Posts

Here’s what you should know today.

1. 11street Thailand shares growth strategy

Thailand’s ecommerce market is expected to expand to $2 billion (86 billion baht) this year and to continue to grow, eventually reaching $6 billion (213 billion baht) in 2022, accounting for approximately 5% of retail business in Thailand.

11street has been getting 14 million visits within 42 days, but ecommerce is still only at 1% penetration rate, which highlights the high growth potential. This year, the marketplace is spending over $28 million (one billion baht) on marketing alone.

Read the rest of the story here.

 

2. Chinese ecommerce website Vipshop is a company no one talks about

Vip.com has managed to turn the  business of flash discount sales into a high-class luxurious experience, adding in brand cachet and solid delivery.

While JD.com and Alibaba are both pushing into fashion retailing, Vipshop’s early-mover advantage in flash sales has helped it build some critical mass, not only among shoppers but among brands looking to clear inventory while lacking the offline outlets commonly available in Western markets.

The result has been an average 71% sales growth over the past 10 quarters and continuous profitability for the past four years. But why aren’t people talking about it?

Read the rest of the story here.

3. Jay Z is planning a VC fund

Rapper Jay Z is building the fund with long-time partner and Roc Nation co-founder Jay Brown. They plan to focus on seed investments in young startups. With help from Sherpa Capital, founded by Uber’s early advisors, Jay-Z will have all control with his own brand.  If Jay Z’s upcoming fund can leverage his branding expertise and promotional influence, it has a chance to do very well.

Read the rest of the story here.

 

4. Unilever Indonesia launches on Tokopedia

Following a launch in personal care and baby products on Shopee’s mobile marketplace, Unilever has announced its most recent launch on marketplace Tokopedia, citing ecommerce solutions provider aCommerce as its fulfillment partner.

Unilever has taken a marketplace approach across Southeast Asia, not having yet committing to a direct-to-consumer approach. Most recently, the company made headlines when Kraft-Heinz dropped acquisition attempts.

Read the rest of the story here.

Before you wind down from your day, here are the ecommerce headlines you should know.

1. Shopee marks rapid growth in Southeast Asia

Southeast Asian pure-play m-Commerce operator Shopee says it has reached $1.8 billion in annualised GMV just a year after its launch.

App-based Shopee operates in Singapore, the Philippines, Malaysia, Indonesia, Thailand, Vietnam and and Taiwan.

The Garena-backed company says it has achieved a month-on-month growth of 43 %, with 25 million downloads of its mobile app to date and 65 million product listings.

Read the rest of the story here

 

2. Retail ecommerce small but growing in Vietnam

However, despite all the optimism and the strong growth forecasted, retail ecommerce would still account for just 5% of total retail sales by 2020, if the target were to be reached, which puts Vietnam well behind Western countries.

Read the rest of the story here

 

3. Recommended Reading: Southeast Asia’s ecommerce future

The rate of digital adoption in Southeast Asia is unmatched. The Philippines sends more texts than any other country, and Jakarta is the world’s No. 1 city for tweets. There are more than 250 million smartphone users in the region.

Read the rest of the story here

 

 

For online shoppers, 11.11 has become a shopping phenomenon. The biggest online sales event of the year in China is co-opted by ecommerce giant Alibaba, where discounts from participating sellers range from 25% – 70% off, and a record $5 billion of products were sold in under 90 minutes last year.  

The company, which owns online marketplaces Tmall and Taobao sold $14.3 billion worth of goods during the sales period last year, targeting 386 million annual active buyers – a number greater than the US’s general population.

According to Fortune, the campaign is quite accurately labelled “Black Friday on steroids”.

The combined earnings of Black Friday and Cyber Monday, North America’s famous sales period, amounted to $7.54 billion last year, and while impressive, only amounts to half of Alibaba’s earnings in the same sales period.

11.11 southeast asia

11.11 Cultural Backstory

Singles’ Day originated in Nanjing University in 1993 where groups of young single friends would get together and celebrate their unattached status by shopping. In 2009, Jack Ma, chairman of Alibaba Group, saw an untapped opportunity and created an online shopping event around young peoples’ behavior, framing it as a day of personal indulgence.

‘Singles’ day’ was made famous and monetized by Alibaba, turning the obscure day into an online shopping extravaganza on its online marketplaces and boosting business during China’s slack period between October’s Golden Week and Lunar New Year in January to February. It was also introduced around the time ecommerce exploded in China, leading to a 5,740% growth in Alibaba’s “Double 11” sales event between 2009 and 2013.

