Posts

Brands in Southeast Asia are choosing leading marketplaces like Lazada and Shopee when trialing ecommerce, but most are still unaware of the intricacies of online channels. 

An often overlooked aspect to opening an official Shop-in-Shop (SiS) is the impact of customer reviews. Traditionally, brands have leveraged sources like Nielsen or focus groups to understand consumer behavior but one of the key advantages of an ecommerce store is the ability to analyze consumer sentiment right when it happens.

How much do product reviews really matter?

A 2017 survey by Podium shows that 93% of shoppers find reviews influential when buying online. 88% of consumers trust product reviews as much as a personal recommendation, and 72% say a positive review makes them trust an online business more.

An analysis of 57 million reviews and 35 billion product pages by the Buzzplant network found that increasing the volume of reviews has a tangible effect on your conversion, SEO, and product development.

“Any business owner knows that your most authentic and impactful advocate is a happy customer, and technology has made every customer’s voice extremely powerful,” says Eric Rea, CEO of Podium.

Source: Buzzplant

Impact on SEO

The volume and recurrence of product reviews has a direct correlation to search engine SEO. Moz found in 2017 that “Review Signals” affect up to 13% of how search engines rank results.

The factors that influence SEO include review quantity, review velocity, and review diversity.

In 2013, Google implemented the Hummingbird update, the most significant change to its search engine algorithm since 2001. The new code has far greater affinity for natural language processing and user intent as opposed to the earlier practice of ranking for keyword stuffing.

With Hummingbird, we can assume that product reviews that naturally feature conversational language are given higher search priority.  

Lazada incorporates quantity of reviews and average ratings directly into its Google schema markup. In layman’s terms, this means that consumers in Southeast Asia searching for products on Google will see product ratings and reviews directly in the results.

Lazada SKUs highlight average ratings and number of reviews directly in search results

The More “Helpful” the Review, the Higher the Ranking

We’ve demonstrated the tangible effect of product reviews on conversion and visibility but how many products do consumers read before purchasing?

According to a 2017 study by BrightLocal, 67% of customers read 4+ reviews, and 33% read 11+. Naturally, they’ll read the reviews that appear first on the product page – similar to how the first page of SEO results are the most lucrative.

How does Lazada sort reviews?

The first bifurcation Lazada applies is by splitting reviews into two categories: “Verified” and “Unverified”.

“Verified” reviews are those made by customers who have purchased the product in question and leave a review using the same account. “Unverified” reviews can be made by any visitor to the product page. The “Verified” reviews rank at the top, followed by the “Unverified” reviews.

Visitors to product pages can further “like” a product review by deeming it “helpful”. The most “helpful” reviews will rank at the top, meaning visitors to product pages are more likely to interact with “verified” and “helpful” reviews first.

Data analytics platform BrandIQ delved into the trend between review “helpfulness” and its star rating. By analyzing over 715,000 reviews across four Lazada country sites (ID, TH, PH, SG), it determined that, on average, lower ratings are deemed more “helpful” than higher ratings.

This inverse relationship is a critical reason for brands to pay close attention to its product reviews. Customers are far more likely to be reading negative reviews as their first 4+ rather than positive ones due to Lazada’s ranking algorithm.

What’s the possible recourse for brands?

After speaking with a Lazada support representative, there appears to be two underlying factors that cause the marketplace to take action on product reviews: the use of vulgar language or reviews that have no relevance to the product.

The first factor can be tackled relatively easily. Lazada itself has a quality assurance process to check each product review before it’s uploaded to the product page. However, the astronomical growth of reviews has made it inevitable for some to fall through the cracks. The week of 12-12 in 2017 garnered just over 34,000 product reviews alone.

The second factor is more complicated as they are evaluated on a case-by-case basis. Lazada’s technical team will entertain petitions to remove reviews that aren’t related to the product such as issues with delivery that stem from problems with the brand’s third party logistics partner.

To incentivize better service and product quality, Lazada provides a framework to incorporate product reviews into a store’s Seller Rating. This metric looks at the percentage of positive (4 or 5 stars) reviews compared to total reviews.

Lazada advertises Seller Rewards as a gift for high Seller Ratings: such brands will enjoy greater visibility of products in search as well as access to its promotional campaigns.

