Posts

Vietnam expects to have nearly 100% of its households connected to the internet in the next five years. Currently, 94% of urban households and 69% of rural households in the country have access to the web.

A recent whitepaper from Kantar Worldpanel recorded a surge of 177% of people in Vietnam browsing the internet in their spare time – making the country an attractive for retail companies, especially the top 10% money makers.

Last year, 6% of urban households in Vietnam had shopped online for FMCG products and spent 3-4X more than when buying offline.

This year, 23% of high income families in Vietnam are planning to shop online more often — makes sense as they are able to afford the convenience of ecommerce.

Vietnam high-income householdThe Vietnam Ecommerce and Information Technology Agency (VECOM) expects 30% of the population will shop online in 2020 and that revenue from online will account for 5% of total retail sales, up from 2.8% in 2015.

Win over Vietnamese shoppers with social proof

Through an internet connection, customers will have easy access to a wealth of information that allows them to research before buying and making them more sceptical towards conventional advertising, especially in rural areas.

Vietnam high-income household

More Vietnamese customers do product research before buying. Source: Kantar Worldpanel

With 8 out of 10 people online everyday in Vietnam (Google, 2015), it’s natural for them to be exposed to targeted campaigns, a larger selection of products – especially on social media – and influenced by reviews from reliable community members and trusted Key Opinion Leaders (KOLs).

Social media has replaced search engines to become the more favoured ad channel for businesses in Vietnam.

Data from eMarketer shows ads in social networks to be more effective among digital channels such as news sites and mobile apps.

Vietnam high-income householdBabi.vn is a good example of how a brand can utilise Facebook to promote welfare, gain the trust of customers and increase conversions. The company created a Facebook page to build a community of mothers with young children to share their favourite products and reviews and driving traffic to the ecommerce site.  

Vietnam high-income householdThe Vietnamese also have a tendency to choose international and imported brands over local counterparts, stemming from the belief that they offer higher quality services and products. This makes the country an open battlefield for global companies.

This way of thinking has carried over to online shopping as well. E-retailing giants like Amazon and eBay carry better reputations over local ecommerce sites for their wide product assortment and easy return policy.

Vietnam high-income householdVietnam is a market largely overlooked by companies for its slow digital payments adoption and bureaucratic barriers to opening foreign-owned entities, but for the ones that have already set up shop within the country, the ecommerce horizon looks friendly.  

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 should know today.

1. Google is slapped with $2.7 billion antitrust fine by EU 

The European Commission – the European Union’s top administrative body and antitrust regulator – has fined Google US$2.73 billion for anti-competitive business practices.

The Commission found that the US company’s web search function gave undue prominence to its own price comparison service in search results.

The Commission has demanded that Google end this conduct within 90 days, or face additional penalty payments of up to 5 percent of the average daily global turnover of its parent company Alphabet.

Read the rest of the story here.

 

2. Indonesian ecommerce site Alfacart drops third-party sellers

Alfacart, the ecommerce endeavor of major Indonesian mini market and convenience store chain Alfamart, is changing its business model. As a result, Alfacart’s entire C-level management will resign.

What’s certain is that Alfacart will no longer operate as a marketplace after the change. It will only sell products already available in Alfamart’s own product assortment. That’s mainly groceries and everyday household items.

Mini markets work well in Indonesia. Growth of such retail locations is outpacing that of larger stores, according to rating agency Fitch.

Indonesia Stock Exchange-listed Alfamart operates more than 12,000 stores (link in Indonesian) across Indonesia and the Philippines.

Read the rest of the story here.

 

3. Online accounted for over 17% of China’s total retail sales Jan-May 2017

China’s total retail sales of consumer goods reached 2,945.9 $430.8 billion in May, up by 10.7% YoY. Online retail accounted for over 17% of total retail sales from January to May.

The retail sales of consumer goods in China’s urban areas was 2,536.0 billion yuan in May 2017, up by 10.4% YoY while that in rural areas was 409.9 billion yuan, up by 12.7% YoY.

 Of the online retail sales of physical goods, food, clothing and other commodities went up by 21.5%, 20.6%, and 29.2% respectively.

