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All aspects of ecommerce can be controlled by a brand, except for one area that is completely in the hands of the user – product reviews and ratings.

As competition grows on marketplace, where most online customers start their purchasing journey, this aspect has become a reliable filter to help other users decide, “to buy or not to buy.”

On most ecommerce sites, customers can sort products from highest to lowest average ratings, which means a high score gives brands more visibility and a competitive advantage over competitors. Better product rating, better purchase rate, makes sense right?

But five stars alone isn’t enough to convince customers to add to cart, it’s what the reviews are saying that drive checkouts, especially in Asia where an average of 22% customers — the highest globally — count online reviews as a decision making factor due to the strong effect of community.

By aggregating the major consensus of what customers are saying in their reviews, brands can leverage reviews to improve their performance online. How can this be done?

customers review Unilever

Data-analytics platform BrandIQ has collected reviews for four of Unilever’s brands – Dove, Rexona, Simple, Toni and Guy – on Lazada Philippines to showcase what companies can learn from this set of data and separating out the generic complaints (i.e. slow delivery, average product).

The average rating of each brand online gives a high level glance at which brand needs more monitoring and brand building. For example, Toni and Guy scores an average 3.81/5, which isn’t necessarily bad, but can be improved to rank higher in search.

42% of total reviews scrubbed were about the touch and feel of the products, but approximately 58% actually shed light on aspects other than product quality.

What were they saying?

To sort the data, reviews are split into five main categories: Product, General, Delivery, Packaging, and Customer Service.

customers review Unilever

From the data above, the keyword “delivery” is the second most quoted in reviews, but it doesn’t reveal whether sentiment is good or bad.

By splitting customer reviews into two sentiments: positive and negative, we identify the strengths and weaknesses of these categories. This allows companies to understand which area should be prioritised for improvement.

For Unilever brands on Lazada Philippines, despite the small numbers of reviews that talk about Package, the category racked up a strong positive sentiment compared to the other four categories (Service contributes only a small percentage of the total reviews). Extrapolation of this data can signal that the products ordered by customers is well taken care of during the last mile with the packaging the company used.

customers review Unilever

customers review Unilever

Review left by a Dove customer on Lazada PH that was found helpful by at least six other customers.

Customer reviews are a unique and vital aspect to ecommerce that offline retail rarely had to face before. Brands looking to crack the code on e-marketplaces will need to build an understanding for this new metric, and use it as a tool to their advantage.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’S TOP MARKETPLACES?

It’s hard to escape news of changing consumer behavior and ongoing retail ‘disruption’, especially amid the year’s largest sales. An evident signal of this shift has been the steady decline in foot traffic to once widely /lopular Black Friday sales in shopping malls.

Net sales on Black Friday slid 10.4 percent for brick-and-mortar chains, according to RetailNext.

For digital-first businesses, launching online is a no-brainer. But what happens when you are an existing brand that is over 80 years old working with hundreds of distributors around the world? Speed and simple decision making are out of reach.

At the Shangri-La at the Fort Manila, four brands – Abbott, Unilever, Payless, and Titan22 – each leaders in their own categories, were brought together by ecommerce enabler and e-distributor aCommerce to candidly share customer preferences, impact of traffic congestion and what must change internally in order to stay relevant in the future.

This is what was discussed:

1. More Filipino men pushing the carts

“There’s a lot more male shoppers going for groceries, it used to be the woman that was in charge of nutrition labels, but now they tell men to do it,” says Christian Domingo with a laugh. He is the Head of Ecommerce for Abbott Philippines.

Findings from a recent Nielsen study show that 40% of today’s grocery shoppers in the Philippines are men, an increase of six percentage points from last year. The driving factor? Affluent Metro Manila residents, especially in dual-income households.

Nielsen

Grocery shopping behavior for men and women in the Philippines. For more charts & graphs, visit here.

What this means for brands is to rethink marketing strategies traditionally targeted towards women.

Referencing another study, Christian attributed the popularity of ecommerce to worsening traffic conditions in the Philippines. CEO and owner of Titan22, the top sneaker retailer in the country, Dennis Tan, also shared his experience.

“The customer decision window is getting shorter and shorter. It used to take days where people thought about purchases and then come back to it but now the entire process seems to happen with minutes.”

