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Since its launch in December last year, Facebook Live has presented everyone an opportunity to share a live moment in real time, and this feature has become an important addition to the world’s largest social network. As with other products, Facebook has been pushing people to use Facebook Live, either by inspiring to launch an out-of-home awareness campaign or more directly adding a live button on the app’s homepage. The social network also ranks live videos higher than other types of posts to encourage users to interact and ‘be in the moment’.

Facebook Live – Be in the moment

Despite all the effort, brands and publishers in Southeast Asia seem to take a wait-and-see approach as for now they don’t produce many live videos as can be seen on the Live video map. Lack of ideas and expertise in creating this new type of content which differs from traditional promotional videos are the main factors that have hampered adoption of Facebook Live in the region.

On the other hand, Southeast Asia’s Facebook merchants who use the social network to showcase and advertise their products are in the forefront. They’re taking advantage of live videos to engage with customers and sell products in new ways.

How to capture the shifting consumer attention?

As 50% of consumers feel increasingly overwhelmed by brand marketing messages on social media, consumer attention and engagement is scarce. According to Facebook, people spend three times more time watching a video when it is live compared to when it is not broadcasted in real time.

With this change in mind, brands should capitalize on campaigns in the format of a high quality live video. Here are three ways Facebook merchants in Thailand are capitalizing on Facebook Live:

1. Host an auction in real time

One prevalent example how the live video feature is being used is to host in real time an auction of new or second hand fashion products such as bags, dresses, or even items like electronics.

The way it works is similar to a typical auction, just when the auction is hosted on Facebook Live, the bids are submitted as comments. When the broadcast ends, the merchant and the winner arrange the details of the payment and delivery.

2.  Showcase products and answer questions in real time

A number of merchants also use Facebook Live to demonstrate their products. Customers in the comments section can ask questions about the price or details of the product for the seller to answer.

Similar to hosting a live auction, broadcast viewers who want to purchase products can send a Facebook message directly to the merchant to arrange payment and delivery.

3. Attract viewers with games, prizes, Q&A sessions

Hosting interactive games or quizzes and giving away prizes for sharing a Facebook Live video with friends is also a tactic used in Thailand to attract more viewers and followers.

The owner of cosmetics brand B’Secret Chonnipa Wisedsuranun is a live broadcaster who has successfully leveraged this strategy. One of her Facebook Live videos generated over a million views and almost as many comments.

She uses live video to engage with her customers and build a fanbase by asking viewers to share her live video during which her cosmetic brand is mentioned throughout. To incentivize customers to share the video she gives away prizes like iPhones, cash, gold, and more. This technique allows her to garner a huge amount of viewers and fans in a short period of time.

By doing so, she also creates awareness of her products without paying a dime to Facebook for advertising.

Chonnipa also often uses Q&A games where viewers who answer correctly in the comments section to a question she asks win a cash prize.

Facebook Live provides brands and retailers an alternative way to grow their followers, engage with a wider target audience, and drive sales without directly paying money to Facebook for ads. Businesses that still rely primarily on Facebook ads will eventually experience growing advertising costs due to the nature of auction-based advertising that makes bidding more expensive when there are more advertisers.

In contrary, businesses that can effectively leverage this interactive video format are likely to capture the  attention of consumers at a lower cost.

BY KORAVUT PAVITPOK, ACOMMERCE INTERNET MARKETING MANAGER

 

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Over the last few weeks, we have looked at the ecommerce landscapes in Indonesia, Thailand, Malaysia, Singapore and the Philippines to see how the five largest markets in the region are faring. The region itself is a diverse and fragmented landscape having disparate infrastructure and fickle government regulations, making it hard for global brands to find a one-size-fits-all solution to conquer $238 billion in market potential.

However, despite the diversity of each country, there is a common theme apparent for ecommerce in the region. Here’s what we have discovered from the Southeast Asian ecommerce landscape in 2016.

1. The domination of Lazada – or soon, Alibaba

One player that has succeeded in making a name for itself in every country across the region is Lazada Group. The company, introduced by Samwer Brother’s Rocket Internet in 2012, has dominated monthly web traffic by millions in almost every country. Their recent acquisition by Alibaba has only cemented their position of power and plays a key role in Jack Ma’s big plan for Southeast Asia.

