PART 1: MOBILE
A number of factors have contributed to make Asia a mobile first region. Affordable smartphones and an emerging middle class, coupled with increased network speeds and relative decreases in mobile data costs have lead to a situation where mobile is the internet, as more than 90% of Southeast Asia’s internet users are on smartphones, revealed Google’s e-Conomy SEA Spotlight 2017 report.
This democratisation of access to technology has extended to other areas like cloud computing, the internet of things (IoT), big data processing capabilities and advanced analytics. These technologies have helped to create vibrant start-up environments around the region that are exploring and exploiting new ways of reaching customers, new businesses and commerce models.
Global digital platforms, as well as more and more locally founded players, are building their capabilities here for good reason. Increasingly, the unique needs and behaviours of people in this region will shape the product and experience development for global audiences.
User behaviour and attitudes to things like technology and privacy are different in this region; globally, 27% of people are willing to share their data in exchange for benefits or rewards, revealed in Gfk’s Willingness to Share Personal Data in Exchange for Benefits or Rewards survey. In China, 38% of people are willing to make the same transaction. Globally, 34% of people use a mobile to compare the prices of a product in store, in Asia that percentage rises to 45%.
7 Asian countries (South Korea, Thailand, Taiwan, Malaysia, Hong Kong, China, Singapore) were ranked in the top 10 countries with the highest m-Commerce penetration rates, We Are Social’s Digital in 2018 report revealed. In Q2 2017, Global Web Index Asia Pacific Region reported 79% of adults in APAC accessing the internet claim to have recently purchased a product.
Unsurprisingly, given the cultural and economic diversity across APAC and the blistering pace of technology adoption by the emerging middle classes around the region, there are many, many approaches to mCommerce on display here. Here we explore some noteworthy trends and developments:
Mobile Hero 1 – Go Jek
Go-Jek had humble beginnings in 2010 as a call centre that enabled riders to order a Gojek (a motorcycle taxi) by phone. In 2014, Go-Jek was launched as a smartphone app. Anticipating that ride-hailing services alone were insufficient to achieve lift-off and scale, Go-Jek launched Go-Send (a courier service) and Go-Food (food delivery) in the same year.
Within 14 months, the app registered 100 million transactions. Added services launched in quick succession, including Go-Mart (grocery delivery), Go-Clean (a housekeeping and cleaning service) and even Go-Massage (for booking spa treatments anywhere). Almost anything can be delivered to customers’ doorsteps by Go-Jek drivers, from lunch to home massage services.
Mobile Hero 2 – Paytm
Paytm is one of the most successful payment and money transfer apps used in India, allowing users to transfer cash into the integrated wallet via online banking, debit cards, and credit cards, or depositing cash via select banks and partners. Allowing customers to go cash-free and pay merchants with their smartphones, Paytm received a huge surge of user demand following the demonetization of the Indian economy and a cash shortage. Nearly overnight, from villages to cities, small mom-and-pop shops to large retailers, people embraced the new payment method.
Through Paytm, users are able to recharge mobile phones, metro cards, data cards, as well as make postpaid payments for mobile phones, landline and broadband, electricity, water and gas bills. Users can also book tickets for buses, trains, flights, movies, hotel rooms, and pay for taxi rides using the platform.
Paytm gradually transformed into an e-marketplace where users can purchase goods on the platform using the wallet, and even make offline payments at selected merchants. According to eMarketer, Paytm Mall has provided customers with access to about 68 million products sold by 140,000 vendors. Cashless payments can be made without internet connectivity, via the use of QR codes or bar codes and a One-time Password.
Mobile Hero 3 – Tencent
Tencent and Facebook have spent 2018 in a battle for the title of the world’s most valuable social network company. East versus West has never been more at the fore.
Starting out as a free PC-based instant messaging service, Tencent capitalised on the increased importance of mobile and launched WeChat in 2011. Since then, Tencent has added official accounts, payment services, a game center and even an office chat app to WeChat, becoming an integral part of modern Chinese life.
WeChat’s one billion monthly active users provide business opportunities for e-commerce platforms based on social media. And as WeChat targets growth in payments and offline services, the company has leveraged on its social foundations and is moving into the eCommerce sphere in its own unique way. And at the bottom of every transaction on WeChat is WeChat Pay, the app’s digital wallet.
WeChat Mini Programs
The WeChat mini program allows stores to sell their product in new ways; such as group purchases facilitated by chat groups. It is a lightweight application that does not require installation, and can include novel services such as car and food delivery on top of shopping. And, owing to the giant social network of WeChat, stores and brands can make the most of the billion active users on the platform.
Between launching in 2017 to the end of January 2018, a total of 580,000 mini-programs involving one million developers, linking with 2,300 third-party platforms and over 170 million daily active users were already found on the app.
The WeChat mini programs have also changed how social influencers make money from their fanbase. In the past, influential bloggers were only able to direct their followers to a link at in a blog post. Now, social media influences can embed a store’s mini program directly inside their article. Key opinion leaders are now able to monetize more easily.
