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Here’s what you should know.

1. Zalora Philippines gets funding from Ayala group

The Philippines’ Ayala Corporation has moved into ecommerce with the purchase of a large stake in Zalora Philippines. The group owns 49% of Zalora. The value of the investment was not disclosed.

 According to a 2014 study by Ken Research, the Philippines’ ecommerce market can expect a stupendous compound annual growth rate of 101.4%  from 2013 until 2018, thanks to rising internet and social media adoption.

 

Read the rest of the story here

2. Kejora targets growth-stage startups with $80m fund for Southeast Asia

Kejora, a VC firm and startup hub in Indonesia has announced a new venture fund for Southeast Asian startups. Its target size is $80 million and about a third of it has been secured at this point.

Among Kejora Star Capital II’s backers are Barito Pacific Group, an Indonesian conglomerate; the Charoen Pokphand family, who owns CP food True Corporation. Germany’s Hubert Burda Media is also listed as a backer.

Kejora has strengthened its regional reach with a new focus on Thailand. The team has also opened a new office in Bangkok.

Read the rest of the story here.

 

3. Wal-Mart’s online surge may help it challenge Amazon

Wal-Mart posted its third straight quarter of double-digit online growth, which helped its holiday results top estimates. Clearly, the retailer is benefiting from its Jet.com acquisition. Online sales gained 29% in the fourth quarter, which ended Jan. 31.

Wal-Mart is finally “playing offense,” said Peter Benedict, an analyst at Baird Equity Research.

Even with Wal-Mart’s recent resurgence, it won’t be an easy battle. Almost three out of four Wal-Mart shoppers bought something on Amazon during the holiday quarter, according to data tracker Prosper Insights & Analytics. This means that the retailer is on the right track, but they still have some work to do.

Read the rest of the story here.

 

4. Community Chatter from Quora: What’s it like to be a Chief Marketing Officer? 

Michael Lewis’ Moneyball chronicles how baseball teams evolved to embrace new and more sophisticated metrics to achieve success.

Today’s Moneyballer CMO plans her marketing initiatives the way Billy Beane built the Oakland A’s.  She leverages granular data on customer actions to expand beyond the traditional CMO role, influencing product strategy, customer service, and optimized sales pitches.

The Moneyballer CMO still uses smart agencies and consultants, but insources the core marketing strategy using the increased visibility her technology allows.

Read the rest of the story here.

1.8 billion out of 7 billion people worldwide are millennials, individuals aged 18-34 whose spending power is expected to reach 6 trillion USD by 2020. 72% of them shop and research for options online before making a purchase in store and 81% of them are mothers, typically in their early 20s and 30s, pursuing careers, building families and homes of their own.

Are brands or retailers really servicing this growing ‘mom’ demographic? For parents, there is a whole new arena of purchase considerations before the babies are even born. The infant formula market size in Asia alone is the largest globally and amounted to 30.35 billion USD in 2015.

This year, the global baby care market is presumed to hit 66.8 billion USD in sales. In Southeast Asian countries such as Indonesia and Thailand, sales for baby and child-specific products are expected to reach 280 million USD and 141 million USD by 2020, respectively.

Nowadays, with mothers juggling full time jobs and doing majority of the household chores, efficiency and convenience become top priorities. Where can Southeast Asian mothers look to ease their workload? Online would be a good place. 

ecommerceIQ ECOMScape shows that the current online selection contains only a few players focusing on typically called the ‘mom & baby’ vertical in Southeast Asia. Why is that? Is it because a demand doesn’t exist?

The Demand for Baby Products Online

The Baby & Kids fair is held twice a year in Thailand and attracts over 500 manufacturers offering discounts up to 80%. Similarly in Indonesia, the annual Maternity and Baby-expo welcomed over 400 brands and 36,000 attendees in 2016 looking for steep discounts.

But even on sale, baby care necessities such as a car seat and stroller can rack up a bill of 800 USD, not even including the cost needed to buy an accessory to connect the two items. A marketing manager in Singapore stated that she spends approximately 600 SGD every month on her almost two year old child.

New parents in the US spend around 12,000 USD in only the first year on diapers, formula milk, toys, clothing, strollers, toiletries among other baby care products. Price comparison is vital to save on large costs and today’s young parents have a resource their parents may not have, the internet.

Alessandro Piscini, CEO of Lazada Thailand, shared that during the online marketplace’s largest sale, Lazada 12.12 campaign, one of the top three selling items in Thailand was Enfagrow, a global baby milk brand that sold over 3,700 units in three days.