The only market with local players that puts up a decent fight with the giant is Indonesia. The country has several big players in the B2B2C sector – MatahariMall and Blibli to name a few – backed by big enterprises or conglomerates. But deep pockets is not the only thing that gives these players an upper hand, local knowledge of the market is also a big advantage.

southeast asia ecommerce landscape

With the looming news of Amazon’s expansion into Southeast Asia with Singapore next year, Lazada doesn’t seem to be worried as they have the advantage of years of consumer data and its latest acquisition of Redmart is seen as the latest effort to thwart Amazon at its own game.

2. M&A as a strategy to survive

Ecommerce is a long term game. Even with a good business model, companies need to be able to sustain themselves for the marathon before they even have a chance to make profit, let alone reap the other additional benefits of going online.

This year, the region has seen a lot of acquisitions as players attempt to expand market share or make an entrance. This includes the old news of ‘Alizada’, a $1 billion acquisition that left players in the industry trembling with excitement or the acquisition of Caarly by Carousell to accommodate the growing interest of people looking for cars on the mobile platform.

Some of the acquisitions were done by non-ecommerce players hoping to expand their reach. There is the latest move by K-Fit, a subscription fitness startup, acquiring Groupon in Indonesia and Malaysia; and the exit of Zalora in Thailand and Vietnam to Thailand’s conglomerate, Central Group, earlier this year.

With hundreds of players clamoring for a chunk of market share, it’s only time before natural selection leaves only the strongest and most committed players in the arena.

3. Payments sector is saturated, but no true problem-solver

Payments is still one of the largest hurdles for ecommerce in the region despite the financing boom for Southeast Asian fintech startups in 2016. Numerous startups are attempting to create a payments product for the sake of ‘doing fintech’ but aren’t addressing fundamental payment issues like a high unbanked population.

All across the region we see players in every market trying to address local financial challenges with little success. In Thailand, the government’s effort to create a cashless society with PromptPay has been halted indefinitely when Government Saving Banks (GSB) ATMs fell victim to the cyber criminal.  

Coins.ph in the Philippines is using bitcoin to increase financial inclusion in the country but is still at a nascent stage. In Indonesia, Telcos and even ride-sharing apps are fueling the high-profile race of mobile wallets – no doubt inspired by Alipay’s and WeChat early days strategy in China – but not a single e-payment option has become widespread.

southeast asia ecommerce landscape

Bank transfers and cash-on-delivery (COD) still remain the top two most preferred payment methods and continues to cripple ecommerce.

4. The key to C2C is through mobile

Consumer-to-consumer is estimated to make up at least 30% of ecommerce market share in the region but is tricky to measure because it happens on social channels like Facebook and Instagram and payment typically happens offline.

In Thailand, around 50% of online shoppers make purchases through a social network – making it the biggest social commerce market in the world. Consequently, it has attracted Facebook to make the country its first test base for social commerce payments and Facebook Shop.

This habit of preferring social commerce pushes players to focus on mobile to be able to capture the customer in an already familiar environment. In Singapore, 38% of online shoppers are making purchases through mobile, higher than the global average of 28%, and inspires home-grown companies like Imsold, Shopee and Duriana to focus on mobile platforms to appeal to more customers.

singapore ecommerce landscape

C2C players are also seen dominating Google Play Store in the Shopping category for every market, with Shopee being the most favored in almost all the countries. In the Philippines, the platform has become the answer to the high demand for popular international brands that only recently available in the country through official offline channels

5. Delivering ecommerce packages gets easier

The rise of ecommerce in the region has also boosted logistics infrastructure. The sector has reached an all time high of funding at $28.16 million in 2015 – led by aCommerce, the tech-logistics ecommerce solutions provider, with $20.2 million before its bridge series of $10 million earlier this July.

Meanwhile, JNE, the largest logistics company in Indonesia, stated that 70-80% of its revenue came from the retail sector dominated by ecommerce and hopes to maintain its annual growth of 30-40%. German-based DHL is also reportedly raising the stakes to grab market share, including the opening of a hub in Singapore.

The on-demand delivery service, led by ride-hailing apps like Gojek and Grab, is also thriving in markets where traffic congestion is distressing like in Indonesia and Thailand. Their motorbike fleets allow them to achieve same day delivery.

Where in the Philippines, cross-border package forwarding services like ShippingCart and POBox.ph are targeting the unique high volume of cross-border transactions in the country to fuel their businesses.

The many facets of Southeast Asia’s ecommerce landscape

Despite the warnings about the region’s diversity, the core ecommerce bottlenecks in Southeast Asia boil down to one – poor infrastructure. Lazada’s strong footprint in the region did not happen overnight, its early-adopter status enabled collection of customer data and the ability to build its own infrastructure – logistics (LEX) and payments solution (Hellopay) – in almost every market. But it almost cost them its business before getting swept off its feet by Alibaba.

southeast asia ecommerce landscape

It comes to show that regional players need to be able to adapt their strategies by keeping tabs on the dynamic trends and consumer behaviors. They need to prepare for a long-term investment before hoping to make their mark in the region and if not – better stick to just one market.