Lazada’s Seller Performance Metrics

What does this mean?

In essence, product reviews have multiple dimensions and a plethora of use cases. Not only are they taken into account by channels that drive traffic to your SiS, they can make or break a product’s conversion and directly affect your brand’s perceived trust.

Some brands are also leveraging reviews for digital marketing campaigns by incorporating them directly into the ad copy.

Different use cases for product reviews are emerging in digital marketing

Reviews are an under-utilised resource in Southeast Asia, but this might be on the cusp of changing. You could always hope a gem of a review goes viral, like this one:

With Alibaba’s acquisition of Lazada and Southeast Asia’s mirror-like ecosystem to that of China, it’s no surprise that the region’s more popular marketplace is moving towards a more Tmall-like model.

The largest sign being the opportunity for brands to design their own shop-in-shop – called Tmall flagship stores in China. They drive on-site traffic and simply optimizing shop-in-shop text and images can lead to maximum conversions.

In this article, we look at some best practices from popular Tmall flagship stores in China and explore opportunities for brands to improve their shop-in-shop performance on marketplaces in Southeast Asia, specifically Lazada.

Best Practices for Shop-in-Shops: Learnings from China

Tmall’s shop-in-shop concept called flagship stores – 天猫旗舰店 in Chinese – became officially available to brands in 2010. Ever since then, global and local brands and retailers have opened their own branded stores on China’s biggest ecommerce platform.

They include Apple, P&G, Estee Lauder as well as retailers like Costco, Macy’s and even Amazon.

Lazada Shop-in-Shop

P&G store on Tmall

Lazada Shop-in-Shop

Apple Tmall store

With the help of official TPs (Taobao Partners), agencies who help brands design and operate flagship stores, Tmall stores in China have undergone a massive transformation.

Although every brand has a unique Tmall flagship store identity, there are several patterns that successful brands employ that could be applied to marketplace presence in Southeast Asia, whether today or in the near future. They include:

  1. Bundling
  2. Rich, often video, content for branding, testimonials/social proof, and product tutorials/walkthroughs
  3. Coupons and promotions
  4. Flash sales and time-based offers
  5. Live chat (often split between pre-sales and post-sales live chat)
  6. Reviews management
  7. Unique store design
  8. Product detail page optimization (text, graphics)

Bundling

Bundling is a very common concept on Tmall brand stores because it helps brands achieve three things:

  1. Address channel-conflict, usually online, by creating ‘new’ products by combining them together into a single SKU.
  2. Increases average order values (AOVs) to offset delivery costs. This is frequently applied by CPGs such as Unilever, P&G and Coca-Cola whose products, if sold in single units, wouldn’t make sense for ecommerce.
  3. Quickly testing new product combinations and their traction. For offline retail, it often takes months to get new SKUs into the distribution chain and then another few months to get feedback from customers.
Lazada Shop-in-Shop

Example of P&G product bundling

Rich content for branding, testimonials/social proof, and product tutorials/walkthroughs

Tmall flagship stores have evolved over the last decade to become a viable alternative to brands’ creating their own ecommerce sites. Nowadays, Tmall allows brands to soup up their stores with not only banners and graphics but also more engaging videos.

Why is this important? Because viewers can be 64-85% more likely to purchase after watching a product video.

Below are examples of Estée Lauder and Johnson’s Baby using video on their Tmall flagship store homepages.

Lazada Shop-in-Shop

Estée Lauder home page on Tmall rich in content

Lazada Shop-in-Shop

Johnson & Johnson informative home page on Tmall

Coupons and Promotions

What is Tmall without promotions? Neutrogena’s flagship store has a dedicated section for coupons that can be redeemed and applied right away to increase chances of a browser converting.

Neutrogena coupons on Tmall flagship store

 

Johnson & Johnson’s Aveeno brand offers customers a chance to enter a lucky draw for each purchase.

P&G offers customers a gift set if they spend over 159 RMB, approximately $23.

Flash sales and time-based offers

Aveeno offers 50% off for buyers in the first 5 minute of its flash sale, limited to 1,000 units.

Lazada Shop-in-Shop

Live chat (often split between pre-sales and post-sales live chat)

Often credited as one of the reasons why Alibaba/Taobao was able to defeat eBay in China is live chat. Since the early days, Taobao offered a way for customers to talk directly to merchants through it’s WangWang chat platform.

