The Southeast Asia market poses significant affiliate opportunities for brands, but only if they have a comprehensive understanding of the region.
eCommerce, social commerce, and mobile commerce (mCommerce) sales have experienced global growth, even during the economic downturn of COVID-19.
During Covid-19, the online retail industry has seen rapid growth, and according to Ben King, regional director at Google Singapore, countries like Singapore is well-positioned to drive this trend forward
For both new and established brands, these changes signal the necessity to rethink conventional eCommerce experiences and find new ways to inspire and connect with new customers online. This includes combining product databases from online retailers, understanding customers' online purchase behaviours, and recognising new business-to-consumer(B2C) opportunities.
B2C eCommerce Asia Market Growth in 2021
Unsurprisingly, the B2C eCommerce market in Asia grew significantly during the coronavirus pandemic. Due to a consumer behavioural shift towards online shopping, numerous eCommerce companies have generated substantial revenue since the start of the pandemic.
Several major players in the online market, such as Amazon, Pinduoduo, and Shopee, saw a high inflow of new consumers, significant sales increase, and an improved number of visits on their websites and shopping apps in the second half of 2020. This was prevalent across many products, from home appliances to health and beauty products and electronics.
Furthermore, many eCommerce platforms have improved their cross-border selling by introducing foreign companies on their platform.
Bricks-And-Mortar Takes a Hit Compared to Online Stores
In the South Asian region, store‑based sales fell and remained weak over the last year. The two-month ‘circuit breaker’, otherwise known as lockdown, in Singapore and Indonesia, has caused its retail sales to drop by around 18%, affecting its digital economy.
At the same time, Vietnam's efficient control of the pandemic has led to its outperformance in brick‑and‑mortar retail sales among other stores in the region. As a result, the sales were down by only less than 0.1% in 2020.
A Closer Look at the eCommerce Landscape
The value of South Asian eCommerce companies in the digital economy has expanded almost six times in the last four years. It also has seen exponential growth from US$9.5 billion to US$54.2 billion in 2016 and 2020, respectively.
With the rise of digital users and online buyers, the sector is set to rise at an annualised rate of 22% and reach US$146 billion by 2025.
According to eMarketer, the overall growth of the digital economy in the Asia-Pacific online commerce market is expected to grow significantly. The region accounts for the most significant digital buyer growth (8.6%) globally in 2020 (2). In terms of eCommerce growth, Southeast Asian countries recorded a significant increase in 2020 which includes the following countries:
The Philippines (25%)
Here are some of the opportunities for digital marketers in the Southeast Asian eCommerce market.
Trends Predicted for the Southeast Asian eCommerce Market
The rise of eCommerce platforms and social media platforms in South East Asia have resulted from a few key factors(1) such as:
- Greater access to mobile phones and connectivity
- The overall improved economic position of Southeast Asian consumers
- Evolving eCommerce platforms for enhanced user experiences
In the past six months, COVID-19 has forced many brick-and-mortar stores to close. This has impacted retail sales and caused both users and retailers to move online to buy and sell, respectively(2).
The Philippines and Malaysia are the top fastest-growing countries in eCommerce sales and are projected to grow by a further 20% at least(2).
M-commerce is growing quickly in emerging markets, which include several Southeast Asian regions. Thailand’s m-commerce sales accounted for 75.3% of all national eCommerce sales in 2020, and this figure stands at 64% in Indonesia.
By 2024, eMarketer estimates the Asia-Pacific region will produce over $4 trillion in eCommerce sales, at which point it will make up 65.9% of the global market. This growth presents many affiliate marketing opportunities for both publishers and advertisers. However, they must approach the Southeast Asian market correctly to succeed.
What Publishers and Advertisers Can Do to Thrive in the Southeast Asian Market
Source: Adapted from (OECD, 2019) Going Digital: Shaping Policies, Improving Lives, https://doi.org/10.1787/9789264312012-en
1. Localised and Cultural Content
Publishers and advertisers must recognise that Southeast Asian consumers are completely different from Western consumers(1). They must distinguish between the different cultures of Southeast Asia too. Each Southeast Asian country has its own language, customs, geographies, and cultural nuances.
