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The big deal about Ramadan in Retail

Once a year, approximately 2 billion Muslims worldwide observe a month of fasting to commemorate their Islamic beliefs. This year, Ramadan will start on May 16 and end June 14, 2018.

In Southeast Asia, more specifically the pre-dominantly Muslim countries Malaysia and Indonesia, family members scattered across the region travel home to celebrate the holy month together. In addition to fasting every day from dawn to sunset, there are other consumer behaviors that have awoken retailers and ecommerce players alike.

Eid al-Fitr, the three-day celebration of breaking fast at the end of Ramadan is similar to Christmas in the West. And what is commonly associated with these holidays? Gift giving, new clothes, and feasts.

While the month is a joyous celebration among loved ones, it’s also one of the largest shopping events in the retail calendar – think of Black Friday and Cyber Monday in North America. It pays to pay attention to the Muslim buying power.

ecommerceIQ was invited to speak at Facebook Indonesia’s event a few weeks ago to share its findings about Indonesian shopping behavior during Ramadan based on its new segment Consumer Pulse. This is what we learned.

The average Ramadan shopper profile

Regardless of online or offline shopping preference, majority of Indonesians will buy more during Ramadan.

Based on our survey results, the average Ramadan shopper in Indonesia is a female, between 31 – 40 years of age and spends the most on items in the fashion and groceries categories.

Ramadan 2018

The more indulgent spending may be explained by the fact that prior to the start of Ramadan, working Indonesians have a major influx of disposable income as they receive their bonus for the year.

Unsurprisingly, the more income made, the more they will spend during Ramadan as shown by our survey.

Ramadan 2018

What is important to note is the middle-class household count in Indonesia is expected to rise to 23.9 million in the next 12 years from 19.6 million in 2016.

The country already holds the fourth largest middle-class count on a global scale.

A growing middle-class means emergence of middle class characteristics – more spend on travel, holidays and gifts for family. This is why companies are spending to build credibility early on as reliable brands and influence the behavior of future generations.

This is also what makes the archipelago such an attractive and exciting market.

Shopping peaks during Ramadan

Given the growing popularity of ecommerce across the mobile first region, what trends can we identify in online buying behavior during Ramadan such as what device are they shopping with and at what times?

As soon as the sun goes down, the spending spree begins. Data from aCommerce Ramadan in 2017 show that mobile browsing on ecommerce sites peak at 4-5am and 5–8 pm when people are sitting in traffic.

Ramadan 2018

While the average web session length is longer on desktops, there is more traffic coming from mobile during Ramadan making a great mobile UX important to encourage conversions.

The data also shows that males tend to browse more than females, but females have a higher conversion rate. While marketers should tailor campaigns appealing to both, converting males can be a bit trickier.

Ramadan 2018

Males tend to appreciate a straightforward and simple online shopping versus social and comprehensive experiences. They also buy based on logical steps (versus emotional) and like to research before buying, which can account for the increase in browsing activity.

Capturing the Ramadan shopper

Based on our survey, the most popular online channels for shopping during Ramadan are Shopee and Lazada Indonesia.

While the top players have moved past the question of whether they should have an official online presence, having a shop-in-shop isn’t enough given the number of sellers available.

Questions brand managers need to ask themselves include: how well do my products rank in search? What’s my pricing strategy? How are my product reviews? How attractive is my brand presence? How quick is delivery?

Consumers in Indonesia shared the top three reasons that would convince them to shop online more often.

  1. Special Ramadan promotions on products they need i.e. food and fashion
  2. Payments option cash on delivery
  3. Same day delivery with no additional fees

Sites that did not feature lower priced items suffered a hit in conversions. Indonesians are price conscious and even with disposable income from their bonus, thriftiness is a major factor in consumption behavior.

While it is okay to mix normal priced items on the homepage, lower priced items should be brought to the forefront. This is a great time of year to flush out inventory.

Ramadan 2018

Logistics and payments remain the toughest challenges in Indonesia ecommerce due to infrastructural immaturity and lack of financial knowledge. Most companies have been smart to outsource the two pain points to improve their shopping experience efficiently.

Ideally, fulfillment partners should have a strong local footprint across Indonesia through hubs/sorting facilities and offer multiple payment options to shorten delivery times and give customers flexibility.