When Tmall spun off from Taobao, WangWang was also applied to the B2B2C Tmall model. Nowadays, customers can login and chat directly with the customer service reps of a brand’s Tmall flagship store.

Neutrogena offers dedicated chat lines for pre-sales and post-sales live chat.

Lazada Shop-in-ShopReview management

Tmall allows customers to leave reviews after their purchase and also for merchants to reply to their customers. This offers brands a way to manage their online reputation – something most brands have engaged TPs to help manage due to high volumes.

Below is an example of Neutrogena’s TP helping address a customer’s negative review.

Lazada Shop-in-Shop

Store design

Having a great-looking and brand-aligned store design can mean the difference between a high and low conversion rate. In China, brands often engage TPs to help them not only manage but also design and decorate their stores.

Adidas’ Tmall flagship store design follows its brand guidelines so customers browsing the store will feel like they’re on the Adidas.com official brand site.

Lazada Shop-in-Shop

 

Product detail page optimization (text, graphics)

Product detail pages (PDP) don’t have to be bland and boring. Tmall’s official stores have taken PDP design to the next level by including high-res images, videos, customer reviews, company details/history, and much more. All this is to help increasing conversion rates by providing customers with as many relevant details as possible as well as establishing trust through brand consistency and social proof.

Left: Tide product detail page on P&G Tmall flagship store

Right: Tide product detail page on P&G Lazada Philippines shop-in-shop

Which one has a higher conversion rate?

Lazada Shop-in-Shop

Best Practices for Shop-in-Shops in Southeast Asia

Obviously, Chinese ecommerce and Tmall are several years ahead of Southeast Asia. However, as Lazada is already moving towards a Tmall model and offering more and more features to brands operating shop-in-shops, there are several best practices that can already be implemented for brands to benefit from:

  1. Brand-centric store design
  2. Rich (video) content
  3. Product detail page optimization (text, graphics)
  4. Onsite SEO
  5. Live chat
  6. Product sampling

Brand-centric store design

Launched as early as 2013, Maybelline was one of the first shop-in-shops on Lazada. As one of the pioneering brands in Thailand ecommerce, Maybelline’s Lazada shop-in-shop store design arguably is the most sophisticated, offering high-res, brand-aligned banners and creatives as well as video content.

Lazada Shop-in-ShopRich (video) content

Lazada offers YouTube video embeds that Maybelline has used to feature campaign and branding videos. Others like La Roche Posay are leveraging videos to explain how to use their products via walkthroughs.

Product detail page optimization (text, graphics)

Brands on Lazada still under perform in terms of PDP optimization. Most SKUs use only a few lines to describe the product and only a few brands have utilized images or videos to spruce up content.

Maybelline PDP on its Lazada Thailand shop-in-shop

Maybelline PDP on Tmall flagship store

Again, which one would convert better?

Onsite SEO

To gain organic traffic coming from Google and also from Lazada, brands should increase the amount of text on their homepage, category and product detail pages. Some of this is done by Lazada but brands should be actively driving this process, either directly or via partners.

Below is an example of the Maybelline Lazada Indonesia shop with footer text optimized for SEO.

 

Live chat

Live chat is pretty much the default standard on Tmall flagship stores but only a few brands are offering it on their Lazada shop-in-shops. One example is La Roche Posay who recently piloted a live chat feature on its Thailand Lazada shop-in-shop for a short trial period that has since ended.

 

Product sampling

Another unique feature that’s currently being piloted on some Lazada shop-in-shops is product sampling. Purina One’s shop on Lazada has a link out to a form where users can sign up to receive free samples. This is a great way for brands to not only acquire new users for their CRM database but also increase the exposure of new products.

As ecommerce continues to develop in our region, more brands are faced with the choice to set up on popular marketplaces or build their own brand.com website.

Setting up shop on marketplaces is more than simply uploading product pictures and hoping for a sale – it requires a similar strategy to setting up a brand.com. Businesses on marketplaces shouldn’t forget about the variety of tools available to them to influence sales and conversion rates and can either choose to do this themselves or partner with a specialist, “TP” in Southeast Asia.


Sign up for eIQ Brief to receive ecommerce insights weekly here