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How e-businesses thrive with consumer analytics
Innovation

How e-businesses thrive with consumer analytics

18 Feb 2016

Greater affluence and growing Internet use in Southeast Asia is fuelling the region’s e-commerce sector. But the space is becoming more competitive and companies are turning to consumer analytics to drive their decisions and get ahead.

 

Regionally, 38 percent of web traffic now comes from mobile devices. In Singapore, the figure is around 55 percent – and can go up to 90 percent during peak hours. Countries such as Singapore, Malaysia and Thailand have shown promise on the Digital Evolution Index – a measure of the factors that affect a country’s ability to move into a digital economy – signalling an even brighter future for e-commerce.

 

But for businesses looking to enter the e-commerce market, there is no one-size-fits-all template to follow. Rather, they need to chart their own path using consumer analytics, said Yvonne Lim, Director, eCommerce Enterprise Solutions, Singpost. She has helped brands such as Muji, Adidas and Toshiba break into the e-commerce sphere.

 

At the most basic level, Lim said companies must offer their customers free delivery, free returns and provide estimated delivery timelines for their orders.

 

But beyond that, she stressed the need for consumer insights for businesses to better understand the markets they want to enter. Decisions on what social media marketing channels to use and countries to enter should be measured with clear indicators such as customer acquisition costs and the profit margin of each order.

 

Lim cautioned that e-commerce growth across Southeast Asia would not be homogenous. While one might expect capital cities to have the largest number of consumers, it is the second- or third-tier cities that experience the greatest demand, largely because of the poorer access to products.

 

She cited Triumph and Hijab2go as brands that have successfully used consumer insights to create unanticipated business opportunities. Triumph’s consumer research helped the company predict that consumers visiting their Singapore online store would not be local, but rather, Chinese from Western countries. While Hijab2go found that the largest growth in their consumer base would be from the United States.

 

Parin Songpracha, head of Thailand’s E-commerce Association, added that simple responses to specific types of consumer behaviour could go a long way in boosting sales. Drawing on his experience launching convenience store chain 7-11’s e-commerce business, Songpracha found that simple measures like sending payment reminders increased sales by three percent.

 

Although the chain’s core business is in its brick-and-mortar stores, Songpracha said that having an online presence was crucial in driving traffic to physical stores. Part of his e-commerce strategy was to allow customers to collect their online purchases, which include non-perishable items such as make-up, from the retail outlets, and he found that 60 percent of those customers would go on to purchase additional items as well.

 

Despite 7-11’s success in the e-commerce sphere, Songpracha said that ultimately, the online store would only comprise part of the customer’s full experience – the majority of it would still be from the offline retail experience.

 

If the stores mess up, he said: “It doesn’t matter how good your website is, or how good the promotion is.”

 

Editor’s note: Yvonne Lim and Parin Songpracha spoke at IE Singapore’s “Expand Overseas with E-Commerce” event.