Is The Future of eCommerce In Asia?
Jeremy Katzon 13 September, 2015 at 10:09
The final day of Spikes Asia saw snack food giant Mondelēz International take a leading role in bringing insight and inspiration to the weary delegates by sponsoring five sessions. Topics ranged from talent development to the coming globalization of Asian products, from building a mobile-first mentality to programmatic buying.
At the heart of all this, of course, is the basic transaction powering the whole ecosystem: the purchase by a customer of a product and service. And so it is fitting that Ganesh Kashyap, Director of eCommerce in China for Mondelēz joined Andrea Baronchelli, CMO of Lazada Singapore to explore the fastest growing segment of retail: eCommerce.
E-tailing in some categories is already approaching maturity, but in packaged goods, the growth is just starting to take off. Most of that growth is driven by Asia due to four major trends:
eCommerce driver 1—Increasing mobile and internet penetration. Asia is already a mobile and digital society, but web access is starting to head toward 50% in major markets like China. There is simply a large and growing market for eCommerce.
eCommerce driver 2—Urbanization and longer working hours. As has happened elsewhere in the world, changing living and working habits have forever altered the idea of a traditional meal and a traditional shopping trip.
eCommerce driver 3—Wealth distribution. According to Kashyap of Mondelēz, two-thirds of the global middle class resides in China. This large and growing middle class has aspirations for higher quality, branded products.
eCommerce driver 4—Health and wellness concerns. While health and wellness are frequently assumed to be domestic market issues, there is a strong concern about these matters in Asia, and sales of higher quality consumable products will grow as a result. When you combine that with the growing middle class, it presents a great opportunity for eCommerce for packaged goods such as those Mondelēz sells, Kashyap believes.
Trends alone don’t make a market. Individual businesses have to adapt to supplying consumers what they want. Kashyap and Baronchelli dove into that during the last half of their fascinating session. The key to satisfying the eCommerce customer is, as it is with so many things digital, customization and personalization. While that’s not possible in traditional retail, data sharing between FMCG companies like Mondelēz and e-tailers like Lazada means that marketers can develop detailed shopper profiles based on past purchase behavior, thus positively influencing consumer experiences.
One of those experiences is impulse buying. That’s an easy thing to facilitate in traditional retail—just put the right product with the right stimulus in the right place. Marketers are just now starting to figure out how to transfer that experience to eCommerce and to mobile in particular, especially in the mobile-first Asian market.
Mondelēz just partnered with Facebook to create a vehicle for mobile impulse purchasing. Social commerce is ripe for impulse purchases, and Mondelēz sees tremendous opportunity there. This isn’t a one-way street, heedlessly separating consumers from their yuan. Instead, impulse eCommerce can help consumers by being just the thing to tip your basket size over the free-shipping threshold. Personalization and customization means that your impulse buy will be something you do, in fact, want.
Building all of this out requires companies to work off of a new talent strategy, building an entrepreneurial ecommerce startup mentality within their global multinationals. This integration is, as Kashyap put it, “an opportunity and a challenge,” which is the same dichotomy offered by eCommerce in general.