Find the ECOMScape series here: Indonesia, Thailand, Malaysia, Singapore, and the Philippines.

Customer support plays an integral role in delivering an enjoyable online shopping experience. Your online store could be optimized with tips from beautyIQ series, but a poor customer experience will drive 89% of consumers to go to a competitor. The last article of the beautyIQ series will provide guidance on how to best support your Southeast Asian customers online and keep them loyal to your brand.

The importance of customer service seems obvious in traditional brick-and-mortar shops – your salesmen on the floor represent your brand’s image and values through interactions with customers. This is especially true in Thailand and China where shoppers rate customer service as one of the most important factors driving their favorite retailer perception.

For ecommerce, customer care is more integral to the experience as shoppers lack the touch and feel of a product and convenience of a friendly salesperson ready to address any questions. Customer support is also important to containing the damage of a negative review spreading on social media, where more than 50% of consumers in Southeast Asia turn to read product reviews.

Providing excellent customer support can be the make or break of a company as demonstrated by Zappos.com, an online shoes, clothing and accessories store owned by Amazon. Just this July, the company set a new internal record with a customer-service call that lasted 10 hours and 43 minutes. It is stories like these that keep Zappos in the online shopping spotlight and customers coming back.

To be as accessible as possible for online shoppers, brands and merchants should ensure the following:

1. Make Customer Service Contacts Visible

45% of respondents to PwC retail study say reviews, comments and feedback found on social media influence their shopping behavior. This means it is extremely important to quickly diffuse a frustrated customer as they are more likely to turn to social media and post a negative comment regarding your brand.

Mitigate this situation by making your phone number or other contacts highly visible to increase trust in your online store and give browsers a ‘shopping safety net’.

Bobbi Brown’s online store in Thailand lists a live chat button at the top of its webstore and uses large icons for email, chat and phone communication at the bottom of the page, leaving no questions where customers should turn for answers.

customer support

customer support

 

Clinique also lists customer service contacts at the top of its webstore under ‘Help’, which is easy to see and comprehend.

customer support

2. Support Customers on Channels They Use

As internet users spend from 1.6 hours in Singapore to 3.7 hours in Philippines on social media every day, consumers in Southeast Asia show a stronger desire to communicate with brands through social media than consumers elsewhere in the world.

Facebook is the most popular social media network and a quick look at local pages of popular beauty brands show that customers don’t hesitate to express their positive and negative experience online. Developing a capability to respond to customer reviews online will help brands improve their relationship with customers.

In Thailand, global beauty brands state on their local brand.com webstores (Bobbi Brown, Kiehl’s, Estee Lauder, MAC Cosmetics, Clinique, L’Occitane and Laura Mercier) that they mostly provide customer support either by phone on weekdays from 9 AM to 6 PM or email.

Bobbi Brown is the only brand that offers a live chat on weekdays, while Laura Mercier has official account in LINE, one of the most popular chat apps in Southeast Asia. All brands mentioned engage with customers and their inquiries on social media channels like Facebook and Instagram, but the response time varies.

3. Train Customer Service Agents to Listen, Reply and Execute

“I want it all, I want it all, I want it all, and I want it now,” sings rockband Queen, and it sums up quite well the expectations of customers nowadays. Every third customer who has attempted to contact a brand for customer support through social media expected a response within 30 minutes. Research shows that customers even value a quick response over a more informative one.

To track your customer inquiries, use software like Zendesk, as used by Lazada, one of the biggest marketplaces in the region. Keeping track of customer inquiries is important to calculate customer response time and ensure customers who have turned for support have actually received it.

Having knowledgeable customer service agents who are familiar with product properties, brand policies and other issues will speed up time taken to reply to customers and positively impact the chance of a returning shopper. ecommerceIQ sent inquiries to the above mentioned global beauty brands and they all responded within 24 hours.

Customer complaints may not be the most pleasant thing to handle, but it is the best feedback a business can receive as it highlights holes in its business model. Internal data from aCommerce, service provider for ecommerce fulfillment in Southeast Asia, shows that concern about expiry date of skincare or cosmetics products are among the most common complaints in Thailand. Shoppers may ask for a refund or return the product if, for example, two years have passed since the manufacturing date.

