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Gone were the days when millennials are the center of attention.

Projected to make up 40% of the global consumer base by 2020, Gen Z, those who were born between 1995 and 2010, is the new focus for brands around the world to market to. In Southeast Asia, this generation accounts for 277 million of the region’s 660 million population, with over 50% spending more than $30 a month on online shopping.

In his book, ‘The Gen Z Frequency: How Brands Tune In and Build Credibility’, Gregg L. Witt’s highlights the needs for brands to look beyond the confines of traditional segmentation and focus on cultivating relationships when targeting the consumers from this cohort as they are driven by sincerity and authenticity from brands and its marketing tactics.

What makes them tick?

Growing up with ready access to the Internet doesn’t make Gen Z be more inclined to do online shopping as the connectivity of it all also make them more impatient. They want what they want when they want it.

However, access to smartphones and the Internet do keep them well informed and they care more about the end-to-end brand experience, especially one that have close ties with their social values.

Being digital-natives, this generation is more attuned to technological development and constantly craving new experiences the technology can provide for their shopping journeys such as voice and visual search. The latter part is especially popular when paired with social media, another influential aspect in the life of Gen-Z. 33% of them said they’ve made a purchase after seeing the production social media.

Snap’s Eagle feature that sends users to Amazon’s app or site to buy the product they scan; TechCrunch

“Because they came of age with online shopping and branded social media campaigns, they have even higher expectations for digital shopping experiences,” – Forbes

Platforms like Facebook and Instagram are already capitalizing on their users. Facebook Marketplace already has 800 million users on its platform, making it one of the biggest competitors to existing marketplaces and increasingly important for brands to turn their social media fan page into a sales channel.

It’s about the experience

In Southeast Asia, it’s increasingly common to see ecommerce players and brands employ more creative tactics in the hope to engage their youngest audience.

Taking a page out of Alibaba’s book, Lazada went all out for their 7th birthday celebration, dubbed as the Lazada Super Party, with the performance from 2019 Grammy winner Dua Lipa and several local celebrities to create a “shoppertainment” experience for their shoppers across the six markets via live-streaming.

Gamification is also a popular strategy used by companies to engage consumers from this generation. From ecommerce players like Lazada, Shopee, and Qoo10, as well as ride-hailing app Go-Jek, they’re all employed in-app games to provide a more interactive way for their consumers to earn rebates and points to shop on the platforms.

The entertainment features e-marketplaces across the region introduced to enhance the in-app experience

Meanwhile, cosmetics brand L’Oreal partners with Watsons to introduce an in-app virtual make-up testing service on Watsons’ mobile application across Asia. The feature lets consumers create their own looks, capture it in photos and videos, then ordered the products they use to create the looks.

These experiences are only some of the examples of a unique selling proposition that can attract this generation and it’s important for brands to be more flexible in trying something new in order to appeal to the consumers. Every generation presents a different challenge for brands to stay relevant and with the authenticity the Gen-Z expects from brands, this generation may take you on the experience of a lifetime.

Compared to the other Southeast Asian countries, not much is known about Myanmar’s market potential.

Despite being late in joining the world wide web, the country’s internet penetration grew 97% in one year, reaching 26% of the population, roughly 14 million users.

eIQ speaks with Win Nander Thyke, founder and CEO of rgo47 — one of the leading online retail companies in the country — to shed light on the country’s retail potential, evolving Burmese shopping behavior, and why she believes strongly in the market’s future.

Realizing Myanmar’s new consumer

Rgo47, initially Royal Golden Owls (RGO), was introduced in 2013 during Myanmar’s inaugural hosting of the biennial Southeast Asian Games (SEA Games).

By leveraging her family’s fashion business, RGO was responsible for producing the official merchandise for the SEA Games such as t-shirts and fashion accessories to be displayed and sold at the two-week event.

Myanmar ecommerce market

Official SEA GAmes Myanmar banner with RGO as a sponsor.