Ramadan retail takeaways

During this period, retailers, brands, companies, social merchants are all vying for the same consumers making competition fierce. Everyone is spending more in hopes to catch more customers.

Because not every company has million dollar budgets to burn, marketers have to be smart with their spend and the first step is understanding consumer habits and preferences.

Here’s what you should know today.

1. Online retailers in Indonesia records big sales for Eid season. 

Blibli and Blanja.com have reported a significant revenues from sales during Ramadan this year, as Indonesian tend to shop more to celebrate the occasion.

The former have recorded a 200% increase in sales compared to the same season last year, with most popular categories included Muslim attire, beauty products, food and beverages products, and automotive parts. Blibli’s special offers like Eid packages and free express shipping also contributed to the boom.

Meanwhile, Blanja.com who underwent a huge change in its branding earlier this year, recorded a 78% increase in sales.

Read the full story here.

2. Stripe strikes a global partnership with Alipay and WeChat Pay.

Silicon Valley-based payment startup Stripe has partnered with Alipay and WeChat Pay and enable online merchants using the platform to accept payments from hundreds of million Chinese consumers.

The partnership also coincides with the company’s launch in Hong Kong.

The deal is hoped to boost the revenue by allowing clients to tap into the massive Chinese consumer market. Tencent’s WeChat Pay is recorded to have 600 million users, while Alipay, who is part of Alibaba’s Ant Financial, has recorded of 520 million users.

“If we can help a business double their sales, then it doubles our revenue from that business,” said John Collison, President and Co-Founder of Stripe.

Read the full story here.

3. Droom is expanding to Indonesia after closing $20 million of series C round

An online marketplace for used automobiles, Droom, announces its plan to close a few acquisitions by the end of this year and its expansion to Indonesia. The company is planning to spend about $8-10 million from its freshly $20 million fund for the acquisitions.

“We are planning 2-3 acquisitions this year.. [and] we have been in talks with several companies,” stated Droom’s founder, Sandeep Aggarwal.

The company has been planning its expansion to Indonesia last year but the delayed the plan as it’s still trying to strengthen its hold in India. In addition to Indonesia, they are also planning to open in Malaysia, the Philippines, Thailand and Singapore.

Read the full story here.

Here’s what you should know today.

1. Adidas has nearly doubled its US sneaker market share

According to data from retail researcher NPD Group, Nike’s share of the US athletic footwear market was 34.7% last month, a dip from 35.9% in May 2016.

Adidas? Its share nearly doubled year over year, from 6.3% in May 2016 to 11.3% in May 2017.

To be sure, Nike is still the top sports apparel dog in America. It sells more shoes in the US than Adidas, plain and simple. (In 2016, Adidas had $3.6 billion in US revenue, a 24% gain; Nike did more than three times that much.)

But after a bad run of declining market share in the US from 2011 to 2015, Adidas is now steadily eating away at Nike’s dominance.

The biggest reason Adidas is on the rise is because of an industry trend that benefits the brand: casual sportswear. That refers to both apparel and sneakers, and Adidas has always been known for streetwear, or as the category is called these days, “athleisure.”

Both brands have also doubled down on their ecommerce efforts, with Nike having official online presence across the globe, and considering to sell on Amazon. Adidas also has a worldwide ecommerce presence.

Read the rest of the story here.

 

2. Philippines’ Acudeen receives $6m fintech financing deal

Early-stage fintech firm Acudeen Technologies has sealed a $6 million financing deal with Rizal Microbank, a unit of Philippine-listed Rizal Commercial Banking Corp.

The money will finance the invoices and receivables to the startup’s network of small and medium enterprises in the Philippines.

Bong Roxas, Rizal Microbank president said the biggest problem of SMEs in the country, who are mostly unbanked and underserved by banks, is how to access affordable credit. “With this partnership, we’ll be able to reach out to more MSME business operators. It is really aligned with our enhanced business model,” Roxas said.

Read the rest of the story here.

 

3. Recommended Reading: Ramadan is the holiday high season for modest fashion brands

London- and Dubai-based The Modist, a luxury e-retailer that launched this spring as a Net-a-Porter for the modest set, has noticed a similar gravitation toward fun, expressive style among its customer base during Ramadan.