It is the responsibility of customer service agents to communicate these problems to the right departments and ensure the same issues do not arise again.

Customer care is the key factor impacting consumer trust – not surprisingly a good customer experience will bring shoppers back for more, while bad support will drive them away. With the widespread usage of social networks in Southeast Asia and across the world, word of mouth has never traveled faster. 47% of digital consumers in Southeast Asia inevitably go online to share their experience, which will impact decisions of other potential customers for buying online.

With this article beautyIQ series finishes. We hope you found the tips useful in creating an enjoyable online shopping experience for your customers. You can read all articles on ecommerceIQ.  

For more insights about ecommerce trends in Southeast Asia, visit the report section on  ecommerceIQ.

 

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ

 

We’d love to hear your feedback,

find us on Facebook, LinkedIn or Twitter.

 

Up until this point, we’ve covered driving traffic to your online store, where to best sell your products and the type of content that increases conversions. Now we will be sharing a few tricks to make it easy for store visitors to complete their purchase, something commonly overlooked. From the checkout process to receiving the package, in this article we discuss how to decrease cart abandon rates and last mile best practices.

55% of consumers surveyed by PwC in Southeast Asia report they are shopping online monthly or more frequently, and returning customers are one of the easiest ways to grow ecommerce business. Creating a stress-free checkout process and delivering pretty package on time are vital factors to gain customer loyalty.

Once the shopper is happy with their product selection and ready to checkout, ensure the final steps in their online journey, the last mile, are hassle free. Businesses can do this by:

  • Providing easy checkout process and being transparent about any extra costs
  • Offering a ‘cash on delivery’ payment method
  • Creating the best image of your brand with smooth delivery of the product

 

Optimize your store’s checkout process

Abandoned shopping carts are the worst nightmare of online sellers as they present lost revenue. And it’s usually because every fourth customer is frustrated when there is too much information to fill upon checking out.

An overly complicated checkout form can scare off over 60% of potential buyers therefore the shorter the checkout form and the less clicks your customer has to make, the more likely that she or he will finish the purchase.

For example, Estée Lauder’s checkout form of its Thailand webstore is rather long. It requires, first, user registration and, second, to fill in a separate line each item of the address, eg. house number, alley, road, district, county, instead of using a text field for the user to enter everything at one go. This probably makes it easier for the brand to process data in the backend, but doesn’t make for a great user experience.

last mile delivery

last mile delivery

Checkout form of the Estée Lauder online store in Thailand is quite lengthy.

To checkout from Kiehl’s Indonesia webstore customer first has the pleasant task to choose free samples. But after that she or he is directed to sign in or register an account, then has to look again for the shopping cart and gets to fill the checkout form only after a few more clicks.

In both cases, customer at some point may feel impatient or confused and such experience may reduce conversion rates.

To best capture your shopper’s purchase, offer a guest checkout option and create a simple, one-page checkout form asking the buyer to fill only the necessary information – name, address, phone number and payment details. Do you really need to know your customer’s birthday adding one more line to fill during the checkout?

Be sure to offer various payment options based on the preferences of your target audience and show that you are serious about the security of the payment displaying secure payment gateway branding such as SSL (Secure Sockets Layer) certificates.

With a total of 5 clicks from landing to checkout to submitting your order, Maybelline Thailand is a good example of how to simplify the checkout process. While it requires a registration, it is very simple and quick, and the checkout form is just one-page.

last mile delivery

Maybelline Thailand store has created simple one-page checkout.

To avoid abandoned carts, brands should be transparent about the costs that the buyer might incur in addition to the product price. Around every fourth customer drops the purchase because of unexpected shipping costs and 45% of customers tend to add products to their cart without intent to buy in order to check the final price.

Show all the additional costs that the customer might have to pay or highlight free shipping with minimum purchase value – around 24% are more likely to spend more to be eligible for free delivery.

Prioritize cash on delivery as payment method

In Southeast Asia, cash is the preferred payment method for the majority of customers – in Thailand 83% of them would prefer to pay with cash on delivery, in Malaysia – 82%, in Singapore – 72%. Less than 10% of the population in Thailand, Indonesia and Vietnam and less than 20% in Philippines and Malaysia use banking cards to pay for their purchases.

Offering cash as a payment method will increase the number of customers who want to purchase goods online as the conversion rate on cash on delivery is higher than bank transfer and bank service combined. This is due to low credit card penetration rates and high mistrust issues with entering payment information online across the Southeast Asian markets.