He should know as Titan sold 400 pairs of Jordan Elevens during Single’s Day (11.11) in the first hour online.

“I won’t drive for hours for a chance to get the right shoe size. Consumers have a lot of options where to buy products, so we need to offer a competitive advantage.”

2. After-sales is as important as the purchase journey

Ecommerce is commonly misinterpreted as the shopping experience on a website but what gets forgotten is the attention given to the steps that come after checkout.

“How a customer feels after the purchasing experience is a big factor to the entire happiness experience to retail. This is one of the big pieces,” comments Dennis.

“We need to give them inspiration, not only about the shoe, it’s about happiness guaranteed,” agrees Thea Lizardo, Head of Ecommerce for Payless Philippines (Footwear Specialty Retailers Inc.).

3. Internal processes causing friction, there needs to be unified commerce

aCommerce, ecommerceIQ

Christian Domingo and Thea Lizardo from Abbott and Payless, respectively.

“It’s not typically mentioned but an important factor to talk about is the hurdle of internal friction in terms of technology. There’s a lot of confusion around how we attribute sales,” mentions Thea. “ These discussions are vital to transforming the entire business.”

“How do we remain competitive? How do we keep customers? It’s overwhelming for brands and business owners to adapt to all the changes because it’s so quick but at the end of the day, it’s understanding your numbers, your customers, your behavior and leveraging it.”

“Internally, there is no P&L, who is going to own the digital marketing unit? The marketplace?” comments Christian.

“It’s recommended [at Payless] to have a separate P&L, separate ERP for our ecommerce business as we didn’t want to disrupt the other 76 stores,” replies Thea.

Another internal roadblock Christian hopes to push through is the company’s (lack of) unified shift to ecommerce.

“We are selling milk online but other product divisions such as diabetic drugs need the push. They have hurdles like FDA approval, internal conflict, etc. but what we envision for 2018 is to go beyond the brand because it’s the user looking for a solution to a problem.”

“We [Unilever] have a long heritage selling fast moving consumer goods but we need to move things faster,” closes Kay Veloso, Head of Ecommerce for Unilever Philippines.

“It’s [unified commerce] not an unachievable dream, it’s a basic expectation. B2C, B2B – we serve the entire ecosystem to get the pulse of people we serve, and continue to adapt our brands to ensure their day to day needs are met through ecommerce.”

aCommerce, ecommerceIQ

Kay Veloso at the aCommerce Philippines Partner Media Workshop

4. Data and mobile will pave the retail future

Each brand has their own ideas about the main focuses for 2018. Unilever Philippines hopes to e evaluate its mobile experience to understand if it’s delivering the brand message across the board.

“Omnichannel is the big trend that is here to stay in the Philippines. We need to provide consistent online and offline experiences and preserve the quality of our products both instore and online,” comments Kay. “80% is coming from mobile websites and the Philippines is actually the fastest growing mobile market in Southeast Asia.”

Payless Philippines wants to leverage its data to better utilize its offline stores to become more customer oriented and explore new channels.

“How can we leverage the 76 Payless stores and unify them to serve our customers better? We have online data, consumer data so we can map out our merchandising plan for various locations.”

“Social commerce, exploring the space that we’re not in [social media] but also stores (they can be turned into fulfillment centers). Customers are becoming brand agnostic. We need to capture them when they are on their devices, not only at the mall, people no longer go online, they live online.”

Titan, on the other hand, will focus on expansion through ecommerce to meet the demand growing outside of Metro Manila.

“The challenge for Titan is all our physical stores are in Metro Manila while 50% of consumer base is outside Metro – we will continue to build on it and see what role innovation really plays for us.

“At the moment, ecommerce is more defense than offense, but when you start playing offense is when you start to win.” — Dennis Tan, CEO and owner of Titan22

“It used to be that companies had to set up a website because everyone was doing it but the companies that have their own internal ecommerce teams are the ones that are most successful, you need to be ones to drive and grow it in the organisation.”

Dennis Tan from Titan22


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For more charts & graphs, check out our database.

Despite its reputation as the next biggest ecommerce market after China and India, Indonesia’s playground has caused many players drop out.

Alfacart, an e-marketplace offering products from various categories, is the latest name in retail that has shifted strategy in order to remain in the game.

