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"Asia as a whole, you can think of it as big, diverse, and very hungry." — Rebecca Xing, CEO, Trustana
Brands that want to unlock new levels of growth and profitability may need to either expand to new markets or increase their market share in regions outside the U.S.
Asia arguably offers the best opportunity for them to accomplish these goals. However, it is a nuanced market with diverse customer preferences, digital behaviors, and compliance considerations.
To help brands understand them all, the "Unpacking the Digital Shelf" podcast team interviewed Rebecca Xing, CEO of Trustana, a Singapore-based company that enables retailers, distributors, and brands to better manage and monetize their product information.
Xing appeared on the episode "Insights from Ecommerce in Asia" to discuss trends and opportunities in this region and shared advice for how brands can capitalize on them. Here’s Xing’s invaluable primer on ecommerce in Asia.
The ecommerce landscape of Asia is distinct from the U.S., Europe — and even across countries within the region — in several ways.
"It's a really exciting region because it's so diverse," Xing says. "I think of it as big. It's just such a big region in terms of pure population that’s relatively young, very much growing rapidly, and has really adopted digital ways with a real kind of hunger for it."
But there are nuances within this market too. China, Asia’s largest ecommerce market, is more mature than other Asian countries. It has established selling platforms and channels, such as jd.com, and reaches billions of buyers.
However, Southeast Asia’s ecommerce market is growing, and Gen Z consumers play a larger role in influencing online purchasing. Australia and New Zealand are smaller markets, but buying behaviors there most closely resemble the U.S. compared to other countries in the Asia-Pacific region.
With all these nuances, brands can’t adopt a one-size-fits-all approach for engaging customers in Asia.
To expand or grow their market share in Asia, brands also have to consider various ecommerce trends taking hold in the region.
Xing says Asia is one of the fastest-growing ecommerce markets in the world. Mobile commerce is largely driving this growth.
Buying behavior in Asia is also very omnichannel and price-conscious. Whereas Black Friday is the biggest annual shopping event in the U.S., Singles Day is the Asian equivalent. During Singles Day, consumers can access steep discounts on a range of products. The unofficial Chinese holiday, which takes place annually on Nov. 11, has become so entrenched in the region it has spurred other deal days and spin-offs throughout the year.
"What's now happened is that consumers are almost trained to wait for these sales and discounts,” Xing says, adding that ecommerce sites and marketplaces are now “really playing into that price sensitivity that the consumers have.”
Like brands in the U.S. and other regions, Asian companies focus on driving profitability.
Xing says online marketplaces in Asia are offering more services and becoming "these super app type marketplaces" that offer financing, insurance, and other services besides physical goods. They’re also increasing commission take rates from sellers on their platforms to boost their bottom line. Brands have responded by building their own ecommerce sites or investing in their own ".com," as Xing calls it.
This phenomenon is similar to what’s happening in the U.S., as many brands try to set up their own direct-to-consumer (DTC) channels to reduce reliance on Amazon, access more first-party data, maintain brand integrity, and nurture a one-to-one relationship with their customers.
Social selling and live shopping are also big in Asia.
Live shopping is a combination of live streaming and shopping, similar to QVC and HSN in the U.S. Companies often hire influencers to sell their products during live shopping events, which have high conversion or sell-through rates.
"The concept is sort of similar, except instead of dialing in to place an order, you are doing it through an app or through Facebook," Xing says. "It's basically incorporating this see-click-buy experience into a social platform."
Along with social shopping, there’s also group buying, which is mostly popular in China and Southeast Asia. With this wholesale-like approach, which became popular during the pandemic, consumers organize through WhatsApp to pool together their resources and make bulk purchases. The organizer may or may not receive a commission on the products.
Xing says group buying is popular in Asia because it leans into cultural customs around prioritizing community. These models essentially monetize community. Brands who want to enter this market must understand these inclinations and integrate them into their ecommerce strategy.
"If you think of it broader than just live shopping or group buying, but you think of it as how do you build a community around your product and your brand as part of your way to build that connection and eventually sell more product, I think that's something Asia has done very well and maybe something that could be learned from," Xing says.
Whether it’s social selling, group buying, or building their own .com, data has never been more important for brands, Xing argues. Data is also critically important for brands to navigate Asia’s compliance environment and successfully execute localized marketing campaigns.
"Both for compliance and for localized marketing, I think having a strong product data backbone is super essential." — Rebecca Xing, CEO, Trustana
Brands will need to make cultural adjustments to products for various markets, such as focusing on text-based product descriptions in Thailand versus leaning on visual imagery to cater to customer preferences in Korea and Japan. Some brands are using artificial intelligence (AI) to better manage their product data and seamlessly deploy it in localized ways.
"When you're speaking about product data, in particular, the first [thing] is that you need a data master, and the second is that you need to be able to transform that data into the formats that each of those sales channels is looking for," Xing says. "We've actually seen examples of retailers and brands here utilizing AI to solve this problem."
In Asia, brands also must deal with a fragmented compliance landscape where there’s no central regulatory authority.
"That means if you want to enter the Thai market versus the Indonesian market versus the Malaysian market versus the Chinese market, those are all going to be a different set of compliance [requirements] that you have to overcome," Xing says.
In some markets, such as Thailand and Indonesia, it can take three-to-six months to get regulatory approval. Brands will need to factor in this lead time before they launch a product in Asia.
Xing says brands must be agile and willing to experiment because most companies in the region are always looking for where consumers are headed next. Just as importantly, brands must always remember there’s so much diversity in Asia, so they must adapt to local tastes in each market.
"That adaptation to different communities, different preferences is something that can deepen that connection and help the product find the right consumer set," Xing says.
To hear more of Xing’s insights on Asia ecommerce, listen to the full episode.