In Thailand, other payment methods which customers without bank accounts can use include payments over the counter in convenience stores 7-Eleven and other shops or cash deposit in a bank or ATM. However, by offering these payment methods, a merchant pushes the customer to decide twice on buying the product – first time on the webstore and second time when the person has to go to either the counter or the bank to actually make the payment. Thus, giving customers another opportunity to reconsider and cancel the purchase.

Make the delivery of the product stress-free

Delivery times, customer service, the aesthetic appeal of the packaging and even the etiquette of the messenger is a business’s final chance to leave its consumers satisfied. Yet, some brands fail to align their global image with the “last mile” delivery.

When a customer makes a purchase, she or he, of course, is interested in the particular product and will presumably make a purchase if your site is optimized but that doesn’t mean the box in which the product is sent should be neglected. The goal is to make the shopper feel like their online purchase was worth it.

In a recent study, Dotcom Distribution found that 40% of consumers are likely to make repeat purchases from an online merchant that delivers products in gift-like or premium packaging. If the delivery came in a unique package, consumers are also more likely to share it via social media. Instant free marketing!

Here are a few things to consider for special packaging:

  • Use a branded box, not just the standard brown box from the logistics provider
  • Use branded or coloured tissue paper, not hard paper to wrap product
  • Consider branded or coloured tape instead of clear tape
  • Include small gift samples to increase cross-selling
  • Protect the branded box by putting it in a standard brown box

It is extremely vital to premium brands like Bobbi Brown, Kiehl’s, Estée Lauder and MAC to provide proper packaging to protect their brand image and justify higher product costs. In Thailand, they are trailblazers as to how their products are represented when delivered.

last mile delivery

last mile delivery

Premium brands Bobbi Brown, Kiehl’s and MAC have invested in a gift-like packaging. Source: ecommerceIQ

Yet, the arrival of French brand’s L’Occitane package provided somewhat disappointment.

last mile delivery

Franch brand L’Occitane delivers products bought on its online store in standard packaging.

There comes a high cost to providing this special packaging in the right size. As it can be seen in the table below, just having a brand’s logo on the box and using a branded tissue paper can increase the packaging costs 3 to 5 times, while having the full premium branded packaging means even bigger expense.

last mile delivery

“If you have an average basket size of over 1000 THB, it makes sense to have a branded box. Even if not the case, brands should see the packaging as an extension of its marketing and pick a style that aligns with the brand’s global image, as it is the customer’s final touchpoint,” says  Phensiri Sathianvongnusar, aCommerce Thailand COO.

Take into account that shipping costs are calculated by volume metrics, not by weight. This is why it’s important to have a couple box options that are efficient for the physical average basket size of your product.

When you’ve invested your time and resources to get potential customers to visit your online store, don’t sabotage your efforts by complicating the checkout process and ignoring careless fulfillment. Provide an enjoyable purchase process experience, surprise them in a positive way with gift-like packaging, and you will win their hearts.

Southeast Asia’s ecommerce boom in the recent years has fostered the establishment of fulfillment companies who can advise your brand on the best practices. See who they are for Thailand and Indonesia.

Stay tuned for next week’s beautyIQ piece in the series!

BY AIJA KRUTAINE AND ANUTRA CHATIKAVANIJ



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Thailand Ecommerce Landscape

Thailand, while not the most populous nor richest of the Southeast Asian nations, is currently the fourth largest ecommerce market in the region, valued at $900 million and is expected to increase its ecommerce business 12-fold to a value of $11.1 billion by 2025.

What does the attractive Thai ecommerce market looks like now and what can be expected in the coming years? ecommerceIQ shares ECOMScape: Thailand to provide a quick snapshot.

1. Lazada is the dominating marketplace, while others compete in niches

What differentiates Thailand from other markets in Southeast Asia is that one online marketplace – Lazada – has significantly advanced over its local ecommerce rivals. The traffic of Lazada’s two closest competitors WeLoveShopping.com and Wemall.com combined makes only around a quarter of Lazada’s monthly traffic.

Yet, that and the fact Lazada now has the support of Chinese ecommerce giant Alibaba, is not scaring off competitors. Korean ecommerce marketplace 11street is expected to launch in Thailand in time for campaign season, 11/11, in hopes to replicate its success in Indonesia and Malaysia. The group’s claimed annual gross merchandise value of $7 billion is 7 times bigger than that of Lazada Group, but will it manage to challenge Lazada in Thailand?

