Retail ecommerce sales in Asia-Pacific were expected to hit USD 877.61 billion in 2015, up 35.7 per cent from 2014, according to an eMarketer report. This made the region the largest digital retail market in the world. Ecommerce has finally found its way to being accepted by consumers as a trusted way of shopping. But it is not just about acquiring customers anymore for ecommerce companies.
In a one-on-one with Digital Market Asia, Ronan Hurley, Chief Operating Officer, Sephora Digital Division, who was a speaker at the recently convened Last Mile Fulfilment Asia (LMFAsia) 2016 in Singapore, talks about the ecommerce market in APAC and how important it is for the brands to pay attention to the ‘last mile’ of the ecommerce journey.
The new age customer
With the continuing rise of ecommerce in APAC, the consumers are also becoming more ‘smart’ as about 80 per cent use technology for research. Mr Hurley explains the rise and says that, “Companies are looking at what has worked in other parts of the world and have looked to replicate these models in Asia Pacific (APAC). We’re also seeing companies with tried and tested models launching their products in APAC as they see the potential the region has. This has meant that we have a wider variety of products and services available to us than ever before.”
Now the customer is not just tech savvy but also very demanding when it comes to choosing which platform to shop on – online or offline. “Retailers need to pay attention as data shows that consumers usually already know exactly what they’re going to buy before they enter a store. This is mainly due to the research they’ve done online about the product or service. To date, companies are addressing this in varied ways. Some have taken the plunge and opened up their own ecommerce store. Some have decided to dip their feet and sell their products through third-party platforms. Others use their website purely for branding and choose not to sell their products online. Companies should follow the path that best fits their corporate strategy,” Mr Hurley remarks.
Due to increasing connectivity and rise of ecommerce, shopping holidays from US such as Black Friday and Cyber Monday have found acceptance in APAC also. Mr Hurley explains, “The main driver behind these trends is the fact that ecommerce companies will look at any opportunity to encourage shoppers to come online. With Black Friday & Cyber Monday being widely reported on, along with Singles day in China, it makes sense for ecommerce companies in Southeast Asia (SEA) to follow suit and try to build on that momentum.”
Beyond customer acquisition
The job for the ecommerce companies does not end, once the customer clicks on the ‘buy’ button. The journey for a product from a warehouse to the customer’s doorstep is equally important – the ‘last mile’ as it is termed. “Creating a brand-defining experience based on the ‘last mile’ point is incredibly difficult in this region where the logistics infrastructure for ecommerce is still behind where all ecommerce companies would like it to be. While being able to offer delivery tracking, delivery time slots, great customer service, personalised touches and easy returns would all help with that experience, the most important thing for companies to focus on is ensuring the orders get to the customer in the time frame promised. Building that trust is key not only for their own company but also for the industry in general,” comments Mr Hurley.
It is the attention to this ‘last mile’ that would help the ecommerce companies in getting the customers to come back to the platform and purchase again, once the trust is built. Talking about the expectations from the industry in the year ahead, he says, “There will be further development in the industry, with greater investment and a greater selection of providers and products offered. It won’t happen overnight, but with the growth of ecommerce continuing in the region, the logistics industry will be forced to keep up.”
Trends to lookout for
With content and data being the buzzwords in the industry last year, Mr Hurley says, “Content is crucial and will be one of the key reasons why customers will keep coming back to a website. It will also be key for companies to identify these type of customers as they’ll ultimately be more profitable then the discount-oriented customer.”
He added, “Data will always be important to eCommerce. It helps companies unlock opportunities to improve their return on marketing spend, increasing average basket size and increase customer loyalty.”
Speaking about the new trends he would want to see in the industry, he says, “I would love to see digital evolving to being something other than price-focused in the region. The convenience factor has obviously played a big role, but I hope that content and user experience start taking on greater importance for customers.”
Giving advice to the ecommerce companies in APAC, Mr Hurley feels that it is always good for them to do a sense check and ensure that their business is scalable and sustainable. “With the technology market cooling down in the US, it’s important to ensure that you have the right building blocks in place to continue to grow,” he concludes.