COVID-19 Impact on Digital Commerce Highlights Benefits of Buying Online
Ogilvy has released a new report highlighting how much brands need a direct-to-consumer digital strategy to overcome covid disruption and dominate the market going forward.
Digital commerce is on the rise, the report says, but online shopping has been slower to grow in Southeast Asia than in markets like China. Southeast Asian brands need to prepare for a habit change ripple effect with far-reaching impact across all sales channels.
Online shopping marketplaces such as Shopee and Lazada are driving digital commerce penetration and leading online customer experience trends in the region. With reliance on markets for the digital commerce strategy will come with rising costs and loss of ownership of an increasingly valuable asset: customer data.
The report argues that direct-to-consumer selling offers the ability to nimbly adapt to changing customer expectations, delivering unique experiences that set brands apart. Not only by providing ownership of invaluable customer data, but by driving innovation and personalizing offers based on data-driven insights.
Over the past year, the pandemic dramatically increased the adoption of digital commerce and related digital services in Southeast Asia. Internet penetration, digital payment, and consumer confidence in digital commerce all increased significantly in 2020. The region’s online industry is set to triple to $ 309 billion in gross value. of goods by 2025.
“In Southeast Asia, social media penetration ranges from around 60% in Indonesia to 90% in Malaysia as of early 2021,” said Tim Till, vice president of Presales Consulting-Technology for Ogilvy.
“Sponsorship-based commerce with influencers may increase as the sophistication of payments to these influencers matures. A growing consumer base, including unbanked individuals, will increasingly be able to shop online as individuals and businesses are able to receive payments and pay through new and developing methods such as crypto. -currency, buy it now and pay later, electronic wallets.
According to Waheed Bidiwale, global vice president of Verticurl, the delivery and operations center of Ogilvy, the trend of digital commerce will eventually accelerate, shifting from lifestyle to the full range of product and service categories. .
“Few people thought about buying toilet paper online before Covid,” Bidiwale said. “Brands that think ‘I’m in a commodities business, or I’m in the impulse buying category or nobody buys a car online, so I don’t need digital commerce,’ need to review their strategies. “
The Ogilvy report argues that the benefits of marketplaces will not be sustainable as an option in the long run and that there will eventually be associated costs such as a need to buy advertising in order to generate traffic on the site.