By Ankiti Bose & Peerapol (Chain) Vayakornvichit, Zilingo
Ecommerce in Southeast Asia is undoubtedly a big opportunity. In particular, every retail start up with proof of concept is flocking to Indonesia, Thailand, and Singapore – your usual suspects. But as we have seen in the companies that have won in the internet economy, just having an idea and a fast-growing market to play in does not translate into winning the market. Facebook was not the first social network to have come into the fray, Instagram was not the first media-sharing platform, and Uber certainly was not the first cab booking/hailing company. What pushed these companies to the fore was their understanding of consumer behaviour (not necessarily consumer desire, since that a function of the status quo) as well as the supply chains, and their ability to translate that into a scalable product. Which begs the question: What is unique about customers and supply in Southeast Asia and how do we translate that in nitty gritty business details?
The ASEAN consumers: mobile-first, highly digital, hyper social, and incredibly fragmented
Perhaps you’ve heard the tagline before about ASEAN consumers – mobile, digital, social, fragmented. But let’s really think about what that means relative to the rest of the world.
- Mobile: Consumers spend more time on their mobile device, having skipped PCs and TVs for a more cost effective and engagement platform.
- Digital: This means that in 2013 and 2014, the most instragram-ed locations in the world were in Thailand, even though Thailand has a population of only ~70M compared to USA’s ~300M.
- Social: This means that Jakarta in Indonesia is the most active Twitter city in the world.
- Fragmented: This means that in Singapore no fewer than 12 e-commerce platforms serve the vast majority of the market, compared to the USA where Amazon owns the majority of the market.
So your average user in Southeast Asia is a really quite different from the average user in the US, China, or India. And no winning platform has been created just for them yet, with the product tweaked to all these nuances.
This distinct collection of traits plus variation between countries within ASEA means that companies have to rethink formula for consumer engagement constantly. The channel mix is very much still in flux with roughly equal split between B2C platforms, C2C platforms, and via social media. Within these channels, there are multiple players vying for the consumer’s mindspace. Consumers are demonstrating very little allegiance to retailing platforms because to them, stickiness has not been created yet.
Here’s where Zilingo comes in. We are a fashion and lifestyle marketplace that is really keen on rethinking customer engagement. We offer cross border orders where others are only offering domestic products. We have a full suite of payment options to remove friction in the buying process. In addition, it’s really about b
ecoming a fashion voice to us because that’s where we see ultimately stickiness of customers is created – show them elegantly crafted looks, give them a great buying experience and they’ll come back.
The supply base: SMEs in the market
The consumers are only half of the picture. Again, we want to be talking about what is distinct about this region’s retail market. In Southeast Asia, SMEs are a huge deal. A large number of retail products in your house are most likely unbranded. You may have picked up that corkscrew at a flea market, or that shirt from a stall down the road. There are all these famous markets such as Chatuchak, Bugis Street, or Pasar Baru. To truly tackle digital retail in Southeast Asia, we have to take as a base what customer are already to buying.
This is especially true in fashion. I usually ask people to do a simple thought experiment to bring the point home. Imagine gathering all the clothes and shoes owned in Indonesia in a football stadium and sorting them into international branded products and local unbranded products, you’re probably looking at 60%+ products in the latter category. That’s a really large chunk of the market.
With Zilingo, you can explore all of these longtail products online in a way never available before. We’re bringing the offline experience online in that sense, cutting out friction in the buying process and giving you a seamless experience.
You’ll hear more about us over the coming weeks. For now, come on over to https://zilingo.com/en-sg/ to see what’s up.
Stay tuned in the next few weeks when we sit down with Ankiti Bose, Co-Founder & CEO of Zilingo for a one on one interview to hear her thoughts on digital retailing and the Asian market.
Ankiti will be speaking at Retail World Indonesia on the subject of longtail retail in the digital age, this 16th to 17th November at the Pullman Central Park hotel in Jakarta. For an exclusive opportunity to meet and learn from fellow omnichannel retailers such as Ankiti, CLICK HERE to find out more.