Deep pocketed conglomerates are also moving in to steal market share, such as Thai CP Group, which belongs to the richest family in Thailand – brothers Chearavanont, owns Tesco Lotus, Shopat24 and 24Catalog. The second richest man in the country, Charoen Sirivadhanabhakdi, this year bought BigC and Cmart (formerly Cdiscount). While Central Group, the operator of Central department stores and distributor of several tens of foreign brands in Thailand behind which stands the third richest – Chirathivat – family, owns online marketplaces Central.co.th, Robinson and Tops. All of the above mentioned retailers have both – offline and online stores.

Thailand Ecommerce Landscape

Despite Lazada’s dominance, competitors are not easily scared off, especially deep pocketed Thai conglomerates who want their share of etailer online market.

Fashion & Apparel is one of the most competitive online market segments. In Thailand, this category represents a healthy mix of local players like Pomelo and WearYouWant, regional players like Zalora, Reebonz and global brands such as Adidas and Uniqlo.

Thailand Ecommerce Landscape

The competitive Fashion & Apparel online market in Thailand represents a healthy mix of local, regional and global players.

Brand.com webstores are also gaining traction in Thailand, which is best observed in the beauty category. Brands such as Maybelline, L’OccitaneEstée Lauder and Kiehl’s in Southeast Asia embrace the ecommerce market boom and use the opportunity to sell on their brand web stores, marketplaces or through distributors to capture the widest possible audience.

Thailand Ecommerce Landscape

Beauty brands go all-in in Thailand selling their products online on their own webstores, marketplaces or through distributors.

2. Old school vs new kids on the block compete in C2C

Classifieds and consumer-to-consumer (C2C) marketplaces were the first ‘ecommerce’ businesses to operate and remain an important part of the online journey in Thailand. Three of the most popular C2C marketplaces – WeLoveShopping, Tarad, Pramool – were created around the millennium and are run by local companies. However, newer market entrants like Shopee, supported by Southeast Asia’s largest gaming company Garena, are on their heels.

Tarad and Pramool ecommerce sites can be accessed on desktops, while the newest competitors – Shopee, Blisby, as well as WeloveShopping – all have mobile apps, which rank among the top 10 most popular C2C ecommerce apps in Thailand. Since approximately 85% of online shopping outside the major metro areas in Thailand takes place through mobile, it is easy to see that the new kids on the block are disrupting traditional, desktop-first marketplaces.

3. Social commerce is driven by Facebook, Instagram and LINE

An ecommerce business model specific to Thailand is social commerce – merchants set up ‘shops’ on Facebook and Instagram where they post images and details of their products so online browsers can inquire about the product and other details to further facilitate the deal.

Thailand Ecommerce Landscape

Thailand is the leading country where half of online shoppers buy directly from merchants through social networks.

According to a PwC report, Thailand is the biggest social commerce market and around 50% of online shoppers purchase products through social networks. Therefore it was no surprise when this June, Facebook started testing social commerce payments in Thailand and later in August launched Facebook Shop, the first in the world.

Companies like Shopee are looking to lure merchants selling on social networks to its online marketplace with aggressive marketing by offering easy integration of their Instagram shops and reimbursing shipping, cash on delivery fees to sellers. Other players like LINE also have eyed this market segment. LINE Shop was created to utilize the wide audience of LINE messaging app and tap the social commerce market. Yet technical issues such as a requirement to upload merchant product catalogues on the app through mobile phones, as well as limited payment options through LINE Pay, has hindered the success of LINE Shop.

4. Cash is still king

Thailand is still a cash driven society and cash on delivery (COD) is the preferred payment method for 70% of ecommerce shoppers, making payments a bottleneck for faster ecommerce growth as many sellers cannot offer COD. There are various mobile wallets offered by telecom companies, banks as well as independent players but so far, none of them have quite caught on.

Thailand Ecommerce Landscape

Despite various mobile wallet providers, cash is still the most preferred payment method.

The large unbanked population and low trust in the security of personal financial details does not make the task of Thais adopting digital payments any easier. And though there has been a surge in fintech players, none really address the core issue. For example, LINE Pay accounts can only be linked with a credit card in Thailand, where just  3.7% use one to make payments. Mobile wallets and banks offering a top-up through either ATMs or special kiosks, defeats the purpose of an mwallet. Good news is that there is an opportunity for a player to provide a convenient and easy digital payment solution for those without a bank account and/or credit and debit cards.

5. Fierce competition in logistics leads to price war

The ecommerce gold rush across all Southeast Asia has facilitated growth of startups who hope to solve logistics problems like next-day delivery and live tracking, and Thailand is no exception. The success of ride-hailing apps Uber and Grab has encouraged several startups to offer on-demand delivery services.

