It’s estimated that Internet penetration by 2020 will be 62% or 360 million users in Asia and Asia also has the added advantage of a younger population with a growing disposable income.
According to this article, Southeast Asians have some interesting habits when it comes to shopping online:
- they spend about 140 minutes on shopping online every month (a lot more compared to Americans)
- they shop during working hours except for Singaporeans who shop at night (10pm)
- mobile traffic is highest on weekends which means a lot of online browsing though seemingly the purchases are done more on weekdays
- Singaporeans buy more on average per shopping cart in terms of dollars compared to other Southeast Asian countries
- Bank transfer is the most popular form of payment (with some also using cash on delivery options in Vietnam and Indonesia)
What drives these online shopping habits? The 5 key factors contributing to e-commerce in Southeast Asia are:
- A rise of the middle class
- Greater mobile and internet penetration
- Supply of new e-commerce players
- An increase in logistics options (think Grab, Go-JEK, etc.)
- Alternative payment methods
The good news is that the ASEAN population is double the size of the United States, presenting a great opportunity to existing and upcoming e-commerce players to increase their market five times over in the next few years.
The Malaysian E-commerce Market
With its population size of 30 million and high internet penetration of 70%, Malaysia is in a position to become a viable e-commerce market.
On average, Malaysians spend around 5.5 hours on the internet every day with 78% who have shopped online, making those who have never shopped online a minority.
Interestingly enough, 33% of those who haven’t shopped online have asked someone else to do it for them.
A recent survey conducted by Shoppu, an e-marketplace by AEON (formerly known as Jusco) shows the top local categories as below. A huge percentage of shoppers online are women (out of the 3,700 respondents, 75% were female). The top categories were:
- Fashion & Accessories
- Home & Living
- Health & Beauty
- Consumer Electronics
- Mobiles & Tablets
Best Type of Promotions To Attract Shoppers
The survey also gave an insight into the promotion mechanics that worked best:
- Discount coupons
- Free shipping
- Loyalty Points Bonus/Redemption
- Flash Sales (e.g. Valid Today Only)
- Gift With Purchase
- *Online Instalment (payment)
- Purchase with Purchase
*Although online instalments are not a major incentive, the majority opted for it when purchasing gadgets and electronics.
If You’re An Existing Retailer, It’s Good News
If you already have a retail outlet, it’s much easier for you to get into e-commerce because you have these advantages:
- a better understanding of customers’ demands
- existing knowledge about your products
- established suppliers and partners
- physical outlet to support online marketing
- unlimited shelf space online
However, you still need to be prepared for storage or warehousing facilities and work with a reliable delivery partner.
Top Tips For E-commerce
If you are starting an e-commerce business on your own, here are some tips based on the experience we’ve had in developing e-commerce websites for our own clients:
1. Define your products and market carefully
What products are you selling now? Are they under your own brand or do they belong to another business? More importantly, why would a customer buy from you (online) versus buying from a marketplace like Lazada or Shopee. What makes you unique enough to stand out and withstand the competition? Is your group of target customers price-sensitive which means they’re always looking for the cheapest option? All these affect the kinds of products you will sell online as well as the online strategy that you will use.
2. Work with a trusted e-commerce website provider
Start looking at e-commerce websites that appeal to you and fit your brand vision. Find out who can help you design and develop your e-commerce website and able to advise you what you need (pre-setup is more important than the actual e-commerce setup). It’s important that your e-commerce website creates trust because without looking credible, no one will buy from you! Decide if you have someone in-house to help you update your products into the e-commerce website. Your own team will work closely with the e-commerce website designer because there will be a lot of technical details to decide and sort out.
3. Promote your website on social media and online marketplaces
Once your e-commerce website is up and running, it is time to promote it on the social media platforms and online marketplaces that matter. Always lead your customers back to your website because it’s the only way you can prevent your products from being compared side by side with others (usually this happens in an online marketplace). Use the online marketplace to get the eyeballs with selected products but get them onto your website for the full range.
4. Learn from successful online retailers
Read stories of how online retailers started. Use their success stories as motivation and inspiration. Ask people who are already running their online shops about their experiences and challenges. Having an e-commerce website isn’t the end; it is the beginning of your online selling! Selling online is just like selling offline. You need strategies and campaigns to get prospects to visit your online shop so this is where a strong marketing focus helps.
E-commerce in Asia is getting exciting as the infrastructure is catching up despite main obstacles like poor Internet connection in certain areas and some sections of the public who are still reluctant to shop online.
Despite it all, if you’re not going online with your retail, you’re missing out on a huge piece of the e-commerce pie!
Want more? Get our free Ecommerce Guide to help you get started successfully online.