E-Commerce: Southeast Asian Style

Whether you work on the agency side or the client side, it’s almost a given that at some point in the very near future, you are going to be given the rather vague instruction: “Make it work for e-commerce, we must have e-commerce.”

The likelihood is, somebody, somewhere, sitting at a boardroom table, is pushing this button, without having a clue as to the panic and confusion they are spreading through the marketing ranks of the organization.

We’ve all seen the headlines about booming e-commerce figures out of Europe and the U.S., we all know about Amazon, eBay, and Ocado – slick, quick, click sites that will help you max out your credit card in a few frenzied “mouse” minutes. But these companies all operate from countries with excellent support infrastructures, where goods are guaranteed to arrive undamaged, and in 24 hours, and credit cards are almost thrust upon consumers the minute they reach a supposedly legally responsible age.

The story is not so simple in Southeast Asia. In countries such as Thailand, there are huge cultural and infrastructure difficulties to overcome before e-commerce, “Western” style, really takes off.

Credit card penetration is not as high as in the West, and trust levels in online payments are also lower. But that shouldn’t stop you taking up that boardroom e-commerce challenge.

Here are some phased solutions worth considering:

• Retailer Partnership – few brands or even multi-nationals, have their own route direct to the consumer. There’s a good economic reason for that. So look for retailers who already have a toe in the e-commerce pool, and who have the infrastructure (website and delivery logistics).
• Strike a deal to get your products/brands prioritized in the search function of the site, this can be adjusted within most systems.
• Offer extra incentives to consumers when your brand is purchased. An easy way is to utilize the existing retailer loyalty points program to give extra points.
• Look at a deeper retailer integration, where the retailer shares the e-transaction data. This could allow manufacturers of multiple products and brands to start an e-commerce points reward scheme of their own, and of course gives greater flexibility for reward and redemption. This would of course require a consumer opt in.

M-Commerce

Look into m-commerce. Platforms like Line offer limited, categorized, push product options, payable by credit card. Although the user experience on a mobile is not great, and unless the there is a huge price incentive, repeat visits are likely to be limited.

There are some big challenges in Southeast Asia in terms of payment methods, but as always in this part of the world, where there’s a will, there’s a way.

Alternative e-commerce models and routes to market are available, mixing old and new methodologies together. For example good, old fashioned payment-on-delivery (POD) and cash-on-delivery (COD) are still very much in use in Thailand, where online retailers such as Lazada deliver goods to your door with a courier collecting a cash payment.

You can also pay by bank transfer, emailing your transaction code to the retailer, and even paying at the ever present 7-Eleven.

It’s not slick and integrated, but it works.

Lastly, and very importantly, a key consideration that marketers should not overlook, is the potential damage to brand equity. Many of the popular e-commerce sites in Southeast Asia, are less than attractive, and seem to rely heavily on price dumping deals. At what point does this actually damage a brand in the eyes of a consumer?

So when that vague e-commerce challenge or KPI lands on your desk, don’t shy away from it. Consider all the options, and make a business case to start the ball rolling. Oh, and then apply for the newly created post of head of e-commerce.