It was the right opportunity to send a positive image of Myanmar and reach a large audience with her new apparel brand as one of the official event sponsors and operators.

And it was during this time the company first observed a shift in consumer behavior that signaled the beginning of online retail potential in the country.

“People would email us or contact our Facebook page to ask if we were able to deliver the SEA Games souvenirs to their homes,” said Win. “At the time, we didn’t have the resources to do so and didn’t think that our Myanmar people would be interested to shop this way that early.”

Fair to say so considering only 1% of its population was connected to the internet only a few years back.

RGO, now rebranded to rgo47, decided to launch its online channel in April 2014 — the year that marked the country’s “Mobile Revolution” when mobile penetration jumped to 83% in only five short years.

Through its ecommerce channels to this day, the company continues to sell its most popular category: fashion apparel that includes everyday apparel, sportswear, shoes, and bags as well as its most recent category additions: cosmetics, kitchen appliances, and electronic and home office goods.

A uniquely Facebook-first market  

Given Myanmar’s reputation for being a Facebook-first country, the company set up a Facebook page and website as its first online channels.

“Facebook is very integral to the Burmese daily life that it’s almost useless for us to have a website,” said Win “I’d say 80% of our transactions come from Facebook.”

Myanmar ecommerce market

rgo47’s main Facebook page

According to Win, a native Burmese herself, a majority of consumers in the country require a personal touch, which usually means human interaction while placing their orders.

To cater to this need, the company employs 42 telesales personnel – out of 122 employees – to communicate with customers through phones and chat applications including Facebook Messenger, and the country’s favorite, Viber.

Win is trying to lessen its reliance on a labour intensive transaction process and anticipates a change in consumer behavior. The company released its mobile application earlier this May, already generating 11,000 (iOS) and 72,000 (Android) downloads.

However, even with this initiative, Win admits that shoppers still prefer the company’s Facebook page, pretty evident as the rgo47 page holds the largest audience in the country.

Myanmar ecommerce market

The company has the largest Facebook audience in Myanmar, leaving behind even earlier player Rocket Internet’s Shop.com.mm and Kaymu

Evolving Burmese online shopping behavior

A preference for Facebook is not to say that the Burmese are resistant to change.

While cash-on-delivery (COD) was the most preferred payment method based on rgo47 records last year, the company saw a shift to more than 50% of its orders now being processed via other channels such as bank transfer and Wave Money – Myanmar’s top mobile financial service providers.

Although a step in the right direction, Win believes the country’s lack of ATMs can cause customers to travel long distances in order to complete a payment and has unfortunately resulted in many canceled orders.

Aside from low payments infrastructure, the country’s addressing system also presents the last mile challenge. While most of its customers reside in big cities such as Yangon and Mandalay, the company has seen an increase of orders coming from rural areas where the drop off locations are difficult to find.

“Outside of Yangon, it is really hard to find the address for customers. That’s why most ecommerce companies in Myanmar still need to give every customer a call to confirm their orders and exact location,” explained Win.

While Myanmar’s ecommerce challenges are not uncommon, Win says customers are loyal, especially after companies have proven their reliability.

More than 30% of rgo47’s monthly transactions come from returning customers.

Win believes that the reason they have such a high retention rate is because her company constantly seeks ways to cater to customer needs.

“Customer satisfaction is the only metric that really counts for us,” said Win.

Customer-obsession seems to be working as the company is currently experiencing two-folds growth in its annual number of transactions and expects volumes to increase as more Burmese pick up online shopping habits.

Possibilities for the future

Despite the hardships that come with nascent markets like Myanmar, Win feels optimistic about the possibilities yet to be explored in ecommerce and its potential impact on communities.

A big determinant of ecommerce success in the country rgo47 believes is working together with experienced ecommerce firms from other markets to learn and apply their best practices.

