Trends for cross-border e-commerce

With the general trend of online shopping of consumers caused by the epidemic, many cross-border e-commerce companies have poured money overnight! Entering into 2021, with the global epidemic The influence has gradually weakened, coupled with the large-scale ban on the Amazon platform, many cross-border e-commerce platforms have suffered a huge blow. However, these influences have also caused many e-commerce companies to carry out comprehensive innovations from product selection to operation models, such as multi-platform development and independent website construction.

At the same time, with the arrival of a series of new concepts such as the Metaverse, what new trends will cross-border e-commerce have in terms of operation mode and product selection in 2022?

Private domain traffic of independent stations

Cross-border e-commerce, especially mainland cross-border e-commerce, has begun to realize the importance of multiple platforms, especially independent stations, after Amazon's collective ban. The independent station can also enable sellers to truly get rid of the restrictions of platform policies and minimize store risks. Data shows that 26% of trading companies choose to build their own independent stations.

An independent website can be a website built by the merchants themselves, or it can be a "brand independent station" built on a SaaS service. Compared with third-party platforms, its advantage is that it can create private domain traffic and is conducive to building its own brand. Create a personalized marketing system to facilitate the creation of loyal user groups, and then conduct secondary and multiple sales.

At this stage, the transaction volume of mainland small and medium-sized cross-border e-commerce enterprises accounts for about 70% of the total cross-border transactions in the mainland, but less than 20% of which have established their own brands. Under the trend of traffic decentralization, based on the SaaS technology platform, merchants can build their own independent e-commerce shopping guide websites, get rid of the shackles of big platform gameplay, master traffic and data in their own hands, and dig deep into the brand value.

Ride the Metaverse

For cross-border e-commerce, Metaverse not only means a surge in sales of related equipment, such as video cards, VR glasses, and even VR helmets and other related popular commodity categories may become new hot-selling products in 2022; for e-commerce services and The operating model will also have a profound impact.

By 2022, online sellers will spend more than $7.3 billion on artificial intelligence, and more than 120,000 stores will use AR, VR and other technologies to provide customers with a rich shopping experience.

Immersion is increasingly attractive to consumers in retail, and the Metaverse essentially brings consumers the ultimate immersive experience. Through the Metaverse, it can help each consumer create an independent virtual space, store the buyer's purchase list, and at the same time, the space can simulate the situation.

For example, build a private audio-visual room for consumers who want to buy audio, put switchable brand audio in the corner, let consumers listen to the audio playback effect before placing an order, or build a virtual kitchen for consumers who want to choose kitchen supplies. Consumers can choose and simulate various kitchen utensils and place an order when they are satisfied. A virtual fitting room by Israeli startup Zeekit has reduced return rates by 36%, and these are even just a small step toward the metaverse. Virtual experience can improve the experience of foreign end users, which has great potential for China's current strong supply chain of cross-border e-commerce.

However, it should be noted that if you want to change the operation model and consumption experience through the Metaverse, it may be a huge investment for cross-border e-commerce, and the short-term return is not very attractive. In response to such concerns, cross-border e-commerce companies can consider using existing metaverse service providers. For example, Horizon Worlds launched by Meta will be the main entrance for consumers’ immersive consumption in the future, and cross-border e-commerce companies can also use this shortcut to reach consumers directly. , so as to get twice the result with half the effort.

Vision

In addition to discovering sites with great potential for e-commerce development, product selection is also the key to creating high sales. So what categories should sellers pay attention to in 2022?

Toy

According to Shopify's forecast, toys are the number one item among the hot products in 2022, and the global order growth rate is expected to increase by 1239% year-on-year, and Canada is one of the hottest places. Among them, dolls, handicrafts, building block sets, dolls, games and puzzles, baby toys, electronic toys for teenagers, plush toys, mini car models, adventure toys and outdoor sports toy vehicles are all sub-categories that sellers can pay attention to. However, when listing toys, sellers should pay attention to copyright issues to avoid infringement.

Pens and pencils

Global orders for pens and pencils will grow by 540% in 2021. Mainland manufacturers are launching new products for different groups and scenarios. For example, stylus pens, inks of different colors and pencils of different sizes have a relatively large and sustained growth force for product demand in segments such as students, artists, luxury goods, and enterprises.

Cutting tool

In 2021, global orders for this category of goods will increase by 341%. Relevant data shows that the sales of manual cutting tools are on the rise. People are spending more time at home and considering spending more time on DIY and home improvement projects. While "hand tool cutters" generates only 1,300 searches per month, a few variants can be targeted, including pliers (27,100 monthly searches), metal cutting tools (12,100 monthly searches), Bolt Cutters (74K monthly searches), etc.

Office chair

Office chair orders will grow 304% in 2021. Similar to other popular items in the homeware line, office chair sales are likely to increase due to the pandemic's trend toward working from home. A good office chair can help people work more efficiently. People can reduce chronic back pain and reduce medical costs associated with poor sitting posture due to poor quality chairs.

