Southeast Asia (SEA) has become one of the fastest digital consumer markets in the Asia Pacific. As observed by Bain & Company, 70 million people — equivalent to the entire population of the United Kingdom — have become digital consumers since the Covid-19 pandemic.
This regional growth outpaces that of India, China or even Brazil.
As with these cosmic shifts in the digital consumer space, we can’t ignore the changes that the pandemic has also brought. It has redefined the way consumers discover, shop and pay.
In fact, e-commerce now outranks gaming as one of the top online activities as e-commerce evolves to blend entertainment with shopping. Online channels now play a bigger role than offline channels in influencing a consumer’s journey to purchase.
As such, brand owners of social media platforms and e-commerce super apps cannot stand still. They would have to constantly innovate, stay nimble, and agile to adapt.
To keep up with these constant changes, we hear from three speakers in SWITCH 2021’s panel on November 9 on how they adapt their businesses to the ever-changing consumer landscape.
The six ‘R’s to navigate the new reality
Leading the panel discussion is Praneeth Yendamuri from Bain & Company. While the waters of the e-commerce scene are choppy and unpredictable, Praneeth puts forth that there are six Rs that businesses need to bear in mind for a smoother journey ahead:
- Rewrite a multi-year digital-first strategy – Businesses have to invest ahead of the required enablers and capabilities.
- Reimagine consumer engagement – To optimise commercial spending, businesses would need to mirror the omni-channel journey. This will give them the highest returns.
- Refresh the product offerings – Diversify your brand portfolio to meet polarising needs.
- Rethink sustainability as a revenue driver – Transform the supply chain of the business and embrace ESG (Environmental, Social and Governance) as a new normal.
- Realign how the consumers are going to spend their time in the future – Given the pandemic, businesses need to design offerings with an at-home focus.
- Rewire the business model – Businesses need to anticipate disruptions and form partnerships.
Catching-up with e-commerce
For a major brand like Coca-Cola that has enjoyed much offline success for 129 years, moving into the online world has proved challenging. However, it is a transition that Sam Way, Head of O2O Asean & South Pacific, values.
“We’re really humbled to say that we’re catching up. The reason why it’s critically important is it drives a different culture.”
This shift has inculcated a culture of continuous learning at Coca-Cola and bestowed important lessons of humility and empathy for Sam as a leader. To Sam, empathy is particularly important as they’re trying to disrupt a very successful model.
We’re trying to shift that, so every day, they’re having these conversations about disruption, change of investment and influence. And it’s tiring. It’s exhausting for those teams as well. So, as a leader, knowing the point of greatest workload, you actually need to motivate and really engage that team in a different way.– Sam Way, Head of O2O Asean & South Pacific, Coca-Cola
A dynamic team with soft skills
When it comes to building a team to be constantly innovating, building the right team is crucial. Sam asserts that soft skills will help drive the company forward.
That is not to say that hard skills have no value in the e-commerce space. He clarifies that there will always be a need for those kinds of skills, and they are approached very traditionally with in-classroom and cross-functional training.
However, there has been an increased focus on nurturing talent that possesses specific soft skills.
“As a business, our focus has been on the soft skills, as I mentioned earlier, disruptive thinking, innovation, and relentless pursuit of actually improving. That’s the stuff that we’ve been focused on,” he said.
As for advice to other business leaders, Sam has found that diversity is an edge that businesses should actively make use of, especially from his team.
Sam went on to cite some figures. His team is 70 per cent female, and half of them come from the ASEAN region, South Pacific, and some members from their global teams. To add to that, his team can speak over nine languages, where more than half are bilingual.
Sam attributes this diversity to one of the key reasons that help Coca-Cola stay ahead of the investment curve and build capability for roles that do not exist yet. A dynamic team well-equipped with soft skills is what is needed to be competitive in the current climate.
The role of social media in consumer behavior
While there has been an increase in the digital consumer for SEA, Dhruv Vohra, the Director of Global Business Group, Southeast Asia for Meta, believes that social media has an important role to play with regards to the consumer.
Dhruv points out that while 65 per cent of consumers have the spending power, they’re not exactly sure of what they want to buy and how to buy it. Therefore, social media plays an important role in hand-holding people through this journey of discovery commerce.
Additionally, consumers also prefer to make their purchases through online channels. As such, Dhruv believes that brands should leverage social media in helping consumers make these decisions.
“Think of social media not just from the perspective of lower-funnel metrics of conversions, but really holding consumers through discovery, evaluation, research, purchase, all through those things,” advised Dhruv.