Win also encourages foreign players to get their hands dirty and enter the market while it’s still early to reap the most benefits.

“The Myanmar people are smart and very curious about new tech experiences,” says Win.

“Many companies hesitate to enter Myanmar because they think the people or the market is not ready but if you’re waiting until they’re ready, it means you’re already too late.”

Here’s what you should know today.

1. Facebook now has 2 billion monthly users

We’re getting to a size where it’s worth really taking a careful look at what are all the things that we can do to make social media the most positive force for good possible,” said Facebook Chief Product Officer Chris Cox.

Two billion makes Facebook the largest social app in terms of logged-in users, above YouTube’s 1.5 billion, WeChat’s 889 million, Twitter’s 328 million and Snapchat’s estimated 255 million.

Facebook’s growth the last half decade has been fueled by the developing world. The company has relentlessly optimized its app for cheap Android smartphones and low-bandwidth connections.

It’s added 746 million users in Asia and the Rest of World region since hitting 1 billion users total.

However, there has been some ramifications from Facebook’s road to success.

There are the big, newsy things like suicides on Facebook Live and fears that fake news got Donald Trump elected. But deeper down, there are even more complex ramifications of a near ubiquitous social network.

It can propel internet addiction that alienates people, and facilitate the filter bubbles that polarize society by reinforcing our opinions. Facebook has largely conquered its competitors, giving it the slack to finally address the modern sociological challenges that stem from its popularity.

What are your thoughts?

Read the rest of the story here.

 

2. Singapore fintech startup CredoLab raises over $1M to help unbanked consumers manage their credit

CredoLab said that the newly-raised capital — twice the amount it originally intended to raise — will be used to ramp up its product offerings and expand its operations to serve the underbanked population.

founded in 2016, CredoLab offers a credit assessment mobile app called CredoApp. This software tracks the “anonymised digital footprints”  of consumers and leverages on predictive analytics to generate their digital credit scorecards.

This solution is particularly useful in emerging market such as Indonesia, the Philippines, Malaysia, Thailand, Vietnam and Myanmar, where there is a significant unbanked demographic with no credit history.

Read the rest of the story here.

 

3. Mastercard offering merchants new payment tools

Mastercard Developers has released several new APIs (application program interfaces) to give merchants and other companies access to more than 40 proprietary products and services to enable payments on new platforms.

For example, the Masterpass Chatbot API is being used by FreshDirect, Subway and The Cheesecake Factory in the US to create payment-enabling chat bots on Facebook Messenger.

The mission with these efforts is to allow merchants to support new payment methods “without having to reinvent the wheel,” said Oran Cummins, senior vice president for APIs with Mastercard Developers.

Other new applications include one allowing merchants to accept cashless payments from their customers’ smartphones by scanning a Masterpass QR code.

The latest effort from Mastercard shows that the payments provider is set on scaling its services and pushing the envelopes of commerce, as well as providing innovative solutions for merchants.

Read the rest of the story here.

Here’s what you need to know today.

1. B2B platform Bizzy acquires small startup, replaces CEO

Indonesian ecommerce company Bizzy has acquired a startup called Alpha. The terms of the deal weren’t disclosed.

Bizzy supplies other businesses with office equipment, electronics and stationery in bulk. The little-known startup Alpha has expertise in things like raw materials and spare parts, making it valuable to Bizzy’s business.

Post-acquisition, Alpha’s CEO Andrew Mawikere will become Bizzy’s new CEO.

Bizzy’s former CEO, Peter Goldsworthy, will take on a new role as Bizzy’s president.

The acquisition will see Bizzy make way into new markets with direct materials and services relating to spare parts, adding to its capabilities of supplying office necessities.

Read the rest of the story here.

eIQ published a guest post by Hermawan Sutanto, Chief Commercial Officer at Bizzy Indonesia in November 2016. To read his insights on Southeast Asia’s B2B ecommerce landscape, click here.

