The first half of 2020 has been about six months of rapid transformation for Asia's online commerce space. While the industry was already in the throes of rapid growth, the onset and rapid spread of COVID-19 further catalysed the changes, as a range of organisations tumble over themselves to cater to consumers who are taking their purchases online.
A Campaign Connect panel discussion Wednesday (June 3) focused on these changes and took on the big question hanging over all this activity: How much of this consumer change will remain, and how much might revert to the old way of doing things?
With the advent of initiatives such as direct-to-consumer businesses, subscription services and rapid growth of innovations such as live streaming, people have rapidly adapted their shopping preferences during the pandemic, and marketers and brands have been racing to keep pace. "Versatility and the ability to move with the times is essential for businesses to be COVID-19 ready," argued Frederique Covington, SVP and head of marketing and cross border at Visa.
As people rapidly took their offline experiences online, it resulted in head-snapping changes—and opportunities. For instance, in the case of Grab, a subscription bubble tea business exploded in popularity, growing 12,460% and providing both Grab and the tea vendors on the service with all sorts of useful customer data. "We've discovered popular flavours ranging from durian and Horlicks to cheese pudding in Vietnam," said Ken Mandel, regional managing director of GrabAds and brand insights with Grab.
Grab also had to rapidly scale its food-delivery capabilities as the pandemic hit. In one day in Malaysia, the company converted 18,000 drivers from using four-wheel vehicles for logistics deliveries to driving two-wheelers to make food deliveries. In a month that number reached 140,000.
Michelle Yip, CMO with Lazada, told attendees that even a company of Lazada's scale found itself scrambling when faced with a surge in traffic and extraordinary demand for orders and products. "Every basket was larger and there were more people shopping in Singapore, especially during the DORSCON Orange and circuit breaker periods," she said. "We changed our system from time to area-based checkout availability to help consumers."
To keep pace with the rapid shift online, marketplaces such as Lazada are prioritising deliveries to healthcare workers and providing subsidies to sellers on their platforms to try to make the growth sustainable. "The number of new sellers has grown 3X, and we have four times the usual number of sign ups," added Yip.
Platforms such as Lazada are also upending several offline habits to try to ensure they keep consumers who shifted their purchases online due to the pandemic. For instance, the company has seen strong demand for live streaming—27 million views on its platforms—as people get comfortable with this new medium. "This goes back to human need to want to engage ... Earlier people used a search-find-reviews model, but now they want more," she explained. "We just don't want to buy a bottle of wine, we want someone to taste it for you."
But, is rushing online a must for every company? And which is the best way to get there? While many businesses, especially smaller enterprises, may be in a tearing hurry to get online to cater to shifting consumer preferences, panelists said they need to exercise caution while plotting their e-path.
"There's nothing common about the crisis [compared to previous calamities]," said Julia Lee, vice president and GM in APAC for Braze. "There is a clear rush to get online ... but there needs to be more careful consideration, because there is a temptation to just get things done—to plug in a website, build an app and [other] hodge-podge solutions."
In this rush, brands could easily underestimate the cost of delays from a poorly executed tech stack. "Marketers need to be careful of the hidden cost of these delays.... Don't rush for good enough," Lee said.
Roshat Adnani, country head in Indonesia for M&C Saatchi Performance, said that for brands looking to go online quickly in Asia, the direct-to-consumer route worked well because of the sheer size of the market, the mobile-first nature of the economies and cultural acceptance of buying from smaller, lesser-known brands. "This is different from the west where brands have direct relationships with brands, while in Asia there is a lot of choice in terms of [online] marketplaces and distribution players such as Ninjavan," he added.
While subscription commerce may be one route to go online, this route was initially dominated by services and media (cable TV and then streaming services like Netflix), several products and brands (bubble tea, Dollar Shave Club and Bombay Shaving Company being examples) are also jumping on this bandwagon. However, limited payment options and the need to personalise offerings have slowed this segment's growth in APAC, Adnani contended.