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Majority of South East Asians refer to at least one digital channel when shopping online

Zalora reported a 19% increase in new brands that joined the platform in 2021

A majority of South East Asians refer to at least one digital channel in the shopping journey, as the Covid-19 pandemic has boosted digital savviness and appetite for shoppertainment and social video.

There is also an uptick in demand for categories like beauty & personal care, kidswear, and luxury sustained across the region, alongside rising adoption of Buy Now Pay Later (BNPL) and digital payments, according to fashion platform Zalora’s SEA Trender report 2021.

The report also finds that AR and VR technologies are expected to ease sampling and thus, cut pre-production waste in fashion, all while bridging the gap with brick-and-mortar in a reimagined hybrid future.

“The dawn of a new era of retail is already here in South East Asia. As consumers become more discerning and connected, we are seeing incredible innovations happening in the retail sector that completely reimagine the shopping experience,” said Gunjan Soni, chief executive officer at Zalora Group.

“Our flagship state-of-the-industry report helps facilitate the industry’s evolution by allowing more brands to understand the changing market and anticipate what the future holds. Our focus continues to be on consumer behaviors (vs. market size outlooks) and how it is evolving.”

The report is based on a comprehensive analysis of Zalora’s retail intelligence and data analytics solution, Data by GFG. It includes intel from over 59 million monthly visits, complemented by insights gleaned through a partnership with Google and other partners.

What are the study’s findings?

  • According to Google, 40m new internet users came online in 2021, bringing the Internet penetration in SEA to 75%. Recognizing this shift in adoption, brands quickly expanded their online presence to reach these new digital consumers.

  • Zalora reported a 19% increase in new brands that joined the platform in 2021.

  • 90% of South East Asians referred to at least one digital channel while researching their online purchase, according to Google data. The average shopper browses across 7.9 websites before deciding, from 5.2 in 2020.

  • Indonesian shoppers are most likely to spend on beauty products and sports equipment as a form of leisure, despite a dip in consumer sentiment due to the pandemic.

  • Filipino shoppers spend the highest average number of hours online, at close to 11 hours, and are most likely to make purchases based on sustainability considerations.

  • With the highest percentage of digital natives, at 88% or 22m, Malaysian shoppers spend close to 9 hours online on average and are the most likely to be value-driven.

  • As spending on international travel and out-of-home entertainment both dipped by over 60%, shoppers in Singapore are most likely to invest in luxury purchases. Google search data show a 21% year-on-year increase in Singaporeans’ searches for luxury goods.

  • Fragrances dominated Zalora’s care category, overtaking face serums and haircare. This is coupled with a continued increase in the average basket size for beauty products on Zalora.

  • Google searches for luxury products saw a pronounced increase especially in Singapore, with a 1.5x uptick versus pre-Covid levels.

  • Reflecting the acceleration in the adoption of e-commerce shopping in the region, the average basket size on Zalora across SEA increased from US$77 and 2.18 items pre-Covid, to US$85 and 2.37 items during periods of low alert, and further to US$96 and 2.70 items during periods of high alert.

  • Consumers are investing more in casualwear and focusing on their fitness. as demand for dressier pieces went down, both men and women across the region have spent more on sportswear compared to other product categories.

  • As consumers start planning their social calendars, forgotten categories are seeing a rebound. For example, when Singapore announced its Vaccinated Travel Lane (VTL) pilot with Germany, the search terms for “winter wear” increased by 275% on Zalora, and searches for thermal clothing rose by 325%.

  • With 290m ‘unbanked’ people in the region, offering alternative payment methods became a must for online retailers. One of the more popular options that emerged this year is the BNPL payment option.

  • In Indonesia, for example, Google saw more than 10 times an increase in searches for e-wallet services and more than 15 times a rise in BNPL services in the last five years. Other appealing payment options like monthly instalments, to 0% interest fees on credit cards, provide access to quality products and services while also improving financial inclusion.

  • Augmented reality features are no longer a bonus but an expected prerequisite for online retailers.

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