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Workers aged 30-34 claim the highest average gross income levels in the Philippines. And as the relatively young population is set to see a surge of middle class households – especially the single person household – for the next 13 years, strong growth is predicted for the following industries: clothing, footwear, hotels and transport.

Despite an increase in the middle class, the social class E (lowest income class) still remains dominant and represents a bigger market for low cost food, housing and apparel.

The impact of the increasingly affluent Filipino shopper should not be overlooked by global brands as the current focus of many companies is trained on larger markets like Indonesia and Thailand. Traction in the market could easily be tested through a social media campaign as Zara did for Thailand as Filipinos are highly active on social channels. The best way to reach new consumers is through a channel they are already highly active on.

ecommerceIQ

Zara Thailand announcement of online shop on Facebook.

Japanese clothing brand Uniqlo and Nestlé are two global brands that stand out in the Philippines through social media campaigns to attract the country’s almost 40 million Facebook users, a number that is expected to jump to 47.5 million next year.

Nestlé’s Facebook rewards scheme that was launched in 2011 encouraged followers to invite friends to ‘like’ the page in order to win points and prizes. The coffee brand also sells on Lazada and incentives shoppers on Facebook with discounts and promotions.

Earlier this year, Nestlé was awarded by Youtube for releasing one of the most popular Youtube ads in the Philippines. Some other popular campaigns include: 

Youtube Ads Philippines

Uniqlo, on the other hand, has been speedily launching offline stores in popular shopping locations but does not currently offer ecommerce in the Philippines. The company’s recent and successful launch of its shoppable website in Thailand could persuade the brand to move forward with a similar strategy as the markets share similarities. 

Here’s what you need to know today.

1. Sea (formerly Garena) files for $1 billion IPO

Sea Ltd., Southeast Asia’s most valuable startup, has filed confidentially for a potential U.S. initial public offering that could raise about $1 billion.

Sea is considering listing in early 2018, though no final decisions have been made

The company, founded in 2009 by entrepreneur Forrest Li, began as an online gaming portal and has since branched out to add mobile shopping and payment services. A $1 billion deal would be the largest technology IPO out of Southeast Asia, according to data compiled by Bloomberg.

Any overseas listing of Sea would be a blow for Singapore, which has been trying to woo local startups to sell shares at home as it seeks to build a regional hub for fast-growing, innovative companies.

Read the rest of the story here.

 

2. Philippine blockchain startup Coins tops up series A with another $5m

Blockchain-powered fintech startup Coins announced today it has raised an extra US$5 million for its series A, which it first raised last October.

The funding is led by Naspers Ventures, the investment arm of South African tech and internet conglomerate Naspers.

Headquartered in Manila, Coins uses blockchain technology to enable financial services like money remittances, bill payments, and mobile credit top-up for its users, whether they have a bank account or not.

The unbanked – people who don’t have access to traditional banking services – are a big part of the company’s mission. The startup’s technology helps them access a range of those services through just a mobile phone. Users can top up their e-wallet easily at physical outlets that partner with Coins and thereafter use it for online transactions.

Read the rest of the story here.

 

3. Recommended Reading: Report: ‘Ultra-fast’ fashion players gain on Zara, H&M

Now, in a challenge to those fast-fashion stalwarts, many smaller apparel brands have sped up the design-to-sale process even more, turning fast fashion into “ultra-fast fashion,”

Boohoo.com, ASOS and Missguided can produce merchandise in two to four weeks, compared to five weeks for Zara and H&M and the six- to nine-month cycle for traditional retailers.

“Customers want it now,”said Shelley E. Kohan, VP of retail consulting. “There’s an emotional immediacy attached to that.”

Now lower-priced retailers like Boohoo and ASOS, which have strong (if not pure-play) ecommerce operations, are now challenging even the fast-fashion old-timers, according to Fung Global.

Read the rest of the story here.

As ecommerce in Thailand is aggressively propelling forward, even companies with a rich traditional heritage such as Somjai, one of Thailand’s oldest and most famous stationery store chains, are going online to grow their sales channels.

And there is good reason for that – the number of customers shopping online is steadily increasing. According to Statista, 12.1 million consumers in Thailand are expected to make purchases online this year. This number is projected to grow by 15% within the next five years reaching 13.9 million in 2021.

Online shoppers in Thailand

In Thailand, 4.4 million online shoppers are 25-34 year olds and are followed closely by 3.9 million online users aged 16-24 years.

These two age brackets together make up two thirds of all online shoppers and the ratio is projected to remain consistent in the medium term.

Overall, it is forecasted that within five years, every fourth Thai will shop online, up from around every fifth now.

online shoppers in Thailand

But ecommerce user growth in the Land of Smiles is not even the fastest in Southeast Asia. In Indonesia, ecommerce user penetration is expected to almost double from 2015 to 2021. However, the amount customers in Thailand are expected spend on average online is predicted to soar.

