deals done in the US due to political reasons. Kansas-based Euronet has a better shot at the regulatory approval.

Read the rest of the story here.

 

2. Nestlé eyes Malaysian mothers with ecommerce campaign

Nestlé Malaysia is partnering with marketplaces like Lazada, 11Street and Gemfive to launch its ‘Wellness Together-Gather’ ecommerce campaign.

The company’s campaign is themed around “cracking wellness code” and aims to help Malaysian mothers keeping their families happy and healthy at the same time.

The deal offers up to RM2 million worth of savings from online grocery shopping, with more 300 SKUs and discounts up to 40%.

The company has put their ecommerce business to be a key focus in 2017, as expressed by Alois Hofbauer, CEO of Nestlé Malaysia. They are investing more RM1 million in this campaign and looking to explore new consumer solutions to drive the company’s nutrition, health and wellness strategy.

Read the rest of the story here.

 

3. Recommended Reading: Is American Retail at a Historic Tipping Point?

Between 2010 and 2014, ecommerce in the US has grew by an average of $30 billion annually. Over the past three years, average annual growth has increased to $40 billion.

Ecommerce players, led by the industry giant Amazon, have made it so easy and fast for people to shop online and traditional retailers are struggling to compete.

Ecommerce merchants are vying to lease part of a huge warehouse space, spanning 11 acres, that would allow them to deliver goods the same day they’re ordered online. This transformation is hollowing out suburban shopping malls, bankrupting longtime brands and leading to staggering job losses.

“That is the tipping point, right there,” said Barbara Denham, a senior economist at Reis, a real estate data and analytics firm. “It’s like the Doppler effect. The change is coming at you so fast, it feels like it is accelerating.”

Read the rest of the story here.

1. Singapore’s Onelyst to launch ‘Rely’: Shop online pay later

Rely allows individuals who do not meet minimum income requirements for credit cards to buy items via installment plans. The eighteen-month-old startup has nabbed a major online retailer as one of its first partners for Rely. It also has plans to enter the Indonesian market next March.

Read the rest of the story here

 

2. Nestlé aims to boost ecommerce contribution to revenue

Nestlé (Malaysia) Bhd expects to increase its ecommerce contribution to its revenue from the existing one per cent to 10 per cent within the next three to four years. It was also stressed that this continuous increased demand would also mean a positive impact to all its stakeholders, from farmers who supply the raw products, to shareholders and to also the government as Nestlé is here for the long term.

Read the rest of the story here

 

3. Grocery Wars: Alibaba and JD.com Compete Against Supermarkets, Corner Stores

By 2020, online sales of fast-moving consumer goods will grow at a much faster pace than apparel and electronics to expand fivefold from today and reach 1.2 trillion yuan, according to Yihaodian, one of China’s earliest online grocery sites.

Read the rest of the story here

FMCG businesses are taking note of the correlation between mobile data consumption slipping sales growth as some of India’s largest consumer companies have slipped to a two-year low. Indians can buy mini-data plans at the same mom and pop stores where they buy their snacks and a new wave of affordable smartphones has brought hundreds of millions of Indians online for the first time, reports the Wall Street Journal.

We are competing for the consumer’s wallet not just with beverages and other impulse categories, but also with data services on phones. – Venkatesh Kini, President of Coca-Cola India.

With low disposable income, the majority of Indians face difficulties affording monthly data plans and only get online when they have spare change. For a quick glance  on Google, Vodafone Group PLC offers data plans for as little as  15 cents at a time, around the same price as a bag of crisps.

Anup Kapoor, who runs a mom and pop store says that data and voice plans make up for 70% of his daily sales.

The battle for limited space in India’s tiny storefronts is competitive. Cellular companies sponsor sings to make sure customers know that their local mom and pop shops offer more than candy. Kapoor’s shop has a big sign of Vodafone, while posters of Frito-Lay chips and Coca-Cola are smaller.

I can do without conditioner. But I can’t do anything without my phone, I can’t hear songs, surf the net or chat with friends,” says Lakshmi Kumari, domestic worker. 

A version of this appeared in Wall Street Journal on August 15. Read the full version here.

Nestle brand commerce strategy with Alibaba

The Swiss company yesterday kicked off the six-month campaign by launching 67 products on Tmall.com, Alibaba’s leading B2C online-shopping site, that have never been available in China before, including Nido milk powder from the Netherlands, Nestlé Damak chocolate from Turkey, Nescafé Gold from France, and Nestlé and Wyeth infant nutrition products from Switzerland, the U.K. and Germany. The three-day Super Brand Day promotion features discounts on a total of 154 products from 30 Nestlé brands.

Other marketing activities Nestlé has planned in the months ahead will showcase its brands to Chinese customers countrywide via what Alibaba calls its “ecommerce media ecosystem,” a growing digital marketing network encompassing social, mobile and web-based media outlets.

Nestle Brand Commerce Strategy With Alibaba is Aggressive

For example, Nestlé marketing will be featured prominently on popular video programs on Alibaba Group’s Youku Tudou video streaming site, one of China’s top online video platforms. The campaign includes a Nestlé video that can be viewed on virtual reality headsets, marking the first time Youku Tudou has worked with a brand partner on a virtual reality campaign in China. Starting in August, Nestlé also plans to feature its products on Alibaba’s Tmall Country Pavilions.

Alibaba Group CEO Daniel Zhang said his company is combining digital media with data on consumer behavior to enable multinationals like Nestlé to undergo a “digital transformation,” building their brands and managing customer relationships in innovative new ways. “We will continue to expand on our partnerships and infrastructure to deliver access to the widest selection of the best products from around the world to consumers,” Zhang said in a statement, “whether they live in Beijing or a rural village in the farthest edges of the country.”

Nestlé is basing its upcoming China campaign on its 150thanniversary. The company launched its first Tmall virtual store in 2008 and has 14 flagship outlets on the platform.

Faced with disappointing growth in China recently, Nestlé is focusing on ecommerce to help jumpstart sales, according to aBloomberg story. Nestlé’s ecommerce business is growing at triple-digit rates in China and is more profitable than sales in physical stores, according to Bloomberg.

Read the full story on the Alizila blog, written by Jim Erickson.