11.11 southeast asia

The company has since trademarked the term in December 2012, meaning that it can take legal action against media outlets that accept advertising from competitors who specifically use this term.

11.11 sales also reach hundreds of millions of Chinese shoppers beyond large cities such as Beijing and Shanghai, who rely on Alibaba’s Taobao and Tmall because they are without big shopping malls in their towns.

The event’s offline marketing impact also contributes to 11.11 success thanks to appearances from global celebrities such as Daniel Craig and Kevin Spacey for the launch event, which has been the company’s way of turning the shopping extravaganza into a sort of event to be celebrated.

For the first time since the launch of 11.11 campaign, Alibaba Group has announced that this year’s campaign will last for 24 days instead of 24 hours. It will also mark the first introduction of Alibaba’s virtual reality technology, Buy+ , which promises to transport shoppers to retail stores overseas through a VR headset. This year will also see the expansion of 11.11 to Hong Kong and Taiwan.

Alibaba’s 11.11 success means it comes as no surprise that Southeast Asia has followed in the footsteps of China. Despite it not being a day to celebrate single-hood, large online marketplaces have each adopted their own customized versions of Alibaba’s 11.11 campaign such as Lazada and Moxy (now known as Orami).

11.11 southeast asia

Online players are under pressure to perform and participate during this period as bigger brands and retailers begin offering better sales and greater discounts thanks to deeper pockets and larger number of merchants.

In Southeast Asia, marketplaces are using their big 11.11 spin-offs as a litmus test of how well they’re performing against competitors in local markets.

How Southeast Asia makes 11.11 their own

From hiring more manpower to ensuring that shoppers are well aware of the sales event, marketplaces push out social media strategies months before the actual sales event and calculate stock predictions to ensure the region’s largest sales event is a success. Here are how Southeast Asia’s biggest players successfully take advantage of the 11.11 buzz: 

Marketing blitz: Social personalization is key

As the largest ecommerce marketplace in the region, Lazada has adapted 11.11 by extending it with their very own 12.12 event on December 12th and coining it ‘The Online Revolution’, which started in 2012.

Lazada Thailand has seen a rise in their gross merchandise value (GMV), chalking up $40 million during 10th-12th of December 2015 and reflecting a gradual increase in participation from consumers.

Lazada Thailand saw a 300% increase in orders when compared to 2014.

“In Thailand, we notice that successful marketing channels are very social,” says Baptiste Le Gal, CMO at Lazada Thailand. “Customer relations management is the key channel to reach out to customers with personalized offers that match their interests.”

The consumer trend has shifted slightly in Thailand. Baptiste noted that electronic goods used to reign as the top selling category, but now more lifestyle centric segments such as health&beauty and home&living are moving faster on the platform.

Thailand’s high mobile adoption is also contributing to how consumers shop on Lazada.

“Mobile transactions accounted for 70% of the 400,000 items ordered during Lazada’s online festival last year,” commented Baptiste.

The mobile first market means that Lazada is focusing on the mobile aspects of its channels, and ensuring that Lazada’s mobile app is optimized for the best customer experience during the campaign period. The marketplace has also launched an advert, ‘make your dreams come true‘ in Singapore, gearing shoppers up for the big event.

Zalora, Rocket Internet’s fashion portal, also follows the Rocket formula by offering sales up to 80% off for both 11.11 and 12.12. Zalora Indonesia’s marketing strategy promotes online campaigns from October until the grand finale of 12.12, starting with Zalora Great Sale currently ongoing now, which shoppers can treat as a warm up to the main event.

“In 2015, overall sales for 12.12 increased by 30 times more than an average day, with participating brands seeing a drastic increase in sales even after the campaign was over,” says Priyanto Lim, Head of Marketplace at Zalora Indonesia.

11.11 southeast asia

But slapping big discounts on jeans and jackets isn’t enough. Zalora Indonesia also holds online competitions, provides extra giveaways and uses celebrity endorsements on social media as part of the big push to generate buzz around the sales event. Essentially, every customer facing channel is jam-packed with purchase incentives and triggers to drive sales.

It appears that speculations of brands feeling pressured to participate and make deliberate cost cuts to compete with other merchants don’t hinder the impact of the campaigns.

“Contrary to what articles suggest, brands are very willing to partner with us as they benefit from the extra traffic,” Priyanto adds.