 

2. Tencent zones in on Southeast Asia, invests in karaoke app Smule

Smule, maker of music and karaoke apps, has secured US$54 million in a round of funding led by Tencent.

Tencent is zoning in on Southeast Asia for new opportunities across the fast-growing region. Thailand is a primary focus, illustrated by the company’s joint venture with e-book platform, Ookbee at the start of this year.

Read the rest of the story here

 

3. Instagram launches mobile web sharing to pursue global growth

In pursuit of international growth where networks are slow and data is expensive, Instagram has given its mobile website a massive upgrade that adds core features of the main app, including photo sharing and a lightweight version of the Explore tab.

 The mobile web launch ties in with Instagram’s global growth strategy aimed at the 80% of its users outside the US. Other product updates in this vein include web sign-up, a better on-boarding flow for low-end Android users, and the recent addition of offline functionality.

This could benefit users in Southeast Asia, where social commerce counts for a significant portion of ecommerce sales, especially in Thailand, a country with over 7.8 million Instagram users.

Read the rest of the story here.

Indonesia’s young population is increasingly making more money year on year. Women especially have seen an increase in the employed rate from 46% of the working age of women population to 52% in a decade. What does this mean for businesses looking at this market? A growing opportunity for health, fashion cosmetics companies.

It’s no surprise then that Indonesia is named as the fastest-growing market for beauty in Asia in terms of compound annual growth rate according to the latest report by Euromonitor International, Markets of the Future: ASEAN in 2020. Domestic sales of beauty products in Indonesia totaled IDR 11 trillion or $818 million in 2015 based on data from the Ministry of Industry.

The country’s growth for Beauty and Personal Care (BPC) market has successfully outperformed its more mature sisters – China and South Korea  – as seen below. Indonesia’s Government Regulation No. 14 Year 2015 has also named the high performing sector as a primary mover of the future economy.

indonesian beauty sociolla

Indonesia is at the top of past growth of Beauty and Personal Care (BPC) markets in Asian markets. Source: Euromonitor

As the largest market in Southeast Asia with a GDP of $888.5 billion and a population of 250 million, analysts predict Indonesia could rise up to the top five markets for cosmetics in 10 – 15 years. While women continue to be the dominant shopper of cosmetics, the male market segment is steadily increasing and richer, younger generations are becoming regular consumers.

A player who has been in the game since 2015 is Sociolla, Indonesia’s first beauty retailer that offers brands such as Marc Jacobs, Laneige and Shiseido to go head to head with Sephora Digital. Chrisanti Indiana, one of the co-founders and CMO of Sociolla, shares the company’s story with ecommerceIQ.

Local versus international brands

International beauty brands and imported goods accounted for 60-70% of total 2015 domestic sales in Indonesia, roughly $441 million. Brands from the US experienced a 3% boost in total imports due to an increase in demand from Indonesians, particularly in Jakarta and tier-2 cities.

Popular Indonesian players like Mustika Ratu, Sari Ayu Martha Tilaar and Wardah are facing fierce competition with international household names such as longstanding L’Oreal, Unilever, and Sephora, Kiehl’s that have entered the market through specialty stores.

Reputation and name-recognition continue to be the drivers for cosmetics purchase in Indonesia.

indonesian beauty sociolla

Source: agnesoryza.com

Sociolla understands its Indonesian audience has low levels of brand-loyalty and more than 30% are willing to try a new product next purchase. This means the company consciously works with a variety of brands overseas and local brands, especially the up and coming ones like Polka and Rollover Reaction to attract more shoppers.

While personal care products from giant brands such as P&G are available even at the local mom and pop stores across the country, imported and niche cosmetics brands are limited to the big cities. The lack of an offline footprint outside big cities in Indonesia is causing people to turn online to find their favorite brands.