He noted that consumers in Southeast Asia are very open to experimentation; they look at more than five to eight websites and apps before deciding what to buy.
Therefore, the aim of e-commerce businesses is to create loyalty and “sticky experiences” for people to spend as much time on the app and to have a seamless experience.
Dhruv also pointed out the increased consumption of short-form videos, the rise of gamification in shopping, and live shopping — all these help to create a “sticky experience” for consumers.
With this changeable behaviour of consumers in mind, this changes the online strategy for e-commerce businesses.
Even though these mega sales days and moments are really important, our research shows that 80 per cent of people actually change their most preferred brand in the last three months. So, you can’t plan just for a particular launch or a particular day.
What you need to do is have a whole year-long strategy where you’re capturing the interest of people where they are and when they are. As a result, we don’t see an online strategy as just for a particular season or a particular event as it used to be.– Dhruv Vohra, Director of Global Business Group, Southeast Asia from Meta
E-commerce businesses need to “adapt, access, accelerate”
After hearing so much about how consumers have changed how e-commerce businesses operate and adapt, Dr Santitar Sathirathai, the Group Chief Economist of Sea, offers some insight into e-commerce sellers.
Dr Santi categorises the transformation into three words: adapt, access, and accelerate. For Dr Santi, the word “adapt” is the best way to describe what he has seen in the region’s small and medium-sized enterprises (SMEs).
“SMEs have really used online tools such as e-commerce to adapt to the changing situation and social distancing. They use e-commerce to reach customers nationwide, even though there might be a period where the shop is offline or that they had to close down,” observed Dr Santi.
Another buzzword for the times, e-commerce has been especially helpful for SMEs to pivot and catch up to trends. Plus, these changes can be done easily and seamlessly on e-commerce platforms.
The accessibility of e-commerce platforms has allowed a massive influx of entrepreneurs as well. A study by the World Bank of Indonesia revealed that 25 per cent of the sellers on the platform are brand new sellers.
What is more interesting is that of this number, some of them are homemakers and majority of them are females.
“They use this opportunity to sort of work and take care of their families, at the same time run a business, earn extra income to support a family,” he explained.
Due to the influx of new sellers, it has accelerated the rate at which e-commerce platforms such as Shopee has to innovate.
“We have 25,000 brands on Shopee Mall, and we have to keep adding and innovating and also learn from the brands. We have added new services, such as allowing brands to have their own loyalty programs to generate more conversions and repeat purchases. So all these programs become ever more important.”
The role of policymakers to create a virtuous circle
Dr Santi also noted how this transformation in the e-commerce space is also due to policies and programs that further support the growth in the e-commerce space.
In Singapore, programs such as the e-commerce booster package from Enterprise Singapore has tremendously helped SMEs embark upon their digital journey.
“[It is a] promising development that is a good representation of private and public partnerships,” said Dr Santi, adding that it gives rise to the “digital flywheel effect”.
Once one party experiences the benefits of technology, they realise this path of digitalisation is actually worth pursuing.
“This is what investing, and this is what retraining for, and they will do more. And as they do more to see more benefits, they are more likely to go forward, and that creates a virtuous circle.”
On the other hand, those who are not digitalised are also not keen to try it — this is one of the main issues Dr Santi hopes to tackle at Shopee.
How do we get from that kind of stagnation state to the virtuous circle state? I think that’s where policy is really important, where it’s good to see a lot of governments putting effort into this so you can not people forward and get them into that digital flywheel.– Dr Santitar Sathirathai, the Group Chief Economist of Sea
Forecasting the future
Given the seismic shifts in e-commerce, the panel was asked to give their forecast for the years ahead.
Dhruv extrapolates from the current work environment, and declares that the future of work is a hybrid one where technology such as augmented reality and virtual reality play an important role.
This lends itself to the shopping experience as well, where conversational and social commerce will continue to grow.
“The underlying theme is AR (augmented reality) and VR (virtual reality), and how it applies to how we work, how we shop and how we live.”
Regarding consumer packaged goods and distribution, Sam sees the disruption coming from drones and driverless cars.
“If we are rethinking that we’re going to have thousands and millions of riders delivering to homes constantly moving forward, I think we’re mistaken,” opined Sam. In the end, consumers will win.
Dr Santi has observed a reverse migration of young people going back to their homes to teach the older generation how to use technology. In that way, digital literacy is further embraced, and that changes the digital consumer.
When we talk about digital consumers, typically in the past, we think about the youth, but now, it may not just be the youth. Actually, more generations [are] coming together.– Dr Santitar Sathirathai, the Group Chief Economist of Sea
Featured Image Credit: SWITCH 2021