Kitchen cleaning towel

Kitchen wipes saw huge growth in early 2021, up 282% year-over-year. According to the latest report, the global kitchen cleaning wipes market is expected to reach USD 20.9 billion by 2026.

VR and its supporting equipment

The demand for virtual experience in the Metaverse has grown, followed by buyers' demand for an immersive experience of cross-border e-commerce shopping in the virtual reality mode, as well as the demand for VR and its supporting equipment. Merchants can pay attention and make arrangements in advance.

If you want to learn more about cross-border e-commerce platform entry, operation strategies, various regulations, finance and taxation management teaching, welcome to contact RBCS!

Insights of ASEAN E-commerce (2021)

The spread of Covid-19 has compelled ASEAN leaders to impose social distancing measures and lock down cities from time‑to‑time, since the beginning of the outbreak in early 2020. It has put strain on traditional retail given the widespread closures of physical stores and diminishing consumer demand. While the pandemic has led to a period of extreme upheaval for traditional street-side stores, it has driven a dramatic uptake of digital adoption across ASEAN countries, accelerating the shift towards online retail channels that was already underway.

Store‑based retail sales plunged and remained weak over the last year in major ASEAN consumer markets. As the pandemic progressed, however, it has sped up digital transition and accelerated an expansion of e‑commerce. Consumers are provided with access to a significant variety of products from the convenience and safety of their homes, while retailers scramble to bolster their online channels to minimize impacts from social distancing measures or contact restrictions.

First Time Using E-commence

There was a dramatic uptake of digital technologies across key economies in Southeast Asia, with 40 million people came online for the first time in 2020 alone, bringing the total number of internet users to 400 million, up from 250 million in 2015. More than three out of five people in these economies are now online and since the pandemic began they have been spending more time on the internet. Time spent online per day rose by an average of one hour across ASEAN countries, with the highest spike in the Philippines, where consumers spent more than five hours a day online.

The use of e‑commerce has also surged since the start of the pandemic, with the strongest uptake in Indonesia, followed by the Philippines and Malaysia. As consumers increasingly embrace the benefits of safety and convenience over e‑commerce, the shift to online shopping is expected to stay post‑pandemic. Interestingly, many ASEAN countries have seen stronger e‑commerce adoption among internet users than the world average as well as many mature markets. Indonesia was found to have the highest e‑commerce adoption in the world last year, with 87% of its internet users having purchased online via an electronic device, followed by the U.K. (86%), Thailand (84%) and Malaysia (83%).[4] Adoption in other ASEAN countries, such as the Philippines, Singapore and Vietnam, has also outrun mainland China, which is considered one of the world’s largest e‑commerce market.

Being late adopters to the internet, most consumers in the region have never owned a desktop computer. Instead, with smartphones becoming increasingly more affordable and accessible, mobile devices have become the main means to stay connected and shop online. Indonesia emerged as the world’s most enthusiastic adopter of mobile e‑commerce last year, with about 79% of Indonesia’s internet users purchasing something online via a mobile device, followed by Thailand (74%) and the Philippines (70%). Meanwhile, mainland China ranked the sixth in mobile e‑commerce usage, with 64% of internet users having shopped online using a mobile phone.

E‑commerce was previously factored by many retailers in ASEAN as a good‑to‑have option rather than being an essential business strategy. As Covid-19 reshapes consumers’ behaviours and accelerates transition to online shopping in ASEAN, e‑commerce has become an effective channel for companies, including Hong Kong SMEs and exporters, to reach local consumers or grow their existing footprint in ASEAN markets.

Lazada and Shopee are the two key online platforms with operations in major ASEAN countries, including Indonesia, Vietnam, Thailand, Singapore, Malaysia, and the Philippines. While these two leading e‑commerce players took a regional approach, there are also many local B2C platforms in individual ASEAN countries. For example, Tokopedia and Bukalapak are popular in Indonesia while Sendo is well‑liked by Vietnamese consumers.

Consumer electronics and apparel are the key product categories purchased online by Southeast Asian consumers, accounting for over half of the region’s e‑commerce gross merchandise value (GMV) in 2020. Meanwhile, the “stay‑at‑home economy” has disrupted food purchasing and consumption habits, forcing many consumers to cook or eat at home, and experiment with ordering food and groceries online. The e‑commerce GMV share of food and groceries jumped from 4% in 2015 to 11% last year, with more than two out of five ASEAN consumers are new to online groceries purchase.

<Source: HKTDC - Melissa Ho>

ASEAN E-commerce: Unlocking Growth Via Digital Marketing

Interview with Chitpol Mungprom, Founder of Zanroo

Brands have traditionally relied upon surveys and research to understand their consumers, but these approaches have several shortcomings such as being time‑consuming and having limited sample sizes. As the number of digitally connected consumers grows and social media usage expands, social listening provides an alternative for brands as well as marketers to tap into much richer consumer insights in real‑time.