A fine example is the Tencent-backed Pinduoduo having embedded its entire eCommerce platform inside WeChat. This startup leverages on every user’s social network by offering group discounts for purchases. A packet of sweets cost US$3 if you buy it alone – the price drops to about US$2 if you rope in other friends. This offers peer-to-peer marketing as well.
In 2017, Alibaba had a higher gross market value at $701 billion (to Amazon’s $225 billion) while Amazon had higher revenue ($178 billion to Alibaba’s $34 billion), according to Kleiner, Perkins, Caufield & Byers Partner Mary Meeker’s 2018 Internet Trends Report. In China, the rise of local players will continue to grow and potentially formerly global leaders. Local Mobile Heroes are attuned to the cultural needs and norms of their users and the businesses that want to reach them, which is a strong accelerator of adoption by consumers and brands. As our local audiences look to the East rather than the West for solutions this has never been a more exciting time for the region.
PART 2: SOCIAL COMMERCE
Social commerce is the use of social media as a channel to allow customers to purchase products directly from their newsfeed. Social media as an entity is no longer just one component of a customer’s purchase journey. It’s becoming an eCommerce platform in its own right.
Social commerce in Southeast Asia has taken a very unique journey. The fragmented market, dominance of mobile and the use of social networks and apps for business communications has created a growth in ‘conversational commerce’ and the rise of these channels as a purchasing route – consulting firm Bain & Co. estimates that roughly 30% of digital sales in the region took place via a social network in 2016 and is likely to increase.
Social commerce isn’t just about social media – it is centred around community and trust. In crowded eCommerce spaces, using the positive feedback of others represents a sure-fire way to both signal trust and set a brand apart from its competitors giving consumers an active voice in the marketing ecosystem. KPMG’s 2017 Global Online Consumer Report revealed that Asia has the highest proportion of shoppers who share product feedback online.
Consumer behaviour is demonstrating clear preferences for ‘real people’ living ‘real lives’. Therefore, micro-influencers are a rapidly growing trend on platforms like Instagram for good reasons – they are considered more authentic than celebrities, they have more targeted audiences, high engagement rates and are clearing living particular brand ideals.
In December 2017, Maybelline Philippines used a variety of creative assets designed for mobile and ran their campaign exclusively on Facebook. The campaign yielded 27 times higher returns on ad spend than in the previous year. As a result, Maybelline became the number one health and beauty brand on Lazada during the period of their campaign in the Philippines.
The concept of social media as a black hole of marketing ROI is no longer valid. Social commerce is looking to be an extremely effective way to reach an audience today that is largely social media-oriented. A fundamental aspect of social media is the one-to-one connection with users. In 2016, Bain & Company partnered with Google to survey more than 6,000 consumers in Singapore, Thailand, Malaysia, Indonesia, Philippines and Vietnam. While 100 million consumers in Southeast Asia have made a digital purchase, a far larger group — 150 million — has taken the first big step of researching products or engaging with sellers online, reported Bain & Company. As eCommerce sales grow, brands who understand the principles of social commerce will inevitably drive more sales than those who do not engage effectively in social media.
PART 3: EMERGING TRENDS
Increasingly, brands are experimenting with Augmented Reality(AR), Virtual Reality (VR) and Gamification to enhance a shopping experience and drive sales both instore and online. Mobile phones are central to delivering these immersive experiences to consumers.
A Worldpay study of more than 16,000 consumers across eight Asia-Pacific (APAC) markets revealed that 95% of respondents used VR or AR technology in the past three months. This high percentage was partly due to the inclusion of China which is paving the way in these emerging technologies. In Japan, the adoption was much lower, with only 19% in of consumers having ever tried VR technology. Most interestingly for Commerce brands was that only 1% of consumers across 8 APAC markets would never be comfortable making a purchase in a virtual environment.
eCommerce remains relatively underdeveloped in SEA, contributing to only 3.2% of total retail sales in 2018, revealed Forrester Analytics in their Online Retail Forecast. AR could offer a viable alternative in eCommerce to boost online sales by enabling consumers to try and visualise the products in their environment before buying.
In the US, eBay is embracing AR to remove the friction against buying and selling online. In March this year, eBay launched a tool running on Google’s new ARCore platform to help sellers find the best sized box to ship items to buyers.
While the use of AR is considerably nascent in the region, AR is becoming a scalable medium to engage and impress consumers. When done well, it’s an opportunity to redefine how people shop.
VR is the use of computer technology to create a simulated environment completely different from reality. When Unity and Lionsgate created a virtual room” to promote the release of the horror film Jigsaw, an emotional efficacy study by Isobar compared watching the trailer in VR versus non-VR and saw elevated heart rate of over 24%.
Many industry experts predict VR to be a major factor in changing how we’ll shop and socialize in the future. Facebook CEO Mark Zuckerberg predicts VR will become the “most social platform” out there. Greenlight Insights, a market research company specialising in VR and AR industries, released results from its Virtual Reality Consumer Report with a majority of respondents claiming that they would be more inclined to purchase from a brand that uses VR than from one that doesn’t.