In 2021, an online Thai buyer will spend $382 per year, which is 57% more than the expected spending of $243 per user in 2017.

What to keep in mind?

More online shoppers means more potential customers for businesses with online channels. Understanding the trends of what, when and where these customers buy is essential to capturing more of them going online.

  • Thais have more money to spend on shopping as Thailand has the third highest GDP per capita in the region after Singapore and Malaysia.
  • More companies in Thailand are seeing the benefits of an omni-channel strategy such as Zara, Uniqlo, Adidas who have invested in their own brand.com in addition to offline stores.
  • The tech-savvy generation (16-34 year olds) is accustomed to online shopping both on social media, e-marketplaces/brand.com.
  • Spending power will continue to rise and two-thirds of consumption growth in the period to 2030 will come from increasing per capita spending.
  • Research reports, tools such as Google’s Consumer Barometer and eIQ articles provide useful insights on Thailand’s online shoppers’ behavior and trends.

 


Join eIQ Network for more online retail insights here.

European fashion group Inditex, operator of global fast fashion chain Zara is making an aggressive global push this year through expansion of stores, following a 10% rise in full net-year earnings.

The group, which also owns fashion brands Pull&Bear and Bershka, plans to open 450-500 new offline stores in 2017 while closing approximately 150-200 of its smaller stores worldwide. Read more

Here’s what you should know.

1. Walmart’s Jet.com to buy fashion retailer ModCloth for less than $75m

The deal, which had already been rumored, is almost finalized and will fetch a price tag between $50 million and $75 million.

Walmart has been snapping up smaller online retailers in recent months

The acquisition comes after a series of struggles for ModCloth, including several rounds of layoffs. The company saw little growth in 2014, and reduced its engineering team to just over half a dozen.

Walmart explained that it’s increasingly interested in the apparel category, given it’s now one of the largest for online retail.

Read the rest of the story here.

 

2. fast fashion brand Zara to launch ecommerce in Thailand

It seems that Zara is doubling down on ecommerce in Asia, having launched its online website in Singapore and Malaysia earlier this month. Thailand and Vietnam’s stores will launch within the next few weeks, with India following later this year.

Zara’s  business model allows it to get clothes to stores much faster than its rivals, who prioritize low-production costs and outsource manufacturing to China, and can react more quickly to shifting consumer tastes without holding excess inventory.

Read the rest of the story here.

 

3. Recommended Reading: The 2017 Indonesian startup popular sector forecast

DailySocial conducted a survey with a number of investors about which sectors are going to be hot, and what their focus in 2017 will be. Along with predictions, ecommerce influencers also share their two cents:

“From year to year, ecommerce services and online transactions will become part of Indonesians’ day-to-day activities,” says William Tanuwijaya, CEO of Tokopedia.

Read the rest of the story here.

 

Here’s what you should know for today.

1. Rocket Internet’s home services marketplace Helpling raises $11m

This latest funding round is led by APACIG, a joint venture between the German startup investor and Qatari telco Ooredoo. It’s a downround, however, which means that its valuation decreased as compared to the previous funding round.

 Helpling has also announced it’ll bring window cleaning, furniture assembling, and paint work to all its markets.

Helpling’s business model is asset-light. However, this type of model is easy to replicate. How can it beat out local and regional competition to become a dominant player?

What are people saying about it? “I think it’s a tough model because clients don’t have loyalty to the middleman platform,” says Poh Chen Wei, founder of Pegaxis, a B2B platform that connects service providers to properties.

 

2. World Bank’s IFC investment firm invests $2M in Southeast Asian fund SeedPlus

IFC confirmed today that it has invested $2 million in the SeedPlus fund, the size of which has not been disclosed.

Its portfolio includes B2B repairs platform Moglix, Mimetic.ai, which manages an AI assistant platform, and mobile security firm AppKnox.

“Ultimately we want to curate and carefully select our investor base, that goes back to our focus to support our startups beyond Singapore and Southeast Asia,” said Tiang Lim Foo, operating partner at SeedPlus.

Read the rest of the story here.

 

3. Recommended Reading: Fast fashion fading as H&M, Zara show strain

Retailers’ recent results illustrate the difficulties facing the fashion industry as consumers divert spending to leisure activities and buy more of their apparel from a rising number of online suppliers.

Richard Chamberlain, analyst at RBC Capital estimates that H&M’s same-store sales fell 3% in the month, weighed down by the tough industry conditions and as initiatives to expand online options for customers and improve methods of supply take time to feed through to sales.

Read the rest of the story here.

 

4. Community Chatter: Malaysians are savers

Source: Nielsen’s Twitter account

Malaysia now has one of the lowest consumer confidence ratings in Southeast Asia, which does not bode well for local demand in the country for 2017, according to Nielsen’s findings.

Read the rest of the story here.