Ogilvy released a new report highlighting how brands need a digital direct-to-consumer strategy to overcome the Covid disruption and lead the market in the future.
Digital commerce is on the rise, according to the report, yet online shopping has taken a slower pace in Southeast Asia compared to markets like China. Brands in Southeast Asia should expect a far-reaching effect of changing habits with far-reaching implications for all sales channels.
Online shopping marketplaces like Shopee and Lazada are driving the penetration of digital commerce and leading online customer experience trends in the region. The dependence on marketplaces for the strategy of digital trade will go hand in hand with rising costs and the loss of ownership of an increasingly valuable asset: customer data.
The report argues that direct-to-consumer provides the ability to quickly adapt to changing customer expectations and deliver unique experiences that set brands apart. Not only do you maintain ownership of invaluable customer data, but you also drive innovation and personalize offers based on data-driven insights.
Over the past year, the pandemic has significantly increased the adoption of digital commerce and related digital services in Southeast Asia. Internet penetration, digital payments, and consumer confidence in digital commerce have all increased significantly in 2020. The region’s online industry will triple to $ 309 billion in gross merchandise value by 2025.
“In Southeast Asia, social media penetration will range from around 60% in Indonesia to 90% in Malaysia by early 2021,” said Tim Till, vice president of Presales Consulting-Technology at Ogilvy.
“Referral-based trading with influencers can increase when payments to these influencers are mature. A growing consumer base, including individuals without a bank account, will increasingly be able to shop online as individuals and businesses can receive payments and pay using new and evolving methods such as cryptocurrency, Buy It Now, and e-wallets. “
According to Waheed Bidiwale, global vice president of Verticurl, Ogilvy’s delivery and operations center, the trend towards digital commerce will eventually accelerate from lifestyle to the full range of product and service categories.
“Before Covid, not many thought of buying toilet paper online,” Bidiwale said. “Brands that think ‘I’m in a commodities business, or I’m in the impulse buying category, or nobody is buying a car online, so I don’t need digital commerce’ need to rethink their strategies.”
The Ogilvy report argues that the benefits of marketplaces as a long-term option will not be sustainable and eventually there will be associated costs like buying advertisements to generate traffic to the website.