Channeling beauty online

WeAreSocial estimated 132.7 million Indonesians are now online and 48% of them use the internet to find products and/or services. A recent survey conducted by ecommerceIQ found that 57% of Indonesians shoppers start their product search on an e-marketplace like Lazada.

With so many Indonesians browsing online, it would make sense for brands to have a bigger presence on the web. However, there aren’t many options for personal care products online as shown in ECOMScape: Indonesia, the country’s ecommerce landscape by ecommerceIQ.

“The digital sector began to take off at the beginning of 2015 so knew we wanted to focus on a vertical. It wasn’t hard to choose beauty as I’m a beauty enthusiast and we didn’t see any strong players in the sector at the time,” says Chrisanti.

Going online was a no-brainer for the founders but convincing local and global beauty brands – many of them already established companies – was one of the biggest hurdles.

indonesian beauty sociolla

Educating brands like Menard and Bioderma to utilize the internet as a sales channel became the company’s standard operandi. To date, there are 197 brands registered on Sociolla’s platform and the team continues to work closely with each one to optimize product assortment and seasonal campaigns.

“I would say one of Sociolla’s largest achievements is unlocking the potential of these brands online and gaining their trust to work exclusively with us,” Chrisanti comments.

BLP Beauty is a local lipstick brand that sells exclusively online through an Instagram account and Sociolla platform. Through a series of marketing campaigns on Instagram, BLP was able to successfully sell more than 4,000 lipsticks in only two hours.  

indonesian beauty sociolla

Sociolla is also using content SEO to educate and attract people to visit the website using its ‘Beauty Journal’ blog. With more than 2,000 entries published on the blog since late 2014, Sociolla regularly writes about beauty tutorials, product reviews, and events.

The main site attracted more than 2.4 million visitors in March alone, leaving behind its closest competitor – Sephora Digital.

indonesia beauty Sociolla

Indonesia’s grey market

Brands were not the only ones they had to convince. Getting customers to shop on its platform was another hurdle they had to overcome.

“I think our fiercest competition is the grey market, especially popular sellers on Instagram because they can price items for very cheap while as an official partner, we adhere to brand guidelines to provide quality goods,” says Chrisanti.

In 2016, almost 70% of Indonesian internet users were using Instagram according to data from JakPat. It isn’t surprising that over 4 million posts show up in the search results for #kosmetik, the Indonesian word for cosmetics. Meanwhile, search results for #kosmetikmurah (cheap cosmetics) and #jualkosmetik (sell cosmetics) showed up with more than 3 million and 2 million posts, respectively.

indonesian beauty sociolla

Although prices may be cheaper, the biggest problem with these social sellers is the disappointing counterfeits and unlicensed products by the National Agency of Drugs and Food Control in Indonesia.

“Shopping online in the region has always been shrouded by trust issues. Through official partnerships with brands, we are assuring customers they can trust our products. Our relationship with the brands is our biggest advantage,” says Chrisanti.

BeautyLink is the company’s answer to a ‘regulated’ grey market. The marketplace is a space for certified third-party merchants to sell brands that aren’t being offered on Sociolla due to lack of local licenses, the number of minimum SKUs, etc. To ensure the authenticity and quality of the products, Sociolla does a careful check on all sellers during the initial agreement phase, monitors user feedback and regularly samples seller inventory.

Brands who want to manage their own online presence can also register on BeautyLink. The marketplace houses 480 brands, including The Body Shop, Jo Malone, and Clinique, which makes up over 8,000 SKUs.

Marketing channels beyond online

Aside from online marketing, the offline world plays a big part in its strategy. More than 50% of Sociolla buyers come from Java, followed by Sumatra (15%), and Sulawesi (5%).

To reach these markets, the company has hosted numerous activities such as Sociolla Soirée with the country’s top beauty bloggers/influencers, secret customer getaways, and organizing pop-up stores to try product samples.

indonesian beauty sociolla

Source: Behance

The company also participated in Femme Expo, the biggest Women Expo in East of Indonesia, by opening its own beauty section named ‘Sociolla Beauty Week’ and bringing portfolio brands from Jakarta to showcase products at the expo to 39,000 attendees.

