Shopee exec explains how mobile-first platforms are helping businesses in Southeast Asia optimize

TERENCE PANG   Shopee
Terence Pang, chief commercial officer at Shopee

Southeast Asia (SEA) has seen rapid development in the past decade, as countries become more urbanized, populations more connected and affluent, and technology more advanced. The region is set to be one of the largest and fastest-growing economies over the next few years, with the digital economy accelerating this growth.

One area that has gone from strength to strength is e-commerce. It currently accounts for less than 5% of total retail in SEA but is growing faster than developed markets like China and the US. With rising connectivity, a young population, and a widening middle class, the industry has plenty of headroom for growth.

So it is not surprising that more businesses are going online to capture a slice of this growth. But in a highly diverse and digital-first region, many brands may find it difficult to establish and grow their online presence. Instead of going at it alone, brands should leverage the ecosystems and reach of platforms, so they can focus on the things that matter- growing their business.

Platforms offer a gateway to mobile consumers

The digital revolution in SEA is just beginning and mobile is at the heart, where the majority access the internet mainly via mobile devices. The global pandemic further accelerated mobile digital adoption and consumption. Google estimates that 1 in 3 digital service consumers in SEA are new as e-commerce, food deliveries, and other online services become essential, and 94% plan to stick to these habits even after the pandemic.

A key demand driver is convenience. There is an app for almost everything in SEA and consumers want to shop and access essential services with a few taps of the smartphone. For retail, consumer traffic is flowing to platforms as people can now buy everything they need from luxury products to electronics to groceries all in one app. For them, platforms are a means to “window shop” virtually at any time, as they compare products at scale and shop for all their needs at one destination. In short, convenience is fast becoming the norm.

SEA consumers are also amongst the most engaged in the world, spending more time on mobile than anywhere else, with most on social media apps. For brands to connect and build loyalty with customers means to continually engage them with exciting mobile experiences.

For example, POND’S launched its AI-powered chatbot on Shopee to give users real-time skincare analysis and recommendations, resulting in two times better conversions. Similarly, L’Oreal launched an immersive AI and AR-powered digital experience and complemented the experience with livestreams and mini games, all within the Shopee app, to deepen engagement with consumers for a more personalized online retail experience.

This seamless mobile experience allows brands to focus on finding innovative ways to engage their customers while also enabling higher sales conversions through its integrated ecosystem, which allows one-stop convenience from discovery to delivery.

Brands can hyper-localize at scale with platforms

Though often seen as a bloc, SEA is one of the most diverse regions in the world with a rich mosaic of cultures, languages, ethnicities, beliefs, and nationalities. In Indonesia alone, census data shows that over 800 native languages are spoken in the country.

Countries are also different when it comes to economic conditions. On one hand, Singapore is a relatively affluent and urban city, while countries like Thailand, Indonesia, Vietnam, and the Philippines are still developing with larger rural populations.

This means that brands cannot take a one-size-fits-all approach in developing their digital ecosystems. The vast majority of consumers are more likely to shop with brands that offer personally relevant recommendations, but scaling these efforts can be difficult and costly.

Through the right platforms, brands can now do so easily. The most successful platforms take a hyper local approach, regardless of market, to ensure that everything from the app design to product selection to payment methods are tailored to local audiences. This not only helps to build trust, but also allows brands to more effectively target specific audiences. By analysing the behaviors of millions of users daily, such platforms can also identify consumer insights and trends that allow brands to optimize their marketing or make it more efficient to test a new product or grow a specific segment.

Beyond data and tools, platforms also provide experienced teams that add value to key but often “hidden” aspects of e-commerce such as partnerships or customer service, that are vital to a brand’s relationship with its customers. This allows brands to offer a complete end-to-end experience even if they lack resources or expertise.

Infrastructure support helps brands to connect the dots

SEA’s geography and demography present unique infrastructural challenges to e-commerce. In many countries, fragmented geographies impact delivery reach and timeliness. Countries like Indonesia and the Philippines comprise thousands of islands, stretching delivery times and making it more costly to buy and sell online. Outside of big cities, road and logistics networks are also underdeveloped, further slowing delivery efficiency. But infrastructure is catching up and new solutions are emerging to address the region’s unique needs.

This is both a challenge and opportunity for brands going digital. Consumers in non-metro and rural areas formed the bulk of the region’s new digital consumers in 2020 and will drive e-commerce demand in the future. Shopee observed similar trends in the year-end shopping season, with shopping activity growing significantly in places like West Java in Indonesia and Nonthaburi in Thailand. Brands that can reliably reach and meet the needs of rural shoppers will have an edge.

Fortunately, there is a wave of logistics support emerging to fill delivery gaps from first to last mile, including parcel dropoff services that connect businesses to logistics providers who can ship swiftly and reliably. The key for businesses is again to work with local partners who know the lay of the land and have the right infrastructure to help them achieve the right mix of reliability, speed, and reach. For example, by partnering with local logistics partners throughout SEA, Shopee has cut delivery lead times in East Malaysia in half and can ensure nationwide deliveries in Singapore, Thailand, Indonesia, and the Philippines.

