How Shopee is helping these businesses scale in Southeast Asia’s competitive online space

In Southeast Asia’s increasingly saturated and crowded online marketplace, finding growth is hard – even for established businesses with a large base of returning consumers.

That’s one problem that tech giant Sea is continually looking to fix, and it knows a thing or two about how to do it. In 2020, the company’s ecommerce arm Shopee was the most-visited online shopping platform in Southeast Asia. But with over 14 million merchants on its platform, is there a formula for businesses to stand out while successfully scaling their ecommerce presence?

Emre Olcer, vice president and ASEAN managing director at Kimberly-Clark / Photo credit: Kimberly-Clark

According to Emre Olcer, vice president and ASEAN managing director at fast-moving consumer goods (FMCG) business Kimberly-Clark, capturing the region’s 400 million online users starts with understanding user behavior or how consumers shop.

“We’ve found that shoppers in this region are more likely to try new products and spend more time engaging with brands on [their] mobile [devices] than their global counterparts,” Olcer observes.

The hyperlocal approach

Mobile users indeed dominate Southeast Asia’s ecommerce marketplaces. Last year, around 40 million people across the region came online for the first time. For countries such as Thailand and Indonesia, a majority of online activity took place via mobile, with services such as grocery shopping and e-wallets growing in demand.

“The year 2020 highlighted the importance of hyperlocalization,” says Zhou Junjie, chief commercial officer at Shopee.

For instance, to reach a wider audience in Indonesia, Vietnam, and the Philippines, Shopee worked with its local teams to run TV shows – a more traditional medium – that reflected local pop culture tastes. These shows were synced with in-app activities to boost traffic for the ecommerce marketplace’s brand partners, as well as engage shoppers from their homes.

Zhou Junjie, chief commercial officer at Shopee / Photo credit: Shopee

“Every market in Southeast Asia faced the pandemic, but end consumers reacted differently,” Zhou adds. “So we focused on working with our brand partners to understand and capture the differences in the changing behavior and preferences of consumers through our strong local teams and data systems.”

Kimberly-Clark – whose mainstay products include Kleenex, Huggies, and Kotex – runs an official store on Shopee Mall, which features an extensive selection of authentic products from international and local brands and retailers. The FMCG firm sharpened its focus by adopting a hyperlocal strategy amid the pandemic, which involved working closely with Shopee to rethink its own strategies in certain markets and listening to feedback and reviews from its consumers in the region. Among these customers were those who had previously shopped for its products in physical stores such as supermarkets.

“Last year, we engaged in a strategic planning workshop with Shopee to disrupt the Malaysian market,” shares Olcer. These discussions helped the team narrow down an assortment of diaper products best suited for the local market. In February 2020, Kimberly-Clark also participated in Shopee’s inaugural Super Brand Day, an initiative by the ecommerce firm that features one selected brand per day to attract different shopper profiles. The move worked: Kimberly-Clark achieved 36x growth in sales.

Photo credit: Shopee

Developing these types of customized marketing and business strategies, which allows companies to gain a deeper understanding of what appeals to consumers in different markets, is something that players across all sectors should be looking into.

Southeast Asia internet major Xiaomi, for example, takes its strategy on personalization and localization a step further by changing its approach depending on how different shoppers react to varying offers.

“Most Southeast Asian consumers are price-sensitive,” observes Kah Mun Leong, general manager for Southeast Asia at Xiaomi. “Users in countries like Singapore, Malaysia, Thailand, Vietnam, and the Philippines are digitally savvy, especially the youth, and they know value when they see it.”

As such, during one of the company’s major campaigns on Shopee last year, it decided to offer brand vouchers, which it found was effective in driving conversions across most markets in the region, while using time-sensitive mechanics such as “Beat the Clock” performed particularly well in Thailand and Singapore.

As scores of brands clamor for growth, another area that companies could also tap into to strengthen their hyperlocal approach is livestreaming.