And out of the top three best performing brands, two belonged to the ‘baby diapers’ category being Mamypoko and Babylove.

A quick Google search will reveal that women are discussing on popular ‘mommy’ forums such as Mom Tricks, how purchasing in bulk online can cut the cost of diapers by 20% thanks to regular campaigns and discount codes.

In Southeast Asia, 19% of consumers have already purchased diapers online and 17% have purchased baby food online. And the demand for baby products will only increase. The largest buying group is in households with children aged 0-5 and Malaysia, Laos, Cambodia and the Philippines ranked in the top 100 for highest global birth rates in 2016.

 

Limited Selection for Mothers Online in Southeast Asia

With high birth rates, rapid urbanization, increase in purchasing power and greater access to high speed internet, shouldn’t brands be clambering to go online to serve the mothers of the region?

Although the traditional global baby care market is very competitive, Johnson & Johnson dominates the majority of market share in Southeast Asia. These are the other leaders in their respective markets:

  • Thailand: Johnson & Johnson leads with 45% market share followed by Colgate-Palmolive
  • Indonesia: Megasari Makmur followed by PZ Cussons
  • Singapore: Johnson & Johnson leads with 56% market share followed by Pigeon SG
  • Malaysia: Johnson & Johnson leads with 60% market share
  • Vietnam: Johnson & Johnson
  • Philippines: Johnson & Johnson 55% market share

 

One of the reasons Johnson & Johnson does well is because it engages in extensive marketing activities ranging from television, print ads to offline promotional events. It launched the campaign ‘So Much More’ aimed at educating mothers on the benefits of using its products.

 

The Rise of Local Baby Brands

Even though there is a large selection of international brands in the region, private label products with natural or organic ingredients are seeing greater growth as they are perceived to be safer for babies.

By highlighting the organic ingredients in their products, Care, Babi Mild, Cussons Baby and D-nee-Mild have become some of Thailand’s most popular household names.

As parents become knowledgeable, they will seek new products, follow trends and read more product reviews. Rather than aggressive marketing, domestics brands can use online channels to reach out to their demographic in a personable way.

 

The Wailing Opportunity No One is Talking About

Ecommerce is not only about offering competitive pricing. Today, it’s about providing an online environment that can capture the attention of a browser who has three mobile notifications, one browser pop-up and two advertisements long enough to make a conversion.

It is the brand’s job to appeal to the customer.

Parents are busy. Online shopping offers extendable shopping hours and a larger product assortment.

Create an Online Strategy for a Baby-oriented Brand:

Reach your demographic through the right partner

  • Choose a popular marketplace catering to your brand’s target market, an example would be female oriented Orami in Indonesia or Thailand.
  • A marketplace presence should be seen as an initial short-term strategy before adopting a direct-to-consumer strategy via a brand.com site.

Be active on online forums, mom groups/blogs and social media

  • Moms with young children are new to the experience of raising kids and keen to digest as much information they can before making a purchase.
  • 89% of millennials trust recommendations from family and friends before making a purchase.
  • Influencers or ‘mommy bloggers’ are an affordable method to gain new customers and increase brand awareness. Ex. Hi-Q milk brand in Thailand 

Offer subscription commerce and/or bundle deals

  • Diapers are a staple item in a young family household. This makes it attractive for subscription services like Nescafe has done for its coffee – a monthly supply gets  delivered straight to your door. Brands that have already have a website such as MamyPoko are recommended to test this approach.
  • As diapers are bulky and expensive to ship, brands can bundle its sale with other products with higher profit margins such as beauty products and bottles to increase online profit.  Ex. diapers.com 

 

How Are The Global Players Doing It? 

Honest Company increased its value proposition through an online blog that covers eco-parenting,  nutrition and wellness. 

Pampers, the world’s top selling brand for baby diapers under P&G, pulled on heart strings and strengthened its own brand awareness through “A Parent is Born” – a 12-episode series chronicling one couple’s emotional journey through pregnancy.

Amazon recently launched a subscription service for toys exclusive to them. This secures a recurring stream of revenue for the company. The monthly fee guarantees a new box of educational toys to the house every month. 

 

Whirlpool, one of the leading players of home appliances globally, released a series of programs and podcasts about parenting, women, and children health leading to over 30,000 downloads per show and mainstream media coverage. Fisher-Price toy-maker engages with parents via its ‘Share the Joy’ campaign, where consumers are offered a $5 coupon for visiting the website and given an additional $5 incentive to share a video with friends.