There is a sea of opportunity for online retail but businesses do not have to swim alone. To do more and go further, it is important to team up with the right platforms and partners. I for one am excited to see where we can go together in the future.

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Here’s how the CEO of the ‘Airbnb of shops’ accelerated his business in the pandemic despite losing thousands of bookings and getting COVID-19

Ross Bailey of Appear Here attends NY-LON Tech Challenge at Emigrant Savings Bank on February 11, 2015 in New York City.
Ross Bailey of Appear Here attends NY-LON Tech Challenge at Emigrant Savings Bank on February 11, 2015 in New York City.

When COVID-19s forced high-streets and stores to shut and governments ordered people to stay at home, everyone turned to online shopping. E-commerce became the go-to option.

This meant business models, such as Appear Here, which relied on high-streets to be open, hit a brick wall. 

“You go into war mode,” said Ross Bailey, CEO of Appear Here, which lets businesses rent shops and temporary pop-up areas in major global citie – or as he dubbed it, “Airbnb for shops.” 

Since launching in 2013, the London startup has expanded to major world cities including Paris, New York and Miami, and has four offices globally.

Bailey said that January and February 2020 were the best first months of a year the company ever had. But when the pandemic struck in March, everything came to a standstill. 

“Within four to five days we had shut down every single city and we were all remote,” Bailey told Insider from his office in Clerkenwell, London. The company went from thousands of bookings to none, he said.

He then got infected with COVID-19 and was unwell for six weeks. During this time, he said he was having to make tough decisions because he was “suddenly running an illegal business.”

“My brain was all over the place and I was exhausted,” he said.

In an effort to keep his team of more than 100 employees in the loop, Bailey wrote a weekly memo to them about what was happening in the world and Appear Here’s role within that. He said employees weren’t just looking to him for business advice, but also reassurance that the company would survive.

“Your job as a CEO is to give certainty and direction,” Bailey said. “But we didn’t know anything more than anyone else.”

During the lockdowns, the company offered refunds to its customers who had booked a lease in advance. It focused on its brand and hosted virtual events for people who had lost their job or had to close their store to provide inspiration. Most recently, it launched the “Save The Streets” campaign, calling on the UK government to incentivize shopping and provide to support to struggling independent retailers.

The company also questioned whether it should be coming up with a fresh business angle. 

But when the first lockdown in the UK eased and places started to reopen again, Appear Here had a surge in bookings and saw how instantly people wanted to go back into stores. Bailey believes that although we’ve been kept away from others for so long, humans are social creatures and will want to get back out into the physical world, instead of stay in the digital one.

“COVID has really just accelerated what was inevitable,” he said, adding that there’s now a window of opportunity to reset and rebuild the retail industry. Big UK brands, including Debenhams and Topshop owner Arcadia, have suffered even before the pandemic due to long-term lease obligations and so “the new world is going to be more relevant for Appear Here than the old one,” according to Bailey.

Appear Here leases allow businesses to pay monthly so they’re not stuck in years-long contracts. A lot of the brands were safe because they were paying monthly and they didn’t have lease obligations. “It just reiterated that this model makes sense,” Bailey said.

The company started seeing bakers, butchers, fishmonge,rs and cafes use its platform and expand during lockdown. Little neighborhoods around the peripheries of cities were getting more demand than ever before, Bailey said.

Appear Here was founded in 2012 when Bailey and his friend opened a temporary shop in London selling limited-edition Queen Elizabeth merchandise. He realized from talking with customers that other people wanted to rent short-term space too. Bailey put his share of the profit from his shop into launching Appear Here.

Nine years down the line, more than 250,000 brands have found short-term spaces through the startup.

Out of all the cities Appear Here operates in, Paris has had the most bookings since the start of the pandemic as people began to return to the office in the summer. London has been slower but since August the businesses in the neighborhoods were doubling sales from 2019, according to Bailey. He also said that those businesses in Miami are doing better than ever before.

With double the sales, lower rents and more flexible leases, “there’s going to be a renaissance of our streets,” he said.

Although Bailey thinks that the COVID-19 pandemic will leave some lasting changes, he remains positive about the future of the high-street. “It wasn’t natural, it didn’t happen overnight,” he said. “But I’m optimistic.”

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The pandemic could make lines at stores ‘totally unacceptable,’ says Qudini CEO Imogen Wethered

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The pandemic may spell the end of lines at stores, Imogen Wethered, founder and CEO of Qudini, said at a retail roundtable hosted by Insider.

“Retailers are going to have to work harder to implement new processes and digital ways of managing customers,” Wethered said. “For us, hopefully, that means queues will be totally unacceptable, and digital ordering will be everywhere as well as in-store appointments. You’ll be seeing contactless, curbside pick-up as well as virtual appointments.”

Wethered said that retailers were “losing their way” before the pandemic, often focusing on cutting costs instead of serving customers’ needs. However, the pandemic has proved that approach untenable. Safety concerns are now at the forefront of customers’ decision making, and people are also unlikely to give up the conveniences they’ve gained during the pandemic.