Female centric marketplace Orami is focusing on curating original ‘Singles’ Day’ themed content and community to drive traffic to the site and engage shoppers rather than launch a big promotional campaign.

“To drive social media engagement, Orami will also use Facebook as a tool to create engagement with users through online games related to Singles Day,” says Shannon Kalayanamitr, co-founder and CMO of Orami.

Targeting a mobile centric region

Shopee, Garena’s mobile shopping platform, released its own version of the mega sale for the first time this year, coining it 9.9 on September 9th. Benefiting from a fast accelerating mobile market in the region, the platform targeted Thailand’s mobile first shoppers by progressively releasing specially marked down products throughout the day to keep shoppers anxiously clutching their mobile phones.

Shopee’s website even publishes a discount schedule ahead of time so shoppers can set up an alarm for the product they’re eyeing, creating a ‘ready-set-go’ mentality for shoppers to encourage competitiveness and in turn, more shopping.

11.11 southeast asia

Niche service providers jumping on the bandwagon

11.11 has also inspired online service providers in Southeast Asia to cash in on the online flurry.

Groceries on demand service provider, HappyFresh Indonesia, offered up to 30% off its most popular products in its marketing campaign last year.

11.11 southeast asia

And a recent addition to the online grocery scene in Thailand, honestbee, is currently working with popular Thai supermarket chain Villa Market to tap into the ‘necessary goods’ sector that includes everyday items such as water, fresh food and meat. These items will all be a part of the delivery service’s big sale campaign.

When groceries go on sale, shoppers tend to ‘stock up‘, especially when purchasing online as the selection is wider.

“We look at the purchase patterns of our customers to see what kinds of items are popular among shoppers. For example, customers in residential areas often order large volumes of mineral water and fresh fruit so we have to anticipate that these orders may spike during our 11.11 campaign,” said Piyawat Laiphithak, Marketing Manager at honestbee, Thailand.

honestbee is also playing directly on China’s ‘Singles Day’ gimmick as they plan to give away snacks such as gummy bears and popcorn for shoppers.

11.11 Logistics: What happens behind the scenes?

The phrase “it takes a village to raise a child” is fitting here, if we swap the child for a large scale online campaign. How do ecommerce companies ensure optimal functioning during this hectic time?

For ecommerce solutions provider aCommerce, the company plans approximately two months ahead to accommodate the spike in orders for clients that participate in the sales event.

“We increase our manpower by three times through temporary contracts and run 24-hour operations during spike times such as 11.11 to ensure customer demands are tended to,” says Phensiri Sathianvongnusar, COO at aCommerce Thailand.

The temporary staff are hired through an agency and receive 2-3 days of training for their specific tasks prior to the sales event.

During the spike period, aCommerce also uses its multi-shipping platform to tap into over 20 courier networks to ensure that deliveries are made on time, for the best rate and no order gets dropped, as time and speed are the most crucial things during the campaign period.

11.11 southeast asia

“Inventory planning is crucial to campaigns such as 11.11 and 12.12, so we use historical data from previous years’ events to determine what types of products tend to be popular during big sales and avoid stock shortage,” adds Phensiri.

For brands that are not participating in the 11.11 campaign, they are part of the express line which ensures that their products still remain a priority during the campaign period.

A league of our own

Using China’s 11.11 as a backdrop, Southeast Asia’s online marketplaces are carving out their own versions of the mega-sale but they cannot simply replicate Alibaba to find success.

Southeast Asia can potentially leapfrog China with the region’s explosive mobile growth and gaining middle-class. Big campaigns such as 11.11 can only grow in success every year as more consumers move online. Mobile first platforms such as Shopee are already moving fast and capturing the surging mobile market in Southeast Asia, mirroring the rise of mobile shopping in China, where 72% of purchases during last year’s 11.11 came from mobile.

The positive reception and the duration of the campaigns is a testament to the region’s growing appetite for ecommerce, perhaps an indication that we are positively inching away from China’s shadow.

By Anutra Chatikavanij

Garena, Southeast Asia’s most valuable tech startup, has closed additional funding from three new investors, reports Tech Crunch.

They include: SeaTown Holdings International, an affiliate of Singapore sovereign wealth fund Temasek, Indonesia’s GDP Venture and Mistletoe, a Japan-based fund.

The amount raised was not disclosed, and Singapore-headquartered Garena did not reveal a post-money valuation.

The company’s last valuation was $3.75 billion following a $170 million funding round in March from Khazanah Nasional Berhad, the Malaysian government’s strategic investment fund, and Chinese tech giant Tencent, a long-term, existing investor.