All of these global brands are taking big strides to capture a demographic that will always need the same products because there is never a shortage of new parents, new mothers and babies that grow too quickly. Local brands, it’s your move.

Since its launch in December last year, Facebook Live has presented everyone an opportunity to share a live moment in real time, and this feature has become an important addition to the world’s largest social network. As with other products, Facebook has been pushing people to use Facebook Live, either by inspiring to launch an out-of-home awareness campaign or more directly adding a live button on the app’s homepage. The social network also ranks live videos higher than other types of posts to encourage users to interact and ‘be in the moment’.

Facebook Live – Be in the moment

Despite all the effort, brands and publishers in Southeast Asia seem to take a wait-and-see approach as for now they don’t produce many live videos as can be seen on the Live video map. Lack of ideas and expertise in creating this new type of content which differs from traditional promotional videos are the main factors that have hampered adoption of Facebook Live in the region.

On the other hand, Southeast Asia’s Facebook merchants who use the social network to showcase and advertise their products are in the forefront. They’re taking advantage of live videos to engage with customers and sell products in new ways.

How to capture the shifting consumer attention?

As 50% of consumers feel increasingly overwhelmed by brand marketing messages on social media, consumer attention and engagement is scarce. According to Facebook, people spend three times more time watching a video when it is live compared to when it is not broadcasted in real time.

With this change in mind, brands should capitalize on campaigns in the format of a high quality live video. Here are three ways Facebook merchants in Thailand are capitalizing on Facebook Live:

1. Host an auction in real time

One prevalent example how the live video feature is being used is to host in real time an auction of new or second hand fashion products such as bags, dresses, or even items like electronics.

The way it works is similar to a typical auction, just when the auction is hosted on Facebook Live, the bids are submitted as comments. When the broadcast ends, the merchant and the winner arrange the details of the payment and delivery.

2.  Showcase products and answer questions in real time

A number of merchants also use Facebook Live to demonstrate their products. Customers in the comments section can ask questions about the price or details of the product for the seller to answer.

Similar to hosting a live auction, broadcast viewers who want to purchase products can send a Facebook message directly to the merchant to arrange payment and delivery.

3. Attract viewers with games, prizes, Q&A sessions

Hosting interactive games or quizzes and giving away prizes for sharing a Facebook Live video with friends is also a tactic used in Thailand to attract more viewers and followers.

The owner of cosmetics brand B’Secret Chonnipa Wisedsuranun is a live broadcaster who has successfully leveraged this strategy. One of her Facebook Live videos generated over a million views and almost as many comments.

She uses live video to engage with her customers and build a fanbase by asking viewers to share her live video during which her cosmetic brand is mentioned throughout. To incentivize customers to share the video she gives away prizes like iPhones, cash, gold, and more. This technique allows her to garner a huge amount of viewers and fans in a short period of time.

By doing so, she also creates awareness of her products without paying a dime to Facebook for advertising.

Chonnipa also often uses Q&A games where viewers who answer correctly in the comments section to a question she asks win a cash prize.

Facebook Live provides brands and retailers an alternative way to grow their followers, engage with a wider target audience, and drive sales without directly paying money to Facebook for ads. Businesses that still rely primarily on Facebook ads will eventually experience growing advertising costs due to the nature of auction-based advertising that makes bidding more expensive when there are more advertisers.

In contrary, businesses that can effectively leverage this interactive video format are likely to capture the  attention of consumers at a lower cost.

BY KORAVUT PAVITPOK, ACOMMERCE INTERNET MARKETING MANAGER

 

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Indonesia’s groceries market is plentiful but fragmented. While traditional supermarkets still reign, wet markets and independent grocery stores are gradually being replaced by modern retail chains and hypermarkets, a superstore that combines a supermarket with a department store or moving to ecommerce.

With a population of more than 258 million and an emerging middle class with surging purchasing power, hypermarkets, supermarkets and online players are working hard to capture the Indonesian potential.

How will they compete for the attention of shoppers? Data. Consumer insights are valuable to  retailers and marketers because it provides them a peek into the population’s purchase patterns and product preferences, which allows implementation of successful marketing strategies.

Startup from Indonesia Snapcart aims to do exactly this for their clients. The app offers shoppers cashback and rewards in return for photos of their offline shopping receipts. Data from the receipt is then collected by Snapcart, providing a window into the shopping behavior of Indonesians, Southeast Asia’s largest market.