Thailand Ecommerce Landscape

The success of ride-hailing apps has driven several start-ups to offer on-demand delivery.

There are numerous companies who provide 3PL services and ensure a smooth last mile delivery. This means companies engage in price wars and suffer lower margins, if any at all.  

The packed logistics market is beneficial for marketplaces and merchants as they have plenty of delivery service providers with whom to negotiate a lower price.

Thailand Ecommerce Landscape

Numerous companies offer 3PL services and ensure last mile delivery driving down delivery costs for the benefit of marketplaces.

Click here to download the full, high-resolution version of ECOMScape: Thailand and join the ecommerceIQ network for first look at the next ECOMScape in our series.

Check out also ECOMScape: Indonesia

Are we missing any players? Let us know on FacebookTwitterLinkedIn

Betagro marketing

The rise of technology and the internet isn’t just disrupting traditional retailers; it’s also enabling brands to reach their customers directly without the need of a ‘middleman’. Dollar Shave Club effectively sold to their loyal subscribers without ad agencies, traditional media or offline distributors like Walmart and Walgreens.

With the Death of The Advertising Industrial Complex looming upon us, traditional, mass advertising such as outdoor, print, TV and distribution through offline brick and mortar retail are rendered inefficient. Companies like Unilever have no choice but to acquire ‘the little guys’ like Dollar Shave Club to stay relevant.

It doesn’t end here. Fresh off their $1 billion acquisition of DSC, Unilever is already in talks to buy Jessica Alba’s Honest Co. for another $1 billion.

The Advantages of Moving Towards Direct-To-Consumer

In many of his speeches, Alibaba’s founder and chairman Jack Ma talks about how the world is moving from Information Technology (IT) to Data Technology (DT). In a DT world, businesses have direct relationships with consumers, enabling the former to collect data to build and market products and services personalized to the latter.

One classic example is Xiaomi, the Chinese electronics company and 4th largest smartphone maker, who sells attractively priced smartphones on its website to drive the direct relationship with its users. The company then uses the data to push peripheral products, plush toys, software, and online and mobile advertising.

Amazon is the other example, selling other people’s products at lower margins to get the volume it needs to monetize through marketplace fees and Prime subscriptions:

Amazon, meanwhile, is transitioning to a new model completely. The vast majority of Amazon’s products are increasingly sold with little to no margin at all: profitability comes from fees paid by third-party merchants and Prime subscriptions. It is a model that is completely dependent on scale, and the lower the margin and thus prices, the higher Amazon’s volume, which means ever more leverage from Amazon’s massive fixed costs in infrastructure and logistics.” – Ben Thompson, Stratechery

This transition from IT to DT is exactly what Unilever is trying to achieve through its acquisitions of Dollar Shave Club and Honest Co. Both firms enjoy better margins through online marketing and distribution. More importantly, they own the direct customer relationship, which they leverage into higher customer lifetime values through innovative models like subscription commerce.

Direct-to-Consumer Accelerated in China and Southeast Asia

China and Southeast Asia are growth markets unburdened by a legacy offline retail infrastructure meaning brands are jumping over the middleman at a much faster pace than in mature markets like the US, Europe or Japan.

Why did internet ecommerce grow so much faster in China than in the US? Because the infrastructure of commerce in China was bad. Unlike here, where you have all the (physical) shops: Walmart, K-Mart, everything, everywhere. But in China, we have nothing, nowhere. So ecommerce in the US is just a dessert; it’s complementary to the main business. But in China, it’s the main course.”Jack Ma, Founder and Chairman, Alibaba

An example of traditional, non-conventional brands going direct to consumer is Yurun Group, China’s second-largest meat supplier in China. Based in Nanjing, Jiangsu province, Yurun operates in two sectors, chilled and frozen meat, and processed meat products, which are marketed under the brand names of Yurun, Furun, Wangrun, and Popular Meat Packing.

Yurun operates an official Tmall flagship store through which the company sells its various brands and products and also distributes digital vouchers.

Betagro marketingBetagro marketing

Betagro marketing

Capturing the Direct-to-Consumer Opportunity Through Digital Transformation

Fashion, electronics, and consumer packaged goods (CPG) aren’t the only categories that are increasingly being sold online. Let’s take a look at Betagro, a 50-year old Thai food manufacturing conglomerate, and identify the opportunities available for the company to go direct-to-consumer and transform itself to capitalize on today’s digitally-savvy consumer.

Who is Betagro?

