Insights Asia’s Ecommerce is Coming of Age… 3 Emerging Trends

Covid-19 has compelled consumers online, and faster than brands thought possible. It isn’t just the transformation in consumer behaviour, it’s also the unprecedented pace of this change — we’ve leapfrogged ahead by years, rather than days. Ecommerce penetration in the U.S saw ten years’ worth of growth in three months earlier this year.

But we have a more dynamic story playing out closer home. China was already leading digital adoption well before the pandemic — making up 45% of global ecommerce transactions, with mobile payment penetration 3 times higher than the US. These agile operations served Chinese companies well through the crisis. Alibaba’s Freshippo supermarkets for instance, quickly ironed out supply chain issues to meet rising online orders for fresh fruit and vegetables., Pinduoduo, and Japan’s Seven & I now rank among the top 10 retailers worldwide.

Even in parts of Asia with less mature online infrastructure, people quickly switched over to new ways of business in a matter of weeks. These trends have impacted not just established ecommerce platforms such as Singapore based Shopee and Lazada, but Vietnam’s Sendo, and Tokopedia and Bukalapak in Indonesia.

Asia-Pacific will remain the world’s growth engine in the post-virus world, but brands are evolving their mindsets and strategies to meet buyers exactly where they’re needed. We’re charting 3 ecommerce trends to watch out for, as Asian consumers come of age.

Source: Asia House

Social retail: Digital-centric brick & mortar

Led by Key Opinion Consumers (KOCs), livestreaming and private domain traffic much of China’s social ecosystem has devolved away from traditional brand-led models, to decentralised, consumer-motivated social conversations. In this scenario, brands are innovating smaller, faster and more flexible marketing strategies like social retail, which revolve around rewarding consumers for what they share online. Social retail strategies have already penetrated close to 71% of the country, with both mass and luxury players extending their programs across the mainland. 

Burberry debuted its first social retail store in Shenzhen, China in early August 2020. The 5800 square foot store (designed in partnership with Tencent) encourages customers to interact with products in person and on social media. 

Shoppers can unlock content via WeChat, everything from store tours and product information to event bookings and table reservations at the in-store Thomas’ Cafe. 

Burberry isn’t the first. Nike, Perfect Corp. and Benefit Cosmetics, have gone further to bring augmented reality features to enhance in-store try-outs. With QR codes for contactless payments to WeChat official accounts and mini programs, the emphasis is on connecting social and retail environments — so brands can build deeper bonds, and  emotional resonance with home-bound customers.

2. Blended service: One-on-one and always on

An average of 5 touch points shape consumer decisions, but across these, one feature holds true: approximately 50% of consumers considered one-on-one and personalised sales service to be the most critical factor to purchase.

Asia’s most successful brands are proactively accumulating and activating omni-channel consumer data across operations. They’re developing digital tools to help frontline sales translate this data into customised shopping experiences.

Has this paid off? Take personal care retailer Watsons. They launched cloud-based stores in early 2020 on China’s WeChat Work platform. Customers are encouraged to add staff on the chat app, so staff can help out with personalised beauty recommendations and answer queries. When human advisors are not available, shoppers can turn to AI chatbot, Wilson. Watson’s digital initiatives helped the brand boost online sales by 80% at the peak of the COVID pandemic.

Blending chat, payment, and staff-customer relationships into a single ecosystem is key: giving brands the ability to offer customers one-on-one service, round-the-clock.   

3. Supply chain resilience: Go local, diversify

The pandemic also exposed the inherent weaknesses of our global supply chains. With US-China trade tensions and empty supermarket shelves through the early weeks of COVID-19, ecommerce brands are being forced to rethink their supply chain spending to mitigate the risk of future disruptions. The top three supply chain priorities for organisations in the coming three years are increasing flexibility, boosting resilience and protecting business continuity, according to a survey of 200 global manufacturers by Bain & Company and the Digital Supply Chain Institute. Only 36% of respondents ranked cost reduction as a top three goal, down from 63% who saw it as a priority previously.

Moving away from single-source dependencies, ecommerce in coming years is geared towards the rise of regional logistics hubs. With the goal of creating diversified and localised supply chains, product integrators, sub-system suppliers and component suppliers are set to source, assemble and deliver from their own backyards (or at least closer home).  

Source: Bain & Company

Recovery through data and digital

The coming year may bring uncertainty, but interesting opportunities remain for those who spot the signal in the noise and push for innovation. By understanding user needs and pain points; whether that’s robust inventories, contactless payments, digital security, one-on-one service, or social engagement, brands can move beyond a narrow focus on price, to win Asia’s customers through better experiences — now and into the future.