After more than a year operating as a horizontal marketplace, Alfacart has reverted back into an ecommerce channel selling products solely from its parent company, Alfamart – Indonesia’s second biggest convenience store chain.

The pivot has not only caused the downsized in the team and C-level management to resign but as well, all third party sellers.

What happened?

Alfacart’s beginning

Alfacart was first introduced to the country as AlfaOnline and built in 2013 when Alfamart realised the importance of having an online channel to expand its reach. The platform at that time focused on selling groceries and various daily necessities.

After three years and a lack of significant growth, the company decided to open its platform to third party vendors and increase their product categories to include items under Fashion, Gadget, and Lifestyle.

“Our digital presence needed to be transformed into full-fledged ecommerce to be able to win the market and contribute significantly to the group’s revenue,” said CEO Catherine Sutjahjo at the time of the transformation.

This pivot came along with a new name, and Alfacart was born.

Alfacart pivot

Alfacart portal before the pivot

To distinguish themselves from the other many horizontal marketplaces – Lazada ID, elevenia, Mataharimall, blibli, etc. – they introduced O2O (online-to-offline) by leveraging Alfamart’s offline network of over 7,000 stores nationwide.

Customers ideally could pickup and return their order at any Alfamart counter, which also widened their payments options to cash.

However, despite its efforts, Alfacart struggled to compete with the already established marketplaces. A quick look at web traffic ranks in Indonesia show that Alfacart hasn’t managed to come in the top five.

Alfacart pivot

Alfacart (purple line) traffic is seen declining in the last three months

Say yes to the horizontal marketplace?

Alfacart is not a lone case in Indonesia’s saturating retail space. Only a month earlier, Cipika, a  marketplace backed by Indosat Ooredoo – one of the largest telco providers in Indonesia – announced that it was shutting down its business.

Similarly to Alfacart, Cipika also evolved into a multi-category marketplace model by offering snacks and electronics in an attempt to reach more potential customers but called it quits after almost 3 years.

Alfacart pivot

Cipika’s shut down announcement on their website

The company’s reason for closing down?

“B2C ecommerce will take a long time to reach profitability,” admitted Prashant Gokarn, Chief Strategy and Digital Services Officer at Indosat Ooredoo.

Say no to the marketplace.

The landscape for B2C ecommerce in Indonesia is indeed crowded and becoming more so as big corporations and conglomerates scramble to back new ventures by pumping in millions of dollars.

Alfacart pivot

Indonesia’s crowded B2C space

The problem though is a lack of any distinguishing factors between these marketplaces as they all offer similar product categories, operate on the same models, and target the same people.

With the same people vying for the same slice of pie, one way to win the consumer is by offering heavy discounts — a strategy that hasn’t changed since the birth of ecommerce in the country 4-5 years ago and still yields the same little return. Another way would be to diversify.

Blibli is a good example of a B2C site offering new categories such as local Indonesian goods and travel through the acquisition of Tiket.com.

What’s important to note is that the playing field is about to get even more rough as notable C2C players like Bukalapak, Tokopedia and Shopee have also branched out to B2C by onboarding big brands like Unilever to their platforms.

Who will be standing at the end of the year?

Alfacart pivot

Alfacart’s C-levels: CCO Ernest Tjahjana, CEO Catherine Hindra Sutjahyo, CMO Haryo Suryo Saputro with Alfamart’s IT Director, Bambang Djojo (in red)

There’s no escaping Amazon. The online retail giant is everywhere, making headlines every week to announce either a Whole Foods takeover, a Prime Wardrobe program or a discount Prime membership for those in welfare.

All in a month’s work for Amazon.

The e-tailer is responsible for 43% of online sales in the US, and 11% of total retail sales in the country – it’s no wonder brands are wondering whether they should be joining Amazon’s army or facing ecommerce head on.

One brand that has jumped ship is the mighty Nike, who recently confirmed its partnership with Amazon through a pilot program to ‘test the waters’. However, an ex-Amazon employee expressed that this may not be the best move for the shoe brand.

Quote: Elaine Kwon, founder of Kwontified

“Most brands don’t think about it this way, but when you are directly wholesale, you forfeit any and all pricing control, and it becomes problematic because of the way Amazon matches prices — not just across the site, but from across the web,” says Elaine Kwon, former Amazon employee.