Betagro Group was founded in 1967 by Dr. Chaivat Taepaisitphongse, the company’s current chairman. Headquartered in Bangkok, Betagro engages in animal feed production, livestock, animal health products, and food product businesses. The company is known for its brands like S-Pure eggs, Better Food, and Dog’n Joy pet food.

Betagro Value Chain & Gap Analysis

Below is a simplified overview of Betagro’s value chain. We specifically looked at Marketing and Sales & Distribution, two areas that are typically impacted by internet, ecommerce and technology.

Betagro mainly sells through retail partners like Tops, Tesco Lotus, Big C, and Family Mart and its own distribution channels, namely Betagro Shops, with a footprint of over 100 in Thailand. Unlike its main competitor Charoen Pokphand Foods PCL, who has access to massive distribution through its 8,000+ 7-Eleven branches in Thailand – Betagro still has to rely on partners.

From a marketing perspective, like many other traditional business in Thailand, Betagro still uses offline channels such as event marketing through roadshows, mall booths, etc. and sampling in supermarkets. Its online efforts are limited to its corporate website Betagro.com, which is lackluster, and content marketing on its “Betagro Society” YouTube and Facebook pages.

Betagro marketingMaximizing Marketing Opportunities

To maximize the company’s online efforts, there exists many opportunities across the user journey for specifically Content Marketing and Influencer and Affiliate Marketing that we highlight here. 

betagro marketing

Content Marketing: Videos

Given the very nature of its business, content marketing is a great way to educate, activate and engage customers for Betagro. Similar to how Dollar Shave Club leveraged its now cult-like “Our Blades Are F**king Great” viral video to spur its initial hyper growth, Betagro can create cooking videos and online recipes to engage their audience and build brand identity.

Betagro’s official music video on YouTube garnered over 5 million views in less than one year’s time. Although impressive, it pales in comparison to short-form cooking videos on Facebook like those by Tasty, some racking up over 30 million views in less than 12 hours.

Betagro marketing

Betagro marketing

Facebook’s powerful short-form, auto-play videos are now being applied by food business in Thailand such as Unilever’s Best Foods.

Content Marketing: Recipes

Best Food’s US website is another great example of using online recipes for SEO and engagement. While Betagro’s website mainly covers corporate information, Unilever’s BestFoods.com offers many recipes that allow the brand to display their products in attractive high-res imagery – selling without direct selling.

Betagro marketing

Having recipes online not only helps with engagement but also with SEO, resulting in an increase in organic traffic from Google. A quick look at Similar Web data for BestFoods.com shows top keywords are all recipe-related ones.

Betagro marketing

Influencer & Affiliate Marketing

Facebook paid advertising is one way to distribute content for Betagro. Another – and sometimes more efficient way – is to leverage influencers or “Key Opinion Leaders” (KOLs). In Thailand, due to a “no-tail” environment, a lot of these KOLs are on Facebook instead of having their own blogs or websites. Below is a list of popular cooking and food related KOLs.

Betagro marketing

Betagro could partner with these KOLs to educate and increase brand awareness through text and video content directed at an audience with interest in their products. In the Mai Yom Auon example above, the page owner cooks using a pan provided by the advertiser Korea King.

Another way to leverage these KOLs is by adding them to an affiliate program where the aim is to drive traffic to a future Betagro ecommerce website – either in the form of a brand.com or shop-in-shop on a marketplace.

Betagro marketing

Betagro marketing

Betagro marketing

Influencers can post a ‘shop’ on their official Facebook page to showcase the brand’s products to their fans.

 

Monetization: Ecommerce

The amount of distributors for Betagro products are limited leaving the company to the mercy of its retail partners such as Tesco Lotus and Family Mart. But by offering its products online, Betagro is able to increase its leverage vis-à-vis these partners as well as collect data from the end consumer.

Similar brands have already started doing so such as Yurun Group in China on Tmall and Globo Foods in Thailand on Lazada.

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Monetization: Online-to-Offline

Betagro can also leverage digital channels to drive offline sales. For example, Honestbee and HappyFresh are food delivery apps that are being used by major food retail distributors across Southeast Asia.

By partnering with these companies, Betagro can help drive foot traffic to offline Betagro Shops as well as promote and advertise Betagro brands and products.

betagro-happyfresh

By implementing the marketing strategies mentioned above, Betagro will be able to expand their audience, increase sales and jump ahead of competitors. The best part?  without largely denting their budget.

Written by Sheji Ho, aCommerce Group CMO

Betagro Case Study: Direct-to-Consumer Opportunity Through Digital Transformation Full Download