Snapcart has shared exclusive data with ecommerceIQ to reveal what consumers are buying on a monthly basis at the country’s top five offline grocery stores: Alfamart, Carrefour, Hypermart, Indomaret and Super Indo.

By understanding offline retail trends, retailers can adjust sales campaigns or push out creative marketing strategies to make ecommerce more attractive to shoppers. What do we mean? Here’s how marketers can improve their online marketing tactics through Snapcart offline data:

Bundling

Bundling refers to the grouping of products to maximize sales and often an effective strategy used by marketers. By selling complementary products together, it incentivizes shoppers to make a larger purchase at one time to save money and time.

Fast food companies such as McDonald’s and Burger King have seen a significant rise in sales due to the introduction of combo deals. Approximately 35% of customer visits to these chains have been to purchase a ‘meal’. Starbucks also cashes in on the bundle deal, offering a customizable $8 ‘power lunch’ that combines a sandwich, popcorn, fruit bar and a bottle of water.

However, there’s a catch. If a retailer is looking to purely sell through bundling strategy, it may backfire. Researchers from Carnegie Mellon University found that:

Companies profited best when the bundle strategy was coupled with an option to buy each piece individually.

Looking at customer data from Alfamart, baby diapers, cookies, fresh milk and cooking oil rank in the top 10 categories consistently every month.  It would be simple for the retailer to bundle fresh milk and cookies together or formula milk and diapers together to boost the sale of both category items. (see fig.1)

(fig.1)

Bundling is also used to sell less popular products. For example, cooking oil was a best seller every month at Super Indo and could be paired with an underperforming frozen package food at a promotion, to nudge shoppers with their grocery choices.

Other data also shows that Indonesians love to snack. Online retailers could offer shoppers the option to customize a snack basket online and increase basket size.  

Subscription Model

At Carrefour, instant noodles outperform every other product category each month (see chart). If consumers are purchasing large amounts of instant noodles regularly, Carrefour could introduce a subscription model.

[show-rjqc id=”61″]

 

For example, online shoppers would be able to order a customized instant noodle box, with variations in both brands and flavors, to be delivered to their homes once a month. Global brands in Southeast Asia such as NESCAFE are already adopting a subscription model strategy for everyday necessities people buy regularly such as coffee. 

Another startup from the US called Love with Food is expanding globally with a subscription-based service that sends consumers a box of all-natural, organic, and gluten-free snacks. Everything in the box comes from smaller food brands that want to get their product in front of customers.

Supermarkets lacking an online presence can create a simple popshop that will allow shoppers to sign up to have instant noodles or diapers in bulk delivered monthly to their homes.

Special Sales

Both the supermarket and distributor have the ability to push out a sale. But a sales strategy isn’t only about lowering the price of a product, it should effectively increase sales.

Discounts

A discount strategy should be used sparingly, and is effective only when a retailer awards loyal customers or happens occasionally.

Adjust pricing to increase short term sales or to boost impending dead stock to increase inventory turnover. This also means that as a retailer, you have a chance at negotiating a good deal with your product supplier as you will have increase in stock order.

For some grocery stores, they tend to offer discounts just before closing time, so discounts usually begin around 7pm-8pm.

BOGOF

The ‘buy one get one free’ strategy is arguably one of the most effective psychological pricing strategies that is used with shoppers. Consumers are typically drawn to the word ‘free’, which makes them buy more than they initially wanted but a lot of doubt surrounds this model.

British supermarkets such as Sainsbury’s and Tesco have started to phase out BOGOF deals, following the release of a report highlighting how it misleads shoppers.

Retailers actually increase the price of the product customers think they’re getting a deal on. Instead of BOGOF, a ‘buy 5 get 2 free’ strategy seems to be more effective because the price isn’t deliberately pushed up as high for the sake of luring customers. For retailers that want to adopt this strategy, choose to promote everyday items such as shampoo or cleaning detergent.

The future of groceries

The data collected from Indonesian shoppers can enhance marketing campaigns both online and offline for retailers. As grocery retailing in Southeast Asia begins to move online, chains without a digital strategy such as Carrefour and Super Indo should consider transitioning to ecommerce.

There is still potential in the country for disruption as 69% of surveyed online shoppers are millennials, which means an upcoming generation of shoppers will be accustomed to using various online channels. Retailers should be ready to capture this audience by using offline customer behavior data they already possess to align their digital strategies and effectively enhance sales across channels.

BY anutra chatikavanij