ANALYSIS: E-COMMERCE
How global brands can ride the e-commerce wave in SEA ZALORA provides brands with data-driven insights derived from its 2.6 million users.
E
-commerce in Southeast Asia (SEA) grew rapidly as consumers switched to online channels. As this growth persists in the coming years, the challenge now for retailers is to better understand the “very complex and diverse” market. The region has seen some 40 million new internet users in 2020, according to a report by Google, Temasek, and Bain & Co. This growth also led to a 23.9% year-on-year rise in ZALORA’s active customers, driving a 41.4% increase in the company’s net merchandise value in the first quarter of 2021. “SEA is a very complex and diverse region, most brands tend to either establish logistic hubs in Singapore and try and cater the whole region from them, or work with a different partner for each country through a franchisor or distributor network,” Simone Cortini, ZALORA’s Marketplace and Platform Services director, told Singapore Business Review. “Whilst distributor networks have a value for the offline world in a connected online world, they often bring issues such as cross-country price discrepancies and cross-country
As more consumers embrace online shopping, one of the most critical resources that brands need to harness is data
Brands must ensure that they have a clear omnichannel strategy
assortment discrepancies,” he also said, adding this could drive customers away over time and lead them towards other brands. Seizing SEA’S e-commerce momentum In order for fashion and retail brands to stay ahead in the game, Cortini said the brands must ensure that they have a clear omnichannel strategy and access to strong decision-making driving data. They must also have a coherent customer experience and service quality across digital channels and a locally adjusted and tailored marketing strategy. ZALORA fulfills all four through its Operations by ZALORA service suite as well as TRENDER, which helps it deliver deep data insights to navigate the complex SEA market. “As more consumers embrace online shopping, one of the most critical resources that brands need to harness would be data,” Cortini said. This is to “derive genuine insights about consumers’ needs so they can better anticipate shopping behaviour and curate more effective engagement strategies, design processes, and even
demand projections.” Through this, brands are able to present the right product offerings at the right price and through the right channels. ZALORA, for instance, uses TRENDER Professional to mine data from its 2.6 million active users, allowing it to provide insights on geo segmentation, buying behaviour, design intelligence, assortment, and pricing. TRENDER proved to be an asset amidst the pandemic when ZALORA introduced a COVID-19 Sales Dashboard in aid of brands affected by the sudden shift in retail trends and consumer behaviour. ZALORA has so far recorded over 1,000 subscriptions on TRENDER. It has also partnered with global brands, such as Nike and Under Armour. ZALORA also provides an e-distribution solution that gives brands access to its logistics and delivery capabilities for products sold on their websites and online marketplaces. This could also accelerate brands’ e-commerce growth in the region without heavy capital expenditures. The e-retailer has been tapped by Puma and Superdry in their expansion to Indonesia and the Philippines. It is also looking to deepen its partnership with H&M Group, which will be launching new collections. Through this, ZALORA aims to eventually fulfill distribution services across Southeast Asia. “By being an e-commerce enabler, we hope to deepen ZALORA’s impact on the wider landscape in the region,” he said. What to expect Cortini said lifestyle brands— particularly in sports, loungewear, and kids, as well as in the wellness category—saw an increase in demand in the past year as consumers prioritised their health and wellbeing. He noted that nearly 90% of the customers who were surveyed have shown interest in shopping for green products. “Livestreaming adds a strong emotional connection to online shopping, which can help to bridge the gap between the online and offline shopping experience.” SINGAPORE BUSINESS REVIEW | DECEMBER 2021
35
