As the coronavirus pandemic (Covid-19) spreads through the world, no industry has been spared from its effect, with economies impacted as many countries went into lockdown.
Since the Singapore government instituted a partial lockdown to flatten the curve, the F&B and retail industry has been among the most badly affected with some expecting as much as an 80% revenue loss.
A survey conducted by #savefnbsg coalition among key industry players from F&B establishments, 88% of restaurants indicated that they may not be able to survive April without assistance.
This means the livelihoods of over 220,000 people and their families supported by over 18,000 local F&B establishments are under threat. To combat this, an influx of traditional F&B and retail merchants are flocking online.
While the fundamentals of retail remain the same for both offline and online, the means to engage customers and ultimately make a sale online are different. For example, in place of seeing the product in person at a retail store, you need pictures with the product in a clear view when viewing it online.
"As with running a physical storefront, online retail requires a host of preparations. These include developing a comprehensive product listing with attractive pictures, setting up a retail site capable of handling payments, and managing the logistics of getting the products delivered," Pauline Lemaire, director of account strategy for large customers, in South East Asia, Hong Kong and Taiwan at Criteo tells The Drum.
"Businesses also have to look into maintaining their online storefront by ensuring enough inventory, seamless user experience and even online advertising to reach out to new and returning shoppers. Brick and mortar-centric stores can navigate around these by working with trusted partners who can help them sustain and elevate their online business."
Another key challenge is the need to shift the marketing mindset of potential merchants, with regards to the allocation of their budgets. Traditionally, brands allocate a fixed budget for their marketing and advertising campaigns, paying upfront for eyeballs or for clicks.
Many of these retailers are turning to e-commerce platforms to digitise their business and diversify their revenue streams. The Drum speaks to the major e-commerce platforms in Asia Pacific to find out how they are helping retailers, brands and consumers.
The Alibaba-owned platform says the onboarding of sellers is a priority and has a dedicated team focused on this initiative, providing training and support to businesses, especially some who are in retail but have not yet explored the benefits of going online.
It joined Enterprise Singapore (ESG) Singapore E-Commerce Programme to help retailers change their business model and diversify their sales channels and revenue streams beyond traditional brick-and-mortar.
The partnership means when retailers sign up to be a seller on Lazada’s platform, they can receive up to S$9,000 on qualifying costs for selling on Lazada. This supporting package covers services that are provided by the platform, including content development, product listings, training and advertising.
Aside from the subsidies, Lazada Marketplace doesn't charge commission to its sellers, but its LazMall service does. However, this benefit has been extended to new LazMall sellers for their first 30 days, to defray their costs during this incubation period.
“With the postponement of the IT Show in March, we held an Online Tech Show to help our affected sellers, especially those who initially had booths and we saw a 50% increase in participating sellers,” James Chang, the chief executive of Lazada Singapore tells The Drum.
“Similarly, we are holding campaigns especially for our SMEs to participate, so that they can continue to engage their customers online they would otherwise miss during the circuit-breaker period.”
Michelle Yip, the chief marketing officer for Singapore at Lazada, previously explained to The Drum why the future of e-commerce is combining live streaming and entertainment, as part of The Drum’s Digital Transformation Festival.
Aside from being part of the same ESG programme as its competitor Lazada, Shopee is keen to nurture and empower local entrepreneurs and SMEs. It has rolled out campaigns such as the #SGUnited Shopee Support Local Campaign in Singapore, to provide additional support to local businesses during this trying time.
This initiative aims to increase exposure for local sellers and helps drive traffic to them through a dedicated campaign microsite. The microsite will feature various local sellers each week, and will also provide sellers with marketing support in the form of vouchers and discounts to optimise sales.
“Shopee firmly believes that Singapore needs to remain united - now, more so than ever before. We are committed to playing our part in encouraging unity during this time and have launched the ‘I’m Staying Home’ Campaign,” Zhou Junjie, chief commercial officer at Shopee tells The Drum.
“Running this week as part of our #ShopeeGivesBack initiative, we aim to unify Shopee users in Singapore by giving them a platform to pledge to stay home. With this campaign, we encourage all our users to be socially responsible to help flatten the curve.”