However, it’s important to note that Kwon is referring to a series of luxury, designer brands such as Gucci and Versace, fashion houses that spent years building their brands, but were affected by Amazon’s price markdowns.   

According to Kwon, Amazon’s wholesale arm actually leaves many companies bleeding because of its pricing strategy. Scott Galloway, founder of business intelligence firm L2 has called Amazon an “evil empire”. This is partly due to the fashion industry’s perception of Amazon, it’s like a dirty little secret in the fashion industry, high end brands do sell on Amazon, but only small selections, as they don’t want to be seen as selling out on a platform that promotes cutting prices.

So why would Nike still want to work with Amazon?

For one, the brand will be exposed to Amazon’s 80 million US Prime members, potentially rolled into the Prime Wardrobe offering (adidas is) and be able to maintain a level of control over the gray market for sneakers on the online marketplace.

But truthfully, brand.com sites are struggling to combat Amazon’s web traffic.

It’s a gamble either way and a decision that many companies face as e-tailing rises in popularity, even in developing markets like Southeast Asia aren’t exempt.

Marketplace strategy in Southeast Asia

Lazada, one of the region’s most popular marketplaces, is undoubtedly similar to Amazon. The site in Thailand clocks in around 40 million visits per month and has $2 billion in backing from China’s own ecommerce behemoth, Alibaba.

With Lazada moving closer towards a Tmall model, in which brands can design their own store on the marketplace and optimize the various features that Lazada provides, the marketplace is becoming even more attractive for brands.

Lazada Thailand-Unilever shop-in-shop

Despite the marketplace partner perks, brands should care about fully owning their online presence, and that means consumer data, design and marketing initiatives. A marketplace presence can be viewed as a short term strategy, something like a testing ground or accompanying channel alongside launching a direct-to-consumer website.

Granted, this is the ideal case for global brands with deep pockets.

US eyewear startup Warby Parker’s direct to consumer model, selling directly to your shoppers has long-tail benefits.

So who wins? Sometimes the brand but one thing’s for sure, the marketplace always wins.

Beauty is undeniably a big industry but within the sector, the hundreds of well-loved brands are owned by only seven global conglomerates. These household names range from Unilever, L’Oréal to Estée Lauder.

The 182 beauty companies contribute heavily to a beauty market worth $63 billion in the US alone and responsible for shaping consumer ideas about modern day beauty. The US and China alone will account for 54% of the premium beauty segment by 2021.

The chart, illustrated by Business Insider, shows how interconnected beauty brands really are and which houses are most prominent. Below are a few that stand out:

L’Oréal’s footprint

L’Oréal had the most brands on this list – a total of 39 beauty brands ranging from Maybelline to Kiehl’s.

It was estimated that L’Oréal made $27.6 billion in annual beauty sales in 2016. What factors attribute to its success? The company’s ecommerce sales rose by 33% year on year in 2016 and 30% of its media spend was on digital.

For the company, ecommerce isn’t only a peripheral revenue stream, but the new growth engine.

La Roche Posay, a skincare brand under L’Oréal, also has a marketplace presence in Thailand through a flagship shop-in-shop on Lazada.

La Roche Posay flagship store, Thailand

Beyond Thailand, Johnson & Johnson in the Philippines recently launched an official flagship store for its brands, Aveeno and Neutrogena, on Lazada to take advantage of the marketplace’s high traffic.

“Ecommerce isn’t the cherry on the cake, it becomes the new cake,” says Jean-Paul Agon, CEO of L’Oreal Group.

Selling online also helps L’Oreal cut costs,

“With traditional channels, there’s counters, samples and purity materials, when we do ecommerce, the cost is lower,” says Agon.

Unilever’s footprint

Unilever has 38 sub-brands under its management, and many are drugstore staples such as Vaseline and Sunsilk. The company reportedly made $22.3 billion from beauty sales last year.

The FMCG giant announced a partnership with Lazada earlier this year to collaborate on supply chain, fulfillment, data, marketing and social commerce. As Lazada saw a 181% growth surge in one year in its FMCG category, Unilever is looking to grab a large piece of the pie.

Unilever’s digital strategy in Southeast Asia reflects the company’s global ambitions,

“It’s important to change business models, to be inspired by startups, because the model of the past is not the model of the future,” says Keith Weed, CMO of Unilever Global.