A pretty bright future

The company recently raised an undisclosed Series B from Istyle, the Tokyo-based internet company with @Cosme, the largest cosmetics and beauty product community website in Japan, under its belt. In light of its second anniversary, Sociolla is using the money to improve Sociolla Box — a subscription model it launched last year as one of its marketing initiatives.

They currently have around 370 individuals registered for the service who will receive a monthly beauty package filled with 4-5 beauty products chosen by Sociolla. The ability for customers to customize the beauty box is in the works.

indonesian beauty sociolla

To further cement its standing as a beauty ecosystem and improve user experience, the founders have also built Sociovit, ecommerce for healthy lifestyle products such as vitamins, fitness supplements, wellness products, etc.

indonesian beauty sociolla

“Customer feedback is the company’s main inspiration for every new product we develop,” says Chrisanti.

The dedication to its users and emphasis on localization is propelling Sociolla well on its way to becoming the online beauty destination in Indonesia.

indonesian beauty sociolla

Sociolla founders. Left to right: Christopher Madiam, Chrisanti Indiana, and John Rasjid at Sociolla’s pop-store in Bandung

BY: RARA KINASIH

Here’s what you should know today.

1. Sun Life Financial acquires 25% of Vietnam-based digital bank Timo

Canada’s Sun Life Financial has acquired  25% equity of Crescent Asia Limited, the holding company of Global Online Financial Solutions, which operates Vietnam’s first digital bank Timo.

The partnership will be implemented directly through the insurer’s Vietnam-based unit.

Partnership with Sun Life Vietnam will let Timo offer life and health insurance products to its members.

Timo members will be able to apply for Sun Life Vietnam’s products directly in the Timo mobile app

Timo has been providing banking services, including payments, money transfer, savings and card management in Vietnam.

Read the rest of the story here.

 

2. Plug and Play is tackling the Southeast Asia ecosystem through partnerships

Silicon Valley-based startup accelerator Plug and Play is known for its sharp eye for investment opportunities, it has invested in names such as PayPal and Dropbox in the companies’ early days.

Now, the accelerator has its eyes on Singapore. This year, Plug and Play is ramping up its presence in the Southeast Asian region.

In Singapore, it launched an automotive industry-focused program in partnership with Daimler and Mercedes Benz called Startup Autobahn Singapore (SAS).

Plug and Play will expand the scope of its activities to larger markets in the region, as well as to support “multiple customized and bespoke programs” out of its Singapore office. Its next major regional focus this year is Indonesia.

Read the rest of the story here.

 

3. Ninja Xpress launches C2C logistics app Ninja Easy

The new app is aimed at making logistics easier for merchants that do social commerce.

Ninja Xpress is first launching in Indonesia and looking at Thailand as the next target

Ninja Easy wants to shorten the social commerce process by enabling sellers to upload details about their product on its platform, and generate a link that they can share to potential buyers.

This will eliminate the back and forth process between a buyer and seller via Facebook or WhatsApp. Buyers can directly hit purchase and track the shipping process real time.

Ninja Easy also has subsidized on-demand pick up service for sellers, and facilitate them with real-time tracking and cash-on-delivery payment option.

Read the rest of the story here.

 

4. Amazon will livestream the NFL this season, replacing Twitter

Amazon has reportedly reached a deal with the NFL to stream 10 Thursday Night Football games this year. The one-year deal is reportedly valued at around $50 million.

The ecommerce giant is making aggressive plays towards multiple industries this year, from fashion to groceries and now, entertainment.

Viewers will have to be Amazon Prime members in order to watch live, which is a departure from last year’s deal where games were available free for anyone on Twitter. It’s not yet clear how Amazon will display the stream.

Read the rest of the story here.