On August 3, eCommerce giant Lazada released the findings of its first-ever Digital Commerce Confidence Index. This bi-annual survey maps out the perspective of eMerchants and sheds some light on the emerging eCommerce trends APAC is facing.
The survey looked at six markets—Indonesia, Thailand, Vietnam, Singapore, Malaysia, and the Philippines—in the first half of the year using a spectrum ranging from 0 to 100. Using 0 as “very pessimistic” and 100 as “very optimistic”, the Index helps determine the optimism of businesses involved in eCommerce in Southeast Asia towards their business growth.
Report shows ecommerce sales in the Asia-Pacific region set to nearly double by 2025
Ecommerce activity is as resilient and optimistic as ever
As 70% of the 750 online sellers in the Lazada eCommerce survey scored an average score of 64, most digital merchants remain resilient and optimistic in the future.
The electronics and fast-moving consumer goods (FMCG) segment appears to be the biggest beneficiary of the stay-at-home economy as they reported a 53% growth in the first half of the year.
According to Redseer partner Roshan Raj, the rollout of vaccination programs in the measured countries significantly affected the recovery of online fashion platforms. Not only that, but the easing of social restrictions that typically follow such programs would also boost sales and help the recovery of the industry.
With an incredible bounceback of almost 70% from Q1 to Q2, it is no wonder that the online fashion segment demonstrates the most optimism. More than 75% of fashion eSellers predict that their business will improve by more than 10% in Q3 of 2021. What’s more, 28% of that figure believe that more than 30% of growth is achievable in the same quarter.
The rise of ‘shoppertainment’ and change in consumer habits
Raj added that innovative engagement tools like live streams and TikTok could help drive sales in categories that require tactile review, as the fashion industry. Not only do they allow sellers to engage with customers more effectively, but they also give prospective buyers a better idea of the products they are selling.
This move to more interactive and engaging eCommerce is especially vital since competition among online sellers has evolved beyond the simplistic framework of price wars. With the advent of ‘shoppertainment’, buyers have come to expect entertainment, education, and inspiration before they buy anything. Because of this, eCommerce has to take on an additional dimension using technology that drives consumer engagement, as this could be a differentiating factor for many sellers.
According to the survey, a vital driver of the seller’s positive sentiment could also be resulting from significant shifts in the consumption habits of Southeast Asian consumers. People are adapting their spending habits and shopping methods as they now take their health and wellbeing more into account than before the pandemic struck.
Due to mobility restrictions, 47% of consumers reduced their offline purchases, and 30% increased their online spending in 2020. Not only that, but the website traffic of online shopping platforms have increased positively, with the largest increase from online department stores at 52% from the Q1 of 2020.
This move to eCommerce platforms shows an overall uptick in online shopping trends. The pandemic has accelerated its growth, making it a definitive battleground for sellers looking to scale up their businesses.
The study sheds light on challenges and opportunities in the future
The Digital Commerce Confidence Index also identified some challenges and opportunities that lie ahead.
One of the most significant issues that more than half of the online sellers face (52%) is to develop a unique and compelling offer that stands out from the competition. They also discovered that about 50% of the etailers surveyed found it imperative to increase organic traffic and to drive that traffic to online storefronts.
Perhaps most surprisingly, only 23% identified fully understanding performance data and analytics as a critical enabler to grow their online business faster. This stance is contrary to how SVP & APAC general manager at Talend, Stu Garrow, feels that the full integration of proper technology and data into the decision-making process can positively impact business growth.
The future of eCommerce post-COVID
As the region tries to find its way back to pre-pandemic levels of business, vaccinations will play a significant role. Unfortunately, according to Benjamin Cowling, a professor at The University of Hong Kong School of Public Health, many people continue to express hesitation over the vaccines, explaining why Southeast Asian vaccination rates lag behind Europe and the US.
Even with possible delays in getting the economy truly back on its feet, global market research company Euromonitor International estimates 2020 to 2025 to be the most significant years for sales and the changing eCommerce trends APAC is experiencing means the region could reach $2 trillion USD by 2025.
With the recent spike in infections, the future remains uncertain despite showing tremendous growth and optimism in the Lazada eCommerce survey. Still, one thing’s for sure—eCommerce in Southeast Asia will continue to evolve, as demonstrated by the resilience it has already shown.