Garena is best known for the gaming business it started in 2009, which accounts for most of its revenue, but today it also operates a payment service, AirPay and social commerce app, Shopee.

While Garena didn’t elaborate a lot, it did reveal some notable figures for its two newest ventures.

Shopee has reached 1.4 million sellers and annualized GMV of $1.3 billion.

But Shopee’s GMV figure is being calculated using monthly figures rather than an entire year of sales, this means the figures may be somewhat distorted. The same applies to AirPay, which Garena said has an annualized gross transaction value exceeding $510 million, but again, this is an annualized figure.

Regardless, it highlights the fact that Garena is putting its significant weight into social commerce and payments.

The deal will see Taizo Son, the younger brother of SoftBank CEO, and SeaTown’s Archana Parekh join Garena’s advisory board.

A version of this appeared in Tech Crunch on September 5. Read the full version here

Starting as a gaming platform in 2009, Garena has steadily added feature extensions to its original platform, and making breakthroughs in ecommerce, messaging and payments, reports Tech In Asia.

The Singapore based startup has demonstrated its stronghold and established presence in the Southeast Asia region, an accomplishment uncommon for startups in the region.

Based on the talks given by Nick Nash, Garena’s Group President, there are four key important factors when attempting to conquer the Southeast Asian market:

1. Internal consolidation

Tightly integrating existing products should take top priority to ensure best performance output. Garena has no plans to launch new products since it has reached the maximum number it is able to handle, mainly by paying attention to the optimization of existing businesses.

2. Pixel level localization

Due to the segmented geography and complicated historical issues, the alliance of Southeast Asian nations doesn’t significantly alleviate the burdens of operating businesses across countries. As a result, it becomes a challenge to appeal to customers from different countries.

Resorting to a high-resolution strategy, or the ability to meticulously pinpoint the invisible distinctions, makes marketing campaigns more productive. Although this proves more costly in the short term, it will pay off in the long term. Low resolution strategy may be more cost efficient, but will not lead to a deep understanding of local markets.

3. Pursuits of profit growth

For Garena, the two metrics of revenue or Gross Merchandise value (GMV), do not represent the translation of cash flow and profitability for the company’s projections. In other words, a company’s real progression is only reflected in profit growth.

4. Integration of data

Garen’a most valuable assets is data itself. This is largely because of its application gives a company deeper understanding about the market. With data acquired from the gaming platform, Garena+ and Shopee, Garena now has the potential to predict customer behavior. The integration of data could accelerate its product development and company growth, owing to a more accurate outline of a customer profile.

With these guidelines in mind, startups can find the key takeaways and come up with better tactics to cement their footing in an increasingly competitive landscape.

A version of this appeared in Tech In Asia on July 29. Read the full version here.

Shopee empower mothers in Malaysia

source: Shutterstock

GARENA online-backed C2C (consumer-to-consumer) marketplace operator Shopee has set aside $250K (RM1 million) to help mothers in Malaysia become entrepreneurs.

They are hoping to overcome the three most common barriers these ‘mompreneurs’ face; high cost structure, insufficient knowledge on how to sell online, and lack of marketing exposure.

“With the extension of our free shipping programme, expansion of Shopee University, and increased marketing efforts, we hope to have 10,000 mompreneurs on Shopee by end-2016,” said Ian Ho, Shopee regional managing director.

Shopee Malaysia is collaborating with the Women’s Aid Organisation (WAO), a non-profit organisation that provides counselling and shelter for abused women and their children, to support mothers who want to start their own online business. Empowering women is an important move as they’re alone create an untapped market of $2.4T in Southeast Asia.

Syllabus for Shopee University for the Malaysian market is similar to the one in Singapore, with three tiers: Beginner, advanced and expert. The beginner stage would be how to use and sell on Shopee, while the more advanced stages will include mentorship by Shopee professional trainers, including ways to tailor local Facebook and Google Ads.

National courier Pos Malaysia has also agreed to let Shopee use post offices across Malaysia to organise classes for its sellers and will help to educate on how to pack items properly before shipping them out. The number of classes will be increased between three and six per month from the previous one or two.

Shopee operates its C2C marketplaces in Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. It has seen over 13 million downloads of its app, and there are more than 26 million product listings across all these sites. In Malaysia alone, they have over one million users and one million product listings on our platform. While eventually plan to monetise the platform, they are focusing on customer service, and building the platform and the ecosystem for now.