This puts China’s ecommerce market and potential at a much more developed landscape than other Asian countries, namely Southeast Asia’s developing markets. Brands in China have potential to capture a nationwide audience of both urban and rural shoppers who are discovering brands on WeChat and Tmall, whilst also being very receptive to online payment platforms.It seems that ecommerce in China can only get bigger in size and value.

Read the rest of the story here.

 

Known to a growing number of marketers, Instagram isn’t simply for documenting lunches or #throwbackthursdays, the social media platform is also a tool and platform for ecommerce.

And it’s relevancy to retail increases as Instagram released a function earlier in the year that allows ads within Instagram Stories – the social channel’s Snapchat clone.

Instagram has officially started selling ads through Facebook’s Ads Manager and Power Editor to allow brands to display ads within a user’s Stories feed that links out to a third party site.

The new direct response feature basically allows brands to allocate CTAs in their ads, directing a potential customer to their ecommerce page or to find out more about the brand.

The ads can be used to achieve a few objectives:

  • View the video
  • Visit a website
  • Install an app
  • Complete a specified conversion task i.e. adding a product to a shopping cart

How have brands used IG Stories overseas?

Dairy Queen

For its ad on Instagram Stories, Dairy Queen promoted its Blizzard ice cream using the caption: “Served upside down, or the next one free”.

Dairy Queens used Stories to target its demographic on the social media platform

Consumers targeted were between the ages 18 – 34 and depending on their interests, they would be targeted with different flavours of the ice cream. For example, those interested in carnivals were shown the Funnel Cake Blizzard.  

The campaign reached over 20 million people in the US and its effectiveness was tested using ‘ad recall’ tests – where a sample of respondents are exposed to an ad and at a later point in time asked if they remember.

Dairy Queen noted an 18 point lift in advert recall among 25 – 34 year olds, a group that responds more effectively with online advertising.

Ben & Jerry’s

Ben & Jerry’s specifically used Instagram Stories to promote its new product, Pint Slices, to target individuals in the US as the product was only available there.

Both Dairy Queen and Ben & Jerry’s took to Instagram Stories to promote new products and to increase conversions offline

The campaign drove up ad recall by 14 points, brand awareness by 6 points and created a 2 point increase in purchase intent among potential customers, according to Ben & Jerry’s Nielsen brand effect study.

Apart from ice cream brands, other companies such as e-payment device SumUp tested out the function.

SumUp’s Stories ad

The new ad function is currently being employed by a handful of brands in the US, and is gradually becoming more popular in Southeast Asia.

Considering the platform’s popularity in the region – Thailand has 9.1 million Instagram users, Indonesia has 28 million – brands have an opportunity to speak directly to consumers, without targeted consumers even following their page. Here are a few examples of what brands are doing in the region:

ZAP Clinic Indonesia

The image lists out promotions and a flash sale, and at the bottom provides a CTA: “See More” that takes curious visitors to its site.

KFC Thailand

By clicking on “Learn More”, customers are taken to KFC Thailand’s home delivery page, where a simple click of “Order Now” will have KFC delivered to the user’s home address in under an hour.

KFC Thailand had a clear CTA for Instagram users

As marketing channels become clogged with brand content, ads on IG Stories create a way for companies to better reach their already loyal consumers through content – especially seeing as viewers are anywhere from 64-85% more likely to buy after watching a product video. 

Google’s Brand Team for Consumer Apps has released a report on the definition of “Cool” for Generation Z in the United States. Unironically, Google has named the report “It’s Lit”.

Cool is what these Post-Millennials – teenagers aged 13-17 – are paying attention to, it’s what gets them excited and what determines which brands they choose to spend money on. This new generation has gained media attention because of their influence as truly digital natives with high degree of brand awareness. They are ultimately the next wave of shoppers.

Gen Z has the power to define which business has the capacity to do well and which will slowly fall into irrelevancy.

There are approximately 60 million Gen Z teenagers in the United States, more than 25.9% of the country’s population. Collectively, their purchasing power is at $44 billion annually and could reach $200 billion if we factor in their impact on household purchases.

