ASIA'S EVOLVINGE-COMMERCEMARKET

2

“Speaking at Etail Asia spurred valuable conversations with new and existing partners in the e-commerce space and across different industries”.

— TITO COSTA, MANAGING DIRECTOR, ZALORA

3

INTRODUCTION by José de Cabo, Co-founder, Olapic . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

PT.1 CUSTOMER RETENTION AN LOYALTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

PT.2 SOCIAL MEDIA MARKETING & THE IMPACT OF UGC . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ABOUT OLAPIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CONTENTS

4

Modern consumers demand more from brands than ever before. They expect personalised messaging and offers, and want to buy from brands that align with their unique personalities and value- sets. Perhaps most importantly, they no longer have patience for disparate and irrelevant experiences. In an increasingly competitive marketplace, brands must focus on creating more impactful relationships with their consumers if they hope to succeed. While this is a global phenomenon, understanding regional differences in consumer preferences can be enormously helpful for brands hoping to engage their audiences more effectively.

For marketers looking to expand globally, Asia-Pacific represents a region of particular interest and opportunity. Engaging and converting customers in Asia requires a nuanced approach, as the market has unique regulatory and behavioural considerations. Olapic, in collaboration with WBR, surveyed marketing leaders in the APAC region to learn what types of

efforts are showing results. Perhaps unsurprisingly, brands are deploying campaigns across a number of channels, including both digital and in-store activations. According to our research, social media advertising is the top channel for marketing communication, demonstrating the increasing importance of authentic interactions with customers.

When asked the biggest challenge facing their brands, respondents cited the ability to stand out from competition, closely followed by understanding the needs and wants of important audience segments. This speaks to a need for brands to develop a content-first, rather than a channel-first, approach to connect with consumers in authentic ways. Many brands we work with are turning to user-generated, or “earned” imagery as a way to aggregate high-quality, personalised, and authentic content at scale. As social networks have proliferated, consumers have begun generating enormous amounts of visual content, often tagging their

INTRODUCTION: THE IMPORTANCE OF AUTHENTIC INTERACTIONS WITH CUSTOMERS

5

favourite brands. In fact, a staggering 98% of brand leaders we surveyed report an uptick in user-generated content being tagged to their brands over the last year. While marketing in APAC will continue to grow in complexity, it is clear that brands have an opportunity to tap into customers’ content, to connect the digital and in-store experience, and drive greater engagement and revenue.

There are already some great examples of how top brands have begun to take note, using branded hashtags to increase visibility and engagement. NYX’s #NYXCosmetics campaign, for instance, showed that customers who interact with UGC have a 93% higher AOV than those who don’t. What’s more, shoppers who now engage with UGC on the site convert to customers at a rate 320% higher than shoppers who don’t.

Read the full case study at www.olapic.com/nyx-etail

6

In Q1 of 2017 eTail Asia & WBR Digital surveyed 100 e-Commerce executives based in Asia on behalf of Olapic. The research prioritised large multinational retailers, with a focus on their activities across the Asia-Pacific region.Respondents to the survey were Heads of e-Commerce, Directors of e-Commerce or others of an equal standing. The survey was conducted by appointment over the telephone. The results were compiled and anonymised by eTail Asia & WBR Digital and are presented here with analysis and commentary by eTail Asia and Olapic.

METHODOLOGY RESPONDENTS BY JOB TITLE

Founder 5%

Head Digital 5%

Chief Marketing Officer 2%

Head Technology 2%

Director e-Commerce 1%

Chief Digital Officer 1%

Chief Executive Officer 17%

Head e-Commerce 17%

Head Business 14%

Head Marketing 13%

Head Marketing 9%

Managing Director 8%

Director Marketing 6%

RESPONDENTS BY GEOGRAPHY

Singapore 49%

India 10%

Indonesia 10%

Thailand 10%

Austrralia 5%

Malaysia 5%

Hong Kong 4%

Philippines 5%

Japan 2%

COMPANIES ANNUAL REVENUE(in US dollars)

0-25 m 36% 100-150 m 1%

25-50 m 15% 150-250 m 10%

50-100 m 9% +250 m 29%

PT. 1CUSTOMER RETENTION AND LOYALTY

8

Singapore 57%61%

Indonesia 18%17%

Malaysia 19%19%

Vietnam 1%4%

China 4%15%

Japan 8%4%

Korea 1%5%

Australia 17%25%

Hong Kong 11%16%

Philippines 10%7%

New Zealand 6%2%

Thailand 17%22%

India 14%15%

Currently active in

Looking to increase presence

WHICH MARKETS ARE YOU CURRENTLY ACTIVE IN, AND WHICH MARKETS ARE YOU LOOKING TO INCREASE YOUR PRESENCE?

9

Differentiating yourself from competition stands out as the top challenge facing retailers in asia, closely followed by understanding the desires of various audience segments.

When it comes to creating content, brands must be able to effectively differentiate themselves from the competition in order to convey the right brand message to new customers. If retailers want to convince new customers of their quality, then content is a great way to do that.

A massive challenge for retailers is understanding the wants and needs of their audience. If they want to learn how to meet those wants and needs, then they must effectively analyse the way that their target market is already interacting with content online and on social media.

WHAT IS THE BIGGEST CHALLENGE FACING YOUR BRAND?

Standing out