Unilever Thailand unveiled a flagship store on Lazada earlier this year, selling ten of its most popular brands on the marketplace.

Unilever, Lazada Thailand

Johnson & Johnson’s footprint

Johnson & Johnson is responsible for nine beauty brands on the list – relatively small compared to the others but what it lacks in quantity, it’s well-known brands make up in popularity among users. Aveeno and Neutrogena are household staples for body and hair care.

The J&J brands can easily be found on the shelf of US drugstore chains such as Rite Aid, and as equally easily across the globe in a department store in Singapore or Bangkok. Offline footprint aside, consumers can also find a lot of these brands online – especially in China.

“Ecommerce is becoming a strategic imperative to winning baby,” says Christina Lu, VP Marketing for consumer personal care, Johnson & Johnson. In China, 15% of baby skincare sales come from ecommerce.

The group is also doubling down on an online strategy in Southeast Asia.

Aveeno flagship store, Lazada Philippines

Estée Lauder’s footprint

The company has reached $1 billion mark in yearly ecommerce sales, with online being Estée Lauder’s fastest growth channel.

“New experiences and innovative high quality products and services, which will encompass digital marketing, disruptive in-store merchandising, compelling creativity and omni-channel offerings is a priority for enhancing the customer engagement experience,” says Fabrizio Freda, CEO of Estée Lauder.

Brands under Estée Lauder, such as Bobbi Brown and MAC leverage from being global powerhouses, and solidify their presence in countries such as Thailand by launching brand.com.

Bobbi Brown Thailand

Why are these beauty brands so successful?

In 2016, global brands such as Unilever, Procter & Gamble and L’Oréal maintained a strong foothold in Thailand even as the market saw a rise in local beauty brands. According to Euromonitor, beauty brands have experienced a faster growth rate in 2016 because of aggressive digital marketing strategies via: 

  • Online content
  • Different purchasing incentives such as click-and-collect
  • Free delivery with online purchases.

What this research shows is the importance of a digital strategy – not many brands have the capability of breaking into markets without a long term online play.

Interested in reading more on beauty? Check out eIQ’s BeautyIQ Series, where we cover different aspects of building a successful beauty brand in a digital age.

The original infographic was published on Business Insider, access the article here.

Here’s what you need to know.

1. Lazada partners with Unilever to capture Southeast Asia’s online retail growth

Lazada, has joined hands with Unilever in hopes of grabbing a bigger slice of the region’s online retail market in fast-moving consumer goods.

Lazada’s FMCG product category grew by 181% in 2016 over 2015, making it the platform’s strongest growth category.

The two companies will work closely together on supply chain, fulfillment, data, marketing, social commerce and talent development to grow their business’ reach in the region.

The partnership will allow Unilever to test new products before deciding whether to send them offline, while also allowing the company to offer exclusive products to Lazada shoppers.

Read the rest of the story here.

 

2. Unilever acquires minority stake in direct-to-consumer skincare brand True Botanicals

The deal is Unilever Ventures’ first with a direct-to-consumer luxury skincare brand, and demonstrates the appeal of natural products and digital business models to beauty investors.

Olivier Garel, head of Unilever Ventures said:

From a business perspective, the direct distribution enables the company to invest much more than has been traditional in the product quality and the shopping experience

True Botanicals is available at Barneys New York and natural beauty retailer Follain, but the company doesn’t anticipate brick-and-mortar sales ever exceeding 20% of its turnover.

Read the rest of the story here.

 

3. WeChat expands in Europe in bid for global advertisers and payments partners

Owned by Tencent Holdings Ltd., WeChat is looking to launch an office in the U.K. and another European country, alongside its existing presence in Italy.

WeChat is now focusing more on business-to-business, encouraging Western brands to sell products on the WeChat platform.

In Europe, the focus is first on fashion and luxury goods, and will in time expand to travel and broader retail services. WeChat is hoping its expansion in Europe will convince more high-profile brands onto the platform, to also reach Chinese tourists visiting Europe.

Tencent could be trying to do what Alipay is doing, but there’s much more uncertainty in terms of when the business could take off, as it would need to overcome many regulatory hurdles.

Read the rest of the story here.