As the influence of the United States can be witnessed throughout Southeast Asia from music taste and fashion trends to dining choices, businesses should be aware of what’s factored as ‘cool’ in the west because it will very likely make its way east.

Pink represents female choice. Blue represents male choice. Source: It’s Lit report.

So what do these teens find cool?

“Cool” in Google terms means to bring joy or happiness and stands out from everything else.

According to 13-17 year old boys, they find: technology, sports/outdoor activities and video games the coolest (no surprises here) and choose their activities based on friends and fads.

According to 13-17 year old girls, clothes/fashion/beauty, music and technology rank among the coolest activities because of the way it makes them feel.

Brands such as NYX is popular with younger girls as it is affordable, sold at mass stores such as Target and has a strong online presence, as they tap into the influence of bloggers and social media.

Out of the biggest brands circulating around today, Youtube was ranked as the ‘coolest’. Out of the top 10, six of them involve digestion of media i.e. Netflix, Xbox, Google, Playstation, GoPro and Chrome.

Source: It’s Lit report

The other brands on this list are consumer brands with a strong online presence. Doritos, for example, released the most viral advert during 2016’s Superbowl and Oreo has successfully reinvented its traditional ‘pantry’ brand to become “an agile, culturally prolific marketer”.

This was thanks to Oreo’s aggressive pushes online through its “Twist, Lick, Dunk” mobile app and cheek-in-tongue tweets that garnered a lot of attention among young people. The app became the the best performing branded game ever launched.

“We have a lot of mature brands and culture gives brands rebirth, it breathes life into the room,” says Dana Anderson, CMO of Mondelēz International, parent company of Oreo.

Social media use?

For Gen Z, social media is for consuming and connecting, not sharing.

The most popular social media platforms are Snapchat, Instagram and Facebook. And while this makes them potential marketing channels for brands, only Facebook has a streamline ad platform whereas Snapchat lacks the ability to accurately target certain audiences.

Source: It’s Lit report

New tools for brands range from Instagram stories to Facebook Live.

Being connected all the time means Gen Z consumers have a constant pulse on trends.

Below is a spectrum of brands ranked based on their prevalence in the minds of Gen Z out of 122 brands in total.

(Click to enlarge) Source: It’s Lit report

Tech companies with a ‘cool’ factor:

  • Facebook
  • Instagram
  • Samsung
  • Amazon
  • Apple
  • Snapchat

Who has lost a bit of ‘cool’ factor?

  • Line (this would be very different in Asia, where 69% of its 1 billion active users reside)
  • Zara
  • Uniqlo
  • Lululemon
  • Supreme

What can businesses learn from this?

Gen Z never knew the world without the internet. Teenagers around the world today value stimulation, instant gratification and information and this in turn, changes the way brands need to position themselves.

Gen Z consumers are familiar with finding information and tech products, which means that brands need to appeal to this new wave of consumers by attaching a strong message to its product instead of trying to promote a meaningless item.

There are good ways to do this – see Nike – and terrible ways to achieve this – think Pepsi’s PR disaster with Kendall Jenner.

Among the top 10 brands that Gen Z strongly identify with, all have been documented to make efforts to appeal to digitally dependent consumers through apps, viral ad campaigns and a strong social media voice.

Nike has released a stream of buzzy marketing collateral such as its “Pro-hijab campaign” and using high profile Asian celebrities to promote products (Kiss My Airs). Consulting firm Accenture found that more Americans are streaming shows through Playstation Vue and Netflix, making cable TV almost obsolete.

Southeast Asia’s young population is young, over 70% are under 40 years of age and experiencing a surge in spending power – set to contribute 34% to consumption growth by 2030, compared with the global figure of 25%.

A maturing consumer demographic, combined with flexibility to spend means that Southeast Asia’s Gen Z are ones brands have the opportunity to target early, especially knowing the trends overseas.

Google “It’s Lit’ report can be found here.

We recently shared Google Consumer Barometer data that showed on average, stores and showrooms are still the most common places where 51% Southeast Asians discover new products.

39% of other consumers start their product journey online. Where exactly are they going to look for items online? Read more