Communicating in one region (even within the same country) may be perceived entirely differently in another. To ensure culturally appropriate messaging in Southeast Asian markets, advertisers should collaborate with local affiliate marketers.
Publishers who want to expand into Southeast Asian markets should consult local affiliates and affiliate platforms to become familiar with the local language, customs, and cultural nuances, as consumer differ culturally from country to country within the market.
To succeed in the eCommerce industry, brands and publishers need to address marketing localisation, technical elements, and understand consumer behaviour and patterns for purchasing online. From here, they can optimise these factors to fit the local languages and culture. Overlooking the cultural aspect weakens the quality of the customers’ experience.
2. Mobile Commerce is Key
With overall improved access across the Southeast Asian market to mobile phones, focusing on mobile commerce is highly recommended, as well as mobile attribution.
As communication technologies continue to progress, the internet is becoming increasingly faster and cheaper, meaning consumers will be using mobiles more widely to make purchases. eMarketer predicts that by 2022, 80.33% of all eCommerce in the Asia-Pacific region will be m-commerce.
Advertisers should collaborate with publishers whose content is optimised for mobile, and publishers should ensure they keep up with the latest mobile commerce trends to ensure they do not fall behind their competitors.
3. Focusing on Southeast Asia’s Key Platforms
Advertisers need to keep in mind that Southeast Asian markets operate differently not only culturally but also in terms of the product categories, services purchased, and prominent eCommerce platforms.
4. Opportunity for Affiliate Marketing
The upward trends of eCommerce, mobile, and social commerce in Southeast Asia are a fantastic opportunity for publishers and advertisers in affiliate marketing. By familiarising themselves with the individual Southeast Asian markets, publishers can successfully promote advertisers’ offers to local consumers.
Advertisers can also collaborate with local affiliates who have deeper insights into the local customs, languages, cultural holidays, and other essential factors.
5. OTT Advertising
According to the 'OTT is for Everyone APAC research' report by SpotX, the top three markets for OTT viewing were Singapore (91%), Australia (81%), and Indonesia (76%)
More than 400 million people now use OTT video streaming services across the Southeast Asia region, with Singapore leading the race. In addition, over 69% of video viewers in the area stream online videos at least once a week.
Due to COVID, many big spenders worldwide have been affected, and many advertisers are keen to try out over-the-top (OTT) advertising.
Keeping a performance-driven goal in mind, advertisers who have been spending more on TV are ready to experiment and compare the metrics with OTT platforms. They are also all set to welcome new consumers.
6. The Rise of Programmatic Guaranteed Advertising
Programmatic guaranteed advertising has been shown to effectively replace the manual execution processes that are involved in brand campaigns. It brings the power of automation to direct reservations.
A recent study conducted by BCG, which includes 23 advertisers, agencies, and publishers from APAC, states the programmatic guaranteed process is more than 50% more efficient than traditional approaches for publishers. Moreover, it is 30% more efficient for advertisers and brand buying teams.
Publishers, advertisers, and agencies ahead of the curve understand the immense benefits that programmatic guaranteed advertising offers in the marketplace. However, its implementation requires a complete rethinking of organisational operations and systems.
Publishers can secure ad revenue via reservations, automatically update their forecasts, and automate billing and collections. It saves them time from regularly looking into issuing invoices and chasing payments.
The Southeast Asian eCommerce markets, particularly The Philippines and Malaysia, are growing exponentially. Factors such as better connectivity and access to mobile phones, improved economic standing and eCommerce platforms, and COVID-19 have all contributed to this growth.
As such, the Southeast Asian market presents significant opportunities for affiliate marketing, particularly in m-commerce, but cultural and market-specific factors are important factors that must be considered.
- Cultural Consumer Differences in Southeast Asia
- Global commerce 2020
- Digital 2019 Leading Online Retailers in Southeast Asia
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