“For women who celebrate it, it’s their version of the holiday season, so their shopping trends shift, and they really go all out,” says Sasha Sarokin, the company’s buying and fashion director.

Read the rest of the story here.

Ramadan is heavily identified with shopping in Indonesia. A visit to malls during this month will reveal heavy discounts and promotions at every store. Midnight sales are especially abundant and held after people receive holiday bonuses to lure people to shop more.

The rise of e-retail options in the country has only made it easier for people to do their shopping whenever and wherever they are. Indonesia also passed the Halal Product Certification Bill in September 2014 that requires all products be halal-certified by 2019. Brands like Unilever and L’Oreal Indonesia have already begun to comply.

A case study conducted during Ramadan a few years ago shows that traffic to ecommerce websites peak at 4am as people woke up earlier during Ramadan to start their day.

What other behaviors are observed during Ramadan? aCommerce shares data from 11 ecommerce companies selling fashion and beauty products to understand shopper trends during Ramadan last year.  

More people are online during Ramadan

To seize the building momentum, ecommerce companies allocate more budget for marketing activities to drive traffic to their website. Below is an example:

Ramadan Shopping Behavior

Example of promotional banner on the website for Ramadan 2016

Ramadan Shopping Behavior

Promotional banner for Ramadan 2016 on Facebook

Results from last year show there was a 52% increase of website visitors and 60% newly acquired users during the month of Ramadan compared to the previous month. Many companies often offer exclusive promotions only if a user signs up on the website.

Ramadan Shopping Behavior

People are more likely to shop online in Ramadan compared to the months before and after.

Indonesians shop for Eid during work

Compared to the 40 days before Ramadan, the number of sessions on most websites surged to 4 times higher on the weekdays as people browsed during the day – traffic was noticeably higher during work hours.

Ramadan Shopping BehaviorMeanwhile, sessions on weekends are relatively the same overall as Indonesians typically spend more time with friends and family.

During the last week of Ramadan, the traffic surges begin to slow down as Indonesians know some merchants will undergo a “blackout period” where no packages are delivered around the time of Eid in preparation for Eid Exodus.

More men shop online than women

Ramadan Shopping Behavior

Contrary to popular belief, men were found to spend a longer time browsing online than women. However, females were almost twice as likely than men to convert during a web session.

Both sexes have a similar basket size of IDR 230,000 or $17 per transaction.

On average, the amount of time people spent per session  was 3% lower than average to 4.4 minutes and traffic and sales from desktop still dominated over mobile.

Desktop generated 76% of total sales on Ramadan, while mobile only generated 22.3%.

As we’re currently in the midst of the holy month of Ramadan, ecommerce companies should be aware of shopping trends to maximize their marketing budgets and add more value to their shoppers to build customer loyalty.  

For example, promotion activities should be scheduled during the weekdays when shoppers are proven to be at their most active and more focus should be spent on capturing a wider male audience as current online options are still not as abundant.  

Happy Eid shopping!


Join eIQ Network for more insights here.

Ramadan, the time of year when Muslims around the world fast from dawn to dusk, is only six weeks away. The holy month is not only for reflection and prayer through the Islamic world but surprisingly also one of the busiest shopping seasons for businesses.

Online sales and web traffic have been especially profound for online businesses with a rise of 77% and 110%, respectively, during Ramadan last year. With approximately 240 million Muslims in Southeast Asia, the upcoming holy month means more eating, praying and shopping.

But what are observers of this religious festival shopping for? When and where can businesses reach them? Facebook has shared a presentation that contains insights about users during Ramadan. Here’s what to keep in mind:

Shopping peaks before, during and after Ramadan

Ramadan falls on May 27 to June 25 2017, however, sales increase both pre- and post-Ramadan offering businesses a period of nearly three months to capture the attention of potential buyers.

According to Facebook, the pre-Ramadan phase this year falls from April until May 26 followed by the holy Ramadan month, while the post-Ramadan phase falls from June 26 to July 31.

Pre-Ramadan

People start browsing to discover products as early as April, but shopping peaks in the Ramadan month, by as much as 27% compared to the season average in 2016.