One such convenience is the rise of the curbside pickup order. Wethered said she’s heard from retailers who want customers to come back into stores after the pandemic. But that’s not necessarily what customers want.

“Customers are more likely to work with the brand if it offers curbside pickup,” Wethered said.” So is that kind of incremental sale going to be worth less or more than the customer actually returning?”

Instead of focusing on how to entice customers back to stores, brands should focus on engaging them digitally. Wethered points to the results of an April 2020 survey, in which Qudini asked 2,000 consumers about what they wanted from their brands regarding virtual appointments.

“It was pretty clear that millennial and Gen Z customers were three times more likely to want to engage with a brand virtually,” Wethered said. “It appears that customers would have wanted to interact with brands virtually from the comfort of their home or office all along.”

Buck Jordan, the CEO of Wavemaker Labs and another participant in the roundtable, said that food retailers will similarly need to provide customers with higher ease of access. Virtual brands and automation via robots would enable delivery and pickup systems to operate at unprecedented levels of efficiency. Even after the coronavirus, Jordan anticipates high levels of demand for off-premise consumption.

“Don’t be surprised if you continue to see more virtual brands and more robot made meals,” Jordan said. “I think 2020 is the year when restaurants woke up and said, we can’t operate the way we’ve been operating. We need to think differently if we’re going to get to the point of efficiency and profit again.”

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Shopify exec: Omnichannel commerce is the new norm for the retail sector

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A wall at the entrance display vendor merchandise. Shopify has become Canada’s tech darling by defying conventional norms and reinventing ways of doing business. This is a profile of the company built on entrepreneurship. November 4, 2015.

The COVID-19 pandemic is the biggest threat to modern commerce that retailers have seen, and likely will see, in their lifetime. It’s meant that the future of commerce has been pulled forward, and we’ve seen 10 years of innovation happen in the last 10 months alone. Retailers have had to sharply pivot their strategies in order to meet consumers’ changing behaviors, and it’s become clear there’s no value in an “offline versus online” mentality: omnichannel commerce is the new norm. But what does that mean for historically brick and mortar retailers, and what will retail look like beyond COVID-19? The inaugural Future of Commerce report from Shopify highlights data-driven predictions that showcase the opportunity ahead for physical retailers.

Proximity will be a powerful and profitable selling feature for retailers

As consumer desire grows for alternative pickup and delivery options, proximity has the potential to become a retailer’s most powerful selling feature. By the end of April, 26% of Shopify’s brick-and-mortar merchants in English-speaking geographies were using some form of local pick-up or delivery solution, compared to 2% at the end of February. And there’s a clear business impact: On average, from May to August 2020, online shoppers spent 23% more when choosing local pickup or delivery, and had a 25% bigger cart size. With a 13% and 19% higher conversion rate for shoppers who choose local pick-up or delivery, respectively, as opposed to traditional shipping, merchants should continue to tap into their local communities online.

Conversational commerce will drive sales and genuine connection with customers

In a time when in-person conversations are no longer the norm, chat has increasingly become a retailer’s most successful method of replicating the offline experience online. Traditionally used for customer support, the pandemic has heightened the importance of chat as a marketing and sales channel, and we believe this will continue in 2021 as new consumer behavior solidifies. That outlook is confirmed by Shopify’s own data: from March 16 to July 1, at the height of the COVID-19 lockdown, there was an 72% increase in conversations happening on Shopify Ping, our business conversation hub, between merchants and customers. And those one-to-one conversations were proving effective in increasing sales: shoppers who chatted with a merchant online were 70% more likely to convert and sales attributed to chat interactions increasing by 185%.

The in-store experience will continue to evolve

Consumer behavior has, and will continue to, change as we head into 2021 and new norms around shopping in-store are developed. Resilient retailers are looking to technology to meet customer needs. We know that 62% of consumers are more comfortable making in-store purchases with digital or contactless payments, and compared to the same period in 2019, the number of shops offering contactless payments on Shopify increased by 122% during the pandemic. Given that 50% of consumers would prefer to schedule appointments for in-store shopping, retailers will need to continue considering the creative ways to tailor the in-store experience.

Social commerce will become a more expected and necessary tool for retailers to thrive

Building a brand requires a presence in multiple channels. Social commerce-marketing and selling products on social platforms using content that feels authentic to the user experience-has become a must for retailers. It allows brands to engage with their customers while enabling authentic connection. Based on Shopify’s recent research, we know that three quarters of our merchants plan to sell through some type of social media for the 2020 holiday season, and that younger shoppers are significantly more likely to say that they’re going to shop via mobile phone (54% among 18 to 34-year-olds, 39% among 35 to 54-year-olds, and just 9% among 55+). TikTok, Facebook, Instagram and Pinterest are just some of the channels that enable merchants to reach new audiences.

It’s clear that it’s no longer feasible to consider commerce as operating in one arena or the other. For retailers to endure and meet shifting consumer behavior, they must engage with their customers wherever they are. Consumers want to shop independent, and businesses must adapt to make that easier. It’s undeniable that retailers have shown great resilience during a difficult time for the industry-adopting an omnichannel strategy will allow them to continue to future-proof their businesses, and their livelihoods.

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