VR technology can evoke a powerful response but there are added complexities when bringing to life a VR experience. The development can be timely, costly and often still require a headset for full impact making it less scalable when compared to AR.
In China, Pinduoduo, a social commerce app has gained immense popularity ranking the 2nd most popular eCommerce app in the country. The shopping app is seamlessly integrated with WeChat, allowing its customers to lock in low-price deals by rounding up a group of friends to purchase the same item. Using simple gamification methods involving discounts, cash back incentives and product giveaways to loyal customers the app has a receipt for success.
When considering AR, VR or Gamification as part of your mCommerce experience, it’s important to develop something consumer centric that offers genuine value and purpose. How can experimental technology save someone’s time, increase satisfaction or save them money? At the heart of any new technology is a seamless user experience and when compromised, this may negatively impact satisfaction levels.
PART 4: BEST PRACTICES FOR MCOMMERCE
Even with the diversity on display across mCommerce in the region there are certain key elements to keep in mind as you develop your own commerce roadmap, whether you’re at the start of the journey or further down the road towards your goal of infinite moments of truth.
Mobile users typically search for specific information, and are more likely to perform pre-purchase research on mobile devices. According to Google’s Consumer Barometer, 91% of mobile searches in Malaysia lead to further action – whether it’s looking for more information or purchasing a product or service – and in Singapore this figure is 84%.
It is also important to note that mobile users tend to be more impatient, and tend to leave a website which takes more than three seconds to load, affecting potential leads for brands.
Beyond the signals consumers receive, what is truly helping to shape the consumer journey are the signals they send via their mobile devices while connected and on-the-go. Location signals enable marketers to surface relevant messaging to surrounding offers. Contextual signals help brands understand what type of content they are interested in so they can infer and define taste and preference personas to further refine the way media is placed, augmenting relevancy. These signals, coupled with the use of more precise and persistent identifiers such as device IDs, generate richer and deeper graphs of consumer digital behavior and shopper preference.
Mobile Ready Hero Images
Mobile Ready Hero Images are images in product listings that contain additional information in the form of copy, badges or icons. Ensuring that these images are built with clear visuals and key product information served (e.g. type, size, number of contents, origin) allow consumers to recognize and make their purchase decisions easily without having to refer to the titles or product cards. This enables marketers to optimize their mobile shopping experience for speed, clarity and ease.
Titles and descriptions
Other crucial elements of your mCommerce content are titles and descriptions of your products. With the limitations of a smaller mobile screen, key information has to be delivered with shorter titles and descriptions. For many marketplaces, the capabilities on their desktop and mobile versions are different and solutions offered may be different on mobile web versus app versus desktop. Assets need to be optimised and fit for use for all platforms.
User Experience (UX)
To generate social sales through content, simple social platform solutions allow marketers to create direct commerce channels via Facebook Messenger. Instagram’s direct in-post sales integration allow easy links from product through to check-out. For small and medium-sized enterprises, it reduces the need to invest in technical support and platform maintenance.
Vendors are now bringing to the digital high street tools that have traditionally been customised enterprise level solutions. Numerous web hosting services on the market can be leveraged on to create a commerce portal that is optimised for desktop and mobile. Many come with the flexibility of adding more sophisticated tools such as inventory management or integration into fulfilment services. Peripheral service plug-ins for loyalty and engagement, gamification, managing payment gateways, review management can be integrated as well.
The future looks like selecting and integrating a range of complimentary service providers that can complete your own ecosystem without having to invest heavily in bespoke services, with everything optimised and responsive for mobile device use. And to this point, with fundamental infrastructure well taken care of, the onus for effective mCommerce falls on creating excellent user experiences.
Optimizations to your mCommerce sites should be cross-referenced with behavioural insights related to performance. Businesses are increasingly turning to conversion rate optimisation (CRO) as a practice as integral to success as well executed SEM and SEO. CRO combines research hypothesis with UX optimisation and performance analysis to continually tune mCommerce sites for better conversion results.
Zooming in further, this can extend to site components such as dynamic checkout buttons which can accelerate mobile conversions by reducing the number of steps to complete a purchase. It is also possible to deliver personalised mobile checkout experiences by serving up your customer’s preferred payment method or wallet.
Process and experience enablement through accessible technology will increasingly be an automated and high frequency activity, suitably tailored for each customer’s user expectation and behaviour. This is incredibly empowering for businesses who can focus resources on delivering excellent products and services without diverting effort into marketing and platform activity that is has long evaded becoming the commodity that it is.
- Anna Trybocka, Founding Partner & CEO, CrescoData
- Annie McNamara, Head of Sales, APAC, LoopMe
- Divya Acharya, Director, Product, APAC, Xaxis
- Gosia Rakowska, Head of eMerchandising, Asia Pacific, Publicis Media
- Pedro Ramirez, Digital Lead, Team Unilever AAR, Mindshare Asia Pacific
- Rohan Lightfoot, Chief Growth Officer, Mindshare APAC