Women especially are looking for tips to decorate the home, create a new dish or buy a dress, so it’s best to reach them through online campaigns when they begin prepping for the celebrations.

The pre-Ramadan period is good for offering things like household cleaning supplies as people embrace “purity” and “cleanliness” preparing to welcome Ramadan. The week before Ramadan, people will stock up on food and beverages.

Mobile is the observer’s best friend

  • 60% of Indonesians use the mobile during this season to connect with family and friends. Family, food and the home dominate Facebook conversations.
  • 86% of Indonesians access the internet via the mobile.
  • 96 million people access Facebook monthly on mobile making the platform a smart marketing channel.  
  • More service-based apps are downloaded during and post-Ramadan for a stress-free (28% increase in installs in June, 26% in July).

The Ramadan shopper

The focus is on women during this time of year as more activities become stressful in Ramadan. They include:

  • Keeping a tidy home (30.6%)
  • Cooking (30.4%)
  • Dressing well (27.9%)
  • Entertaining family/friends (19.5%)
  • Being a parent (14.9%)

And because they tend to miss out on relaxing (29%), watching TV shows (20%) and spending time with family/friends (16%), they turn to the mobile to post on Facebook and 50% look for inspiration during Ramadan.

Women namely discuss family, food and beverage and the household in Facebook conversations. The most popular Instagram hashtags during Ramadan include:

  • Hijab, Hijabers, Hijab fashion
  • Fashion
  • Dress
  • Kemeja (shirt)
  • Bajuanak (children’s clothes)
  • Holiday (more local destinations than global)

The most popular shopping topics among women:

  • Clothing – particularly for new clothes for Eid/Lebaran
  • Electronics – TV, Playstation and mobile phones (particularly Samsung)
  • Gifting and promotions

How to reach this demographic? Facebook has shared a handy table for setting up ad campaigns and the topics/keywords to focus on to provide convenience to observers:

Other tips to reach more Ramadan browsers

eIQ case study a few years back found that web traffic peaks in the early hours of the day so boosting online promotions and offers between 3AM to 6AM will be more effective than scheduling those for later in the day.

Digital marketing is a good way to send your brand message to customers during this period, especially if it’s optimized for the mobile device. Businesses also need to be aware that if they are connecting to their audience during this religious time, content should be appropriate and sensitive while providing as much convenience as possible.

  • Inspire with best Ramadan deals: tips for decorating the home, healthy recipes, stylish dresses
  • Begin campaigns early: Start as soon as April (now!) before it gets to Ramadan crunch time.
  • Be a problem solver: Women are stressed about cleaning, cooking and dressing well. Be creative, bundle cleaning supplies with home delivery and curated fashion solutions.

Be it marketing through Facebook, email or any other channel, this is a helpful checklist for optimal marketing efficacy:


Join the eIQ Network for more exclusive insights here

The Ramadan Ecommerce Case Study  revealed that, despite the holy month, Ramadan is a time of the year when ecommerce activity surges. Survey from this year shows that most of the ecommerce shopping happens before the last week of Ramadan, when malls hold night sales.

UC Browser, a service provider of mobile Internet software, part of Alibaba Business Group, announced that ecommerce traffic during the month increased by about 53%. Additionally, 81% of mobile internet users in Indonesia visited shopping sites online at least once in the last four weeks, and half of the respondents access ecommerce more than three times per day.

Ecommerce traffic during Ramadan increased by about 53%. Additionally, 81% of mobile internet users in Indonesia visited shopping sites online at least once in the last four weeks, and half of the respondents accessed ecommerce more than three times per day.

Based on the UC Browser survey, 83% of online shoppers start surfing online before the third week and the last week of Ramadan, where malls usually hold night sales, according to Kenny Ye, GM of Alibaba’s mobile business group, Global Markets.

This aligns with the MasterCard survey in 2015, that shows that Indonesia is one of the top countries in Asia Pacific that use smartphones to shop online, with more than 50% of respondents Indonesia shopping via mobile phones. DailySocial also confirmed this statement, as they cite Indonesia as the largest contributor of mobile commerce in Southeast Asia.

A version of this appeared in Bisnis.com Indonesia on June 30. Read the full article here