The cashback platform recommends that all brands, especially those still without an online presence, to take this opportunity to ramp up on their digital strategy. Since the onset of Covid-19, it has already seen many businesses begin to onboard onto e-commerce marketplaces or set up their own online stores to serve customers.
However, this does not necessarily mean that they are well equipped or have the know-how to reach and attract online shoppers.
According to Joel Leong, the co-founder of ShopBack, brands that onboard onto ShopBack are assigned an account manager from the business development team who works with them on their marketing efforts. On top of that, the platform provides its merchant partners customer insights to make more data-driven and targeted decisions.
“ShopBack has a clear value proposition that is understood and appreciated by our merchant partners. We operate a performance-based marketing model, meaning merchants pay a pre-agreed commission only after a successful sale or transaction, and any other online and offline marketing efforts driven by ShopBack are free,” Leong explains to The Drum.
“This is a huge draw for brands, especially now, because they are not required to pay large sums of money upfront without a guarantee of results or conversion. Separately, to support local F&B businesses who may or may not have managed to launch their offerings online, ShopBack GO recently launched a campaign called ShopBack To Go as a simple way for consumers to find restaurants with takeaway options in their neighbourhood, including those with great takeaway deals.”
“Users need only tap the 'Takeaway' filter on ShopBack GO, or browse your neighbourhood's page, to view their options. We hope that this campaign will help our F&B merchants during this challenging period, by raising awareness of their brand and driving sales for them.”
As consumers are reeling from the worsening global economy and are seeking out the best way to cut costs and maximise savings as they shift their spend online, Leong claims many are turning to ShopBack to get extra savings, as they can earn cashback when shopping online for groceries, home essentials, and more.
He says this is reflected in the recent increase in installs and usage of its ShopBack Button, a built-in extension feature that automatically highlights available coupons and cashback. The platform saw a 27% increase in installs of the ShopBack Button in March, as compared to February this year.
“Where consumers are, brands should follow. Not only can merchants tap on ShopBack’s existing user base of over 20 million across APAC, ShopBack also helps merchant partners minimise marketing and advertising costs while driving actual sales—and this is especially important in a time when brands are taking a closer look at their spending, and opting for channels that are relevant and necessary,” he explains.
“In my previous job, I saw how expensive marketing could be. Traditionally, a brand pays a hefty fee upfront for ad space independent of the performance or outcome. Brands can also pay for impressions, eyeballs, or clicks via other marketing channels, which may not lead to actual sales.”
He continues: “Conversely, ShopBack offers performance-driven marketing solutions, which means that merchants pay only when a sale has been completed and incur no additional costs for cancelled or unfulfilled orders. In fact, our merchant partners are running more cashback promotions now to capture a larger share of the online shopping pie.”
The fashion e-commerce platform is helping brands by working with them to not only expand the assortment of relevant and essential products, but to also focus efforts on ensuring orders are delivered and fulfilled on time, and in compliance with local government regulations.
For instance, the platform took note of the increasing demand for items in sports, loungewear and home essential categories, and are working with brands to expand their assortment.
"We also recognise the need for and increasing importance of data to obtain a more accurate picture of consumer trends and needs. To that end, we launched Trender, a data-solutions service, that enables brand partners to tap on our trade data and secure insights on current customer trends and preferences, as well as shifts in consumer behaviour," Giulio Xiloyannis, the chief commercial officer at Zalora tells The Drum.
"We are also releasing a Covid-19 Sales Dashboard on Trender to help brands see and analyse the shift in retail trends, as well as customer shopping behaviour pre- and post-COVID-19. Through our Trender service, we hope to support our brand partners and arm them with accurate data-driven insights to attract and retain customers."
Trender is being offered free of charge for the entirety of Q2 to help brands gain the most insights, at no cost, when they are most needed.
Zalora is also leveraging on its data to provide insights to brands on issues like where customer behavioural shifts are and the profiles of customers that are driving this.
This has allowed Zalora and its brand partners, to be more targeted and effective in our marketing, merchandising, and designing strategies. For example, it launched the Essentials category on its website and mobile app in response to the growing consumer demand for basic necessities and home essentials.
To support brick and mortar small and medium enterprises (SMEs) adapt and go digital, the second-hand e-commerce platform has launched a ‘#SupportLocal Retailers’ initiative.