In Southeast Asia, social listening has profound implications for many core marketing functions – from consumer analysis to customer support to competitive intelligence – given the high social media penetration in the region. More than three out of five people in Southeast Asia are active social media users, with Malaysia having the highest penetration rate of 86%.[1] In view of the today’s digital marketing climate in Southeast Asia, HKTDC Research sat down with Chitpol Mungprom, Founder of Zanroo, to understand how social listening and digital marketing works in the region.

Understand Consumers Through Social Data

Founded in 2013, Thailand‑headquartered Zanroo provides business intelligence tools that track, monitor, collect and analyse online conversations across social media platforms and websites. Sharing the key benefits of utilising social data, Mungprom said: “For any brands to succeed, it is important to know your target consumers so that you can direct your marketing efforts towards the right audience and yield better results. Our social analytics solution can understand the diverse local languages in Southeast Asia, such as Thai, Bahasa and Tagalog, and offers a window into consumers’ positive and negative feelings towards a brand and its products and services. It also shows what trends consumers are interested in.”

Apart from consumer insights, social data informs marketers and brands about the competitive landscape. Mungprom elaborated: “Through social listening and monitoring, a company is able to get honest comments and feedback about brand loyalty, and the strengths and weaknesses of its competitors. With this information, it can look at ways to differentiate itself from other market players.”

As a mobile‑first region, Southeast Asia has made its way into the radars of many digital marketers given its high social media penetration, with almost seven out of ten people in the region being active social media users.[2] Understanding the centrality of social media to ASEAN consumers’ shopping experiences and interactions with brands, Mungprom expanded his business to cover all ASEAN markets with offices in Malaysia, Indonesia and Singapore.

Moving Forward to Data Technology and AI

Mungprom shared that social listening techniques have been around for some years and becoming more common in consumer‑facing industries. To differentiate Zanroo from other marketing technology companies, Mungprom believed that it was essential for the company to utilise data technology and analytics for more dynamic consumer insights. He said: “In Thailand, the industry has reached a consolidation stage for social listening technology. It is key for us to improve our offerings and solutions and bring the business to the next level. Instead of just tracking conversations online, we’re looking to predict consumer and industry trends with the data we have.”

One highlight of Zanroo’s enterprise solution is to help brands match online and offline consumer data. Elaborating on this, Mungprom said: “Online data usually originates from various points across the customer journey such as online transactions, customer service chat logs and browser cookie data while offline data includes purchase history in physical stores and loyalty card information.

In today’s world, consumers demand consistency across communication channels. By integrating online and offline data, we’re able to identify and match the customer who visited the brick‑and‑mortar store with his or her online interactions with the brand, and hence achieving a truly omni‑channel experience. At the same time, we are able to create more comprehensive customer profiles and bolster our marketing efforts for brands to attract new customers or convert potential customers.”

In anticipation of heavier adoption of artificial intelligence (AI) in the future, Zanroo also provides chatbot solution to help brands engage with their customers. Mungprom pointed out that the Covid-19 pandemic has indeed brought AI chatbots into the spotlight for many brands and marketers in Southeast Asia, saying: “The pandemic has taken a toll on physical retail stores and brands are looking for alternative ways to connect with their customers and improve shopping experiences. Over the past year, we have seen more businesses adopting chatbots to automate responses to customer inquiries and help strengthen connections with customers.” While chatbots can offer a better conversational experience for the customer, Mungprom advises businesses to always provide an alternative means of communication by giving customers the option to contact human customer service agents when needed.

Tips for Effective Marketing

Against the backdrop of the pandemic and the subsequent structural shifts in consumer behaviours, the significance of digital marketing cannot be understated. To deliver resounding success in social media marketing, Mungprom has identified some useful strategies for brands. He emphasised the importance of consistency: “Consistent content allows for top of the mind awareness. It’s usually not the initial message that grabs the consumer’s attention but the subsequent exposures to the content. Social media is fast‑paced by nature, and content becomes obsolete quickly. That’s why posting regularly is so essential. Besides, brands also need to engage customers consistently and swiftly on social media platforms to build up credibility online.”

Whilst the region is highly active on social media, its cultural diversity means that taking a one‑size‑fits‑all approach in marketing is ineffective. Mungprom explained using Malaysia as an example, saying: “ It is a multi‑cultural and multi‑racial country with Malay, Indian and Chinese communities, and it is a melting pot of different religions and festive celebrations. Being culturally sensitive when communicating with the audience is vital.

“For example, a food and beverage company should be mindful about the month‑long Ramadan fasting period. It would be useful to understand how and when Muslims fast during Ramadan –from dawn to sunset – and adjust the advertising or marketing campaigns accordingly.”

While social media platforms including Instagram and Tik Tok are widely used to engage with customers in Southeast Asia, especially among Millennials and Gen‑Z, Mungprom suggested that traditional marketing channels such as billboards and TV broadcast remains effective for certain groups of target customers. Mungprom said: “We have worked with a client who sells personal care products in Thailand and the company spent the major part of its budget on street and bus stop billboards rather than on online social media campaigns. Knowing your target audience before choosing the right marketing channels is important for any kind of marketing to be effective.”