How brands can seize opportunities in e-commerce in SEA amid pandemic recovery

While first introduced several years ago, 2021 was the year that social commerce spiked in popularity

Beyond continuous innovation and cross-channel engagement, it has become clear that brands have to prioritize authenticity when connecting with their consumers. Despite continuing popularity, e-commerce and social commerce platforms can no longer just rely on product offerings and pricing to win over customers warns Suki Lin, senior director for Asia Pacific at Nativex.

The pandemic has irrevocably altered the shopping behavior and spending patterns of consumers across the globe. South East Asia is no exception to the effects of the pandemic. However, despite the continuous uncertainty, this period has been more of a boon than a bane to the region’s e-commerce players.

Across the past 18 months, e-commerce adoption has accelerated dramatically as more turn to online platforms for all manner of necessities. E-commerce offers unparalleled convenience and accessibility, and popularity continues to climb through various means, including emerging innovations such as buy now, pay later (BNPL) solutions, and a greater variety of product categories available online.

The surge in the e-commerce industry is especially evident in South East Asia. As of 2021, over 75% of the region now has access to the internet, making South East Asia a region with one of the highest internet penetration rates. Not only are they digitally connected, but the pandemic has also seen 70 million new online shoppers in the region alone – a sign that more are turning to online platforms for a wider range of goods and services.

As 2022 unfolds, the e-commerce landscape will only continue to mature as consumer habits and preferences evolve. Brands cannot simply rely on tried-and-tested methods, but will have to be quick to respond to emerging trends to pull ahead of the competition. To do so, they will need to familiarize themselves with key trends – from expanding e-commerce options beyond traditional sectors to leveraging the rise of social commerce, and building meaningful and lasting relationships with their customers.

Online buys are not limited to traditional goods

As e-commerce matures, options are no longer limited to just traditional sectors and products such as fashion and beauty. Today, the landscape has expanded to encompass everyday necessities such as groceries and household items, with all manner of brands and businesses establishing online presences to support offline operations.

The e-commerce buzz has been complemented by the rise of ‘superapps,’ where users can access different products and services with just one app. With the ability to offer a seamless transaction experience, superapps offer a hassle-free process where consumers can make purchases for various products within the same app ecosystem.

If anything, the pandemic has accentuated the convenience of e-commerce and how any industry can tap on e-commerce to reach its customers. Post-pandemic, Facebook expects consumers to maintain their home-centric consumption patterns, from online shopping to ordering food delivery. Brands can look beyond traditional e-commerce sectors and give customers the option to shop across a variety of product categories online. By doing so, they can leverage their consumers’ expectations of the diversity of products and services that are sold online and enhance their reach on a multitude of platforms.

Social commerce will climb the online shopping ladder

While first introduced several years ago, 2021 was the year that social commerce spiked in popularity, with product orders made through social media doubling in the past year. In South East Asia, slightly over 40% of consumers shop on a social media platform once or twice a month. Social commerce has even surpassed brick-and-mortar outlets to become one of the most preferred shopping channels in the region – a testament to its popularity among consumers. The reason for this is clear – social commerce allows consumers to shop from the comfort of their own homes, and they can enjoy a frictionless process from product discovery to purchase.

To ride on this momentum, social media giants such as Facebook and Instagram have updated their interfaces with dedicated shopping functions. Emerging platforms such as TikTok have also made their foray – hashtags such as #TikTokMadeMeBuyIt have sprung up in recent months, where users purchase products that they have seen on their TikTok discovery page. With the hashtag generating over 1bn views, this trend is an exemplar of the power of social commerce in creating organic traction and engagement with social media users. Brands that had products go viral under this hashtag also witnessed an increase in sales revenue. TikTok most recently rolled out TikTok Shopping, which allows businesses to leverage TikTok as a commerce channel.

Social commerce is expected to gain further momentum and likely to be a key contributor to South East Asia’s digital economy growth to $300bn by 2025. In light of the immense potential the social commerce market holds, brands must not neglect working social commerce strategies into their retail plan so they can maximize avenues for direct sales and revenue generation.

Online shoppers will prioritize meaningful connections with brands

Beyond continuous innovation and cross-channel engagement, it has become clear that brands have to prioritize authenticity when connecting with their consumers. Despite continuing popularity, e-commerce and social commerce platforms can no longer just rely on product offerings and pricing to win over customers.

Individuals have become more discerning when it comes to brands, and customer-brand relationships have far surpassed the transactional. While consumers still look out for product quality and reasonable prices, they now value brand purpose more highly than ever and expect brands to maintain honest and transparent communications with them. For example, consumers are prioritizing sustainability, and expect the brands they interact with to share similar values. Over half of South East Asian consumers have switched from their regular brands in the last three months, citing experience and sustainability as key reasons. Even more remarkable is the fact that about 80% of consumers are willing to pay 10% more than the market price to support sustainable brands that have socially responsible initiatives.

Brands cannot just remain neutral when it comes to topics such as DEI (diversity, equity and inclusion) and environmental consciousness, but will need to take a stand and make concrete steps in line with the promises they make to their customers. In today’s age, brands have to be mindful of coming across as disingenuous and taking perfunctory actions, which will translate as insincere and superficial. Instead they will need to establish strong relationships with their customers by setting up open communication channels so they can promptly receive feedback and ensure that their customers are heard.

As post-pandemic recovery accelerates across the region, brands have to pay close attention to how they are leveraging opportunities present in the e-commerce market and beyond, and look past product pricing to truly connect with their customers. Their online retail strategy in the new year will have to be guided by these key trends so they can differentiate themselves and create genuine connections with their customers.

Suki Lin is senior director for Asia Pacific at Nativex.