The initiative will provide eligible SMEs with a business grant worth $300,000 that entitles them to the following suite of premium seller tools for retailers to gain more exposure to buyers during this crucial period and expand their business - $200 worth of Carousell Coins (advertising currency on Carousell), $90 worth of CarouBiz features over 3 months, free access to contactless payment and up to 50% subsidised delivery options.
"With the extended circuit breaker measures in place, many retailers are not allowed to operate their brick and mortar businesses and Carousell is stepping in to help them digitise easily," says Lewis Ng, the chief commercial officer at Carousell.
"We do this by providing a platform with high reach and visibility, with 1 in 4 Singaporeans using Carousell. We’re also providing eligible SMEs with the business grant and will be helping our sellers with the onboarding process as well."
Ng explains Carousell's mission is to inspire every person in the world to start selling and buying to make more possible for one another. He says what is unique to Carousell is that anyone can use the platform to start selling, from casual secondhand sellers to SMEs looking to digitised.
"With the snap of a photo, selling can start immediately. We continue to ask the question of how Carousell can make people’s lives easier, and remove friction when it comes to buying and selling. To make listings as quick and easy as possible, we’ve leveraged our AI capabilities to roll out an object identification feature, where an image taken for a listing is automatically provided with recommendations for the object’s name, product categories, and optimal selling price," he says.
"With 1 in 4 Singaporeans using Carousell, we have a huge and highly engaged user base, and our assets and data allow partners to efficiently market towards targeted audiences."
He continues: "Over the past few years, we’ve been investing in end-to-end solutions for retailers, from marketing and lead conversions, to integrated payments and shipping solutions with Carousell Protection. There is a huge demand from Carousellers for new items today, and we are confident that SME businesses will be able to gain great traction on our platform."
Since the onset of Covid-19, the ride-sharing platform's immediate priority has been to support our merchant and driver-partners during this very difficult time, including a US$40 million in relief initiatives for the region.
The relief initiatives include a financial assistance scheme for driver-partners, collaborations with NGOs to distribute food staples to needy driver-partners, and also helping merchants stabilise their business by moving them online as quickly as possible.
A Grab spokesperson tells The Drum the platform understands that many F&B businesses are keen to diversify their operations to cope with the impact of Covid-19 as footfall and dine-in volumes have been severely impacted.
"To help as many merchants as possible to start their online businesses, we have been ramping up and expediting our onboarding process, and introducing virtual onboarding for merchants. In Singapore, we have onboarded more than 1,500 merchants in Singapore since January 2020. Merchants choose to work with a delivery platform like GrabFood as it allows them to onboard quickly and minimises the upfront cost and resource needed to start and maintain an online business," the spokesperson says.
"Our platform connects merchants to a huge and highly-engaged customer base, which helps to drive more online sales for them during this period. This also enables merchants to continue to have a top of mind recall with their customers. In addition, our operational capabilities - including fulfilling orders within a given timeframe that is supported by our tech, fleet and customer support - takes the hassle out of maintaining a delivery business for merchant-partners."
Grab has also introduced new services to improve merchants’ visibility on the app to help improve their discoverability on the app so as to help drive demand for its merchant-partners.
In Singapore, Local Heroes curate over 500 well-rated, single outlet F&B establishments. This enables users to find new local favourites quickly within the tile. Another initiative in Singapore is Islandwide Delivery, which expands the service radius for merchant-partners.
Meanwhile, in Malaysia, Grab partnered with the Selangor state government to provide a digital sales platform for small micro-entrepreneurs, social sellers and Ramadan bazaar merchants via the Grab app.
As communities practice social distancing to stem the spread of Covid-19, and with the ban of traditional Ramadan bazaars as many of these merchants could lose their source of income, ensuring cash flow for them is important for Grab during these difficult times.
"We know that during this period, having liquidity is important for F&B merchants. We continue to look for ways to improve merchants’ cash flow, such as rolling out 0% commission for self pick-up orders to help merchants who traditionally rely on walk-ins. In Malaysia, as part of Grab’s Small-Biz Relief programme to support small, independent restaurants and hawkers, GrabFood gives RM3 back to local hero merchants for every order that goes through our platform," explains the spokesperson.