Southeast Asia’s eCommerce sector was already seeing enormous growth before the pandemic, up from US$5.5 billion in 2015 to US$38 billion in 2019, according to a report from Bain and Facebook. The sector is forecast to exceed US$150 billion in value by 2025.
Now, Covid-19 is moving consumers online faster than many companies thought possible. "In the span of a couple of months we’ve had a year’s worth of improvement in terms of the number of customers that have adopted digital," says Alin Dobrea, head of marketing solutions and partnerships at Zalora.
85% of digital consumers across southeast Asia surveyed by Bain said they had tried new digital apps such as eCommerce and digital payment in Q1 this year.
“In Q2, we had almost two million new users download the Zalora app, and the share of the new customer contribution to the business has increased by more than 100%,” says Dobrea. “So there is a very encouraging trend of new customer adoption in the region.”
While eCommerce isn’t something new, the pandemic has resulted in many companies relooking at their business model and rethinking their strategies.
"We’ve got clients who have already been looking at eCommerce and really doubled down during this period, looking into new aspects such as social commerce and live streaming," says Eunice Loh, digital & platforms director SEA, Wavemaker. Loh says she is more frequently discussing building big eCommerce teams with clients - teams which are almost the size of the usual digital buying teams. "It's really quite a huge shift that we otherwise may not have seen if we weren’t in this situation."
This is echoed throughout the region as brands and businesses have sought to take advantage of the growth of eCommerce during the pandemic.
"For us, one of the ways of future proofing the business is to really look at all of this more intensively," says Eka Sugiarto, head of media, Indonesia and SEAA, Unilever. "Because there is more potential to be unlocked, not only from sales, but it is also one of the ways to get customers who were previously unreachable to very much engage with us in a new medium in the commerce environment."
There's no doubt that it's an incredibly exciting time for eCommerce. Not only has it opened up a whole new stream of sales potential, there’s the data aspect too. eCommerce has opened up new data sources that in turn provide new ways for brands to run and measure the outcomes of their campaigns; measurement practices that are truly transformative.
To help brands leverage eCommerce information and insights to create better outcomes, The Trade Desk has signed a number of landmark deals over the past 12 months to help brands tie advertising budgets back to real world sales. Partnerships with Gojek and Zalora for example, enable the Trade Desk to help brands directly attribute online sales to digital campaigns. The Trade Desk have integrated these partners into a data marketplace, enabling direct integration with platforms to facilitate sales measurement.
"We at The Trade Desk have long believed that a marketplace approach to anything is a better solution for our clients and advertisers because it gives the choice back to our clients," says Mitch Waters, SVP, Southeast Asia and Australia, The Trade Desk.
"We’ve done that really efficiently in inventory and creative sides, but what we want to do is also give that back in measurement. So being able to go out and find interesting data points in measurement, in audiences and in location – to then give the power back to our clients to pick the measurement solution that is right for their brand is incredibly important."
And it's yielding great results. E-tailer Zalora says their partnership with The Trade Desk has opened up new opportunities for them and their brand partners. "Basically, brands are empowered to use the data, to optimise their campaigns and reach the relevant customers and then this also empowers our customers because they're getting an improved product discovery experience through this," says Dobrea. "So I think it’s a win-win-win for everyone involved."
However, while programmatic has advanced a lot over the past decade or more, some brands or agencies are either unaware of the possibilities of programmatic advertising or reluctant to give programmatic a bigger seat at the table.
Waters believes that much of this is to do with the misconceptions that still exist around programmatic, and that there is still more education needed around its capabilities.
"Where programmatic is today is very different to where it was," says Waters. "I think where you’ll see programmatic and eCommerce collide more and more is as more upper funnel mediums come into the fray: we’re going to drag eCommerce strategy out of just pure performance into awareness, brand building, and audience building."
Overall, Waters says, the use case for eCommerce into the programmatic ecosystem is around the data it can bring.
We need to free eCommerce data from pure direct response campaigns to think about how we use it across the funnel - including in branding activity. Everything should be shoppable, and companies need to provide ad formats to enable that,” said Waters. ”We believe that focusing on shopability throughout the whole funnel will lead to better outcomes.”
Indeed, designing for eCommerce is leading many brands to become more creative, with shopability forming a bigger part of ad formats along with other marketing innovations.
"A lot of exciting things have happened," says Dobrea. "For us, the key point is that it’s very data driven. For example, the decision for us at Zalora to make a slight shift and onboard essentials and home & living categories was driven by the data and the rising consumer demand for those categories. We constantly test and try different ad formats across the ecosystem. We look at the data to see what’s working and what’s not working so well and we constantly reiterate."
In this region especially, a lot of eCommerce tends to be driven around festivals and shopping holidays. This is one trend that looks set to continue.
"I believe a lot of the eCommerce players are going to continue to embrace festivals because they do drive the adoption significantly," says Dobrea. "That’s why we’ve seen a surge of new festivals – we now have 6/6, 8/8, 9/9 and so on – which didn’t really exist a couple of years ago. And so I think they’ll continue to grow bigger and more important."
And what's also important, says Dobrea, is to use the data and be very evidence based in your marketing approach. "So looking at the whole funnel from awareness, excitement, consideration and conversion and making sure that you have the right attribution in place – definitely invest in the talent and the up-skilling and work with the right partners."
Waters at The Trade Desk adds that now is the time to free eCommerce from just the response driven performance element and bring commerce elements through your whole funnel of solutions.
"Here in Southeast Asia we really have an opportunity to lead the globe in a lot of this," says Waters. "But we’ll need everyone to help drive this – so let’s show the world what we can do in our region.”