E-commerce is increasingly becoming a ‘play to win’ channel as consumers shift here for convenience, price, and assortment with the added safety of being able to buy with just a click right from their homes. How about marketers? If you have brands across categories like personal care, food, beverage, beauty, or home care - then what are some of the trends shaping up, and is this a channel to invest in right now?
Read on as Meta and Kantar partner together to understand the evolving e-commerce landscape for FMCG categories across Malaysia, Vietnam Urban, Thailand, and Indonesia. The Drum is excited to share some of these findings establishing the trends and following them up with the enablers for the e-commerce foundation to help FMCG marketers navigate this space seamlessly.
Fastest growth among all channels
Based on Kantar’s 2021 omnichannel report, while the e-commerce value share of FMCG is currently under 10%, it is the fastest-growing at 27.2%, while total FMCG in Asia grew by around 5%. Shoppers in South East Asia are still developing the habit of shopping online with convenience and value for money being top drivers, however, this is also the fastest-growing channel, posting 56% growth based on 2021 first-half trends from Kantar.
Chandana Sunder, who heads verticals marketing at Meta, says that the experience is evolving, moving beyond functional needs to deliver a fabulous experience via AR/VR, allowing users to try before they buy or hear from their favorite influencers via livestream.
One could argue what this means for their categories, you’ll be surprised to know that food and beverage comes in tops with around 41% online value share followed by beauty and personal care at almost 40% and home care/others forming the rest. This is a space not to be missed!
The highest source of new users and repeat shoppers
Among all the shopping channels, e-commerce is proven to bring in the highest number of new users. In the first half of 2021 for South East Asia, new users from e-commerce increased by 46.8% based on the 2021 omnichannel report from Kantar. Now, not only are these shoppers buying on e-commerce, but the repeat rate is also increasing (above 50% for South East Asia) as they become more accustomed to buying here, starting to form a habit.
Increased online basket size (vs offline)
Did you know that the online basket size is anywhere between 1.6-4 times the offline basket size for South East Asia? Kimberley Hiu, director at Kantar Worldpanel shares the perspective that this could be due to bulk buying on e-commerce or purchase of more premium products. Take this factor into consideration as you develop the right assortment for your online portfolio.
Double-digit predicted future growth
Kantar has developed a multivariate e-commerce simulator that can forecast future growth based on parameters from shopper behavior, macroeconomic factors, and residential mobility. For South East Asia, the e-commerce forecast for the next four quarters is an increased and consistent double-digit growth making this an essentiality play for brands.
What does establishing a strong foundation for e-commerce look like?
How to ‘activate’
Before jumping headlong into e-commerce, it is worthwhile understanding your key business needs and what e-commerce solutions most meet these needs. From marketplaces, direct to consumer, conversational commerce to omnichannel solutions, identify the right model to play.
Most importantly prioritize KPIs for long-term market share leadership in e-commerce with consumer penetration and value share to start with.
“E-commerce is at the forefront of industry transformation and the potential to gain market share in this channel is huge. With unified goals from all organization functions and continuous learning spirit to accelerate commerce, you will see successful results,” says Ee Mun Lim from global client and category at Meta, APAC.
How to ‘allocate’
Once you’ve decided on the e-commerce model/s to invest in then the next step is to allocate with sufficiency for both your brand and e-commerce outcomes. Meta, in partnership with Kantar, has released principles on how you can maximize your brand and commerce investments for the most effective outcome - you can read more here.
How to ‘accelerate’
The best results come with a mix of executing proven strategies and continuously evolving with experiments to improve the effectiveness and efficiency of your online campaigns. Across the spectrum of solutions available from Meta, you can work closely with the Facebook regional solution experts and marketing science experts for the best outcome.
Remember this is a journey. There’s no time like now to take that ‘first step’ towards establishing the e-commerce foundation for your business.