The engagement tool has strong potential in the region and could encourage sales conversions, suggests Muksitul Islam, ASEAN ecommerce director at FMCG giant Reckitt, whose portfolio of brands includes Enfa, Dettol, and Durex. For this reason, the firm is collaborating with Shopee to enhance its livestreaming capabilities.

Indeed, the trend has shown great momentum thanks to its accessibility and ability to engage with shoppers more directly. Last year, conversations surrounding livestreaming grew some 1,890x. In Singapore alone, Shopee saw its livestreaming platform, Shopee Live, attract a 40x increase in livestreams from brands and sellers in the country.

Building trust

While it may appear that established businesses have less work cut out for them in achieving growth, Kimberly-Clark’s Olcer emphasizes that healthy sales numbers can only be achieved through the ongoing process of building consumer trust.

”For Southeast Asian shoppers, having trust in a brand is an important factor before making an online purchase,” says Islam. “[Reckitt itself] is a custodian to some of the world’s most-trusted hygiene, health, and nutrition brands, and this trust inspires us to remain constantly vigilant about the authenticity of our products,” he says.

Muksitul Islam, ASEAN ecommerce director at Reckitt / Photo credit: Reckitt

With millions of new users coming online last year, most of whom were unfamiliar with navigating ecommerce platforms, a key area that Reckitt looked at was examining the top barriers to sales conversions. The company found, for instance, that many buyers were wary of expiry dates, authenticity, and damaged products when buying milk formula online.

To address this, it participated in the Shopee Milk Guarantee program this year, which certifies that a product is authentic and is at least six months from its expiry date.

The initiative didn’t just give Reckitt a better understanding of how to capture its target demographic; it also built consumer trust in the brand and its products, driving more traffic to its official store on Shopee Mall. Case in point: Reckitt’s milk powder brand, Enfa, consistently ranked among the top three brands in the infant milk formula category at Shopee’s mega campaigns last year.

Maintaining customer loyalty

Another challenge for businesses comes in the form of customer retention, which ties in with good customer experience.

In order to keep consumers coming back, companies should rethink their suite of engagement tools from time to time – whether by honing in on trends such as livestreaming or boosting customer interaction through incentives like Shopee prizes.

One reason why this is so important is the ability to rein in returns on investment – according to inbound marketing and sales platform Hubspot, even a 5% increase in customer retention can bring a company additional revenue of between 25% and 95%.

“Our fans are an integral part of driving our business,” shares Xiaomi’s Leong. “By bringing together our consumers and employees in a multichannel environment of both the online and offline, this encourages open feedback and participation across all communities.”

Leong Kah Mun, general manager for Southeast Asia, Xiaomi / Photo credit: Xiaomi

With the onset of the pandemic last year, one way that the tech firm was able to maintain consumer engagement was by shifting interactions with its so-called “Mi Fans” online. Face-to-face events, for instance, now took place on video-conferencing platforms such as Zoom. At last year’s Mi Fan Festival on Shopee – an online series of shopping campaigns to commemorate Xiaomi’s birthday – the tech brand saw orders perform better than on an average day for its livestreams, which it held in four markets. This was buoyed even further by product giveaways and vouchers.

To give brands and merchants more tools to retain customers, Shopee also introduced its Brand Membership program during its 4.4 Mega Shopping Sale in April, which Reckitt’s Enfa took part in.

Like offline loyalty programs, the membership offers loyalty points and a rewards system for purchases made within Shopee Mall, which could boost sales figures and encourage cross-category purchases, as well as repeat buyers.

“By reacting quickly to opportunities as they come and collaborating more closely with our merchants to introduce innovative features, we are able to better understand consumers and their behavior and how they interact with our sellers,” concludes Shopee’s Zhou.

Shopee is the leading ecommerce platform in Southeast Asia and Taiwan which provides customers with an easy, secure, and fast online shopping experience through strong payment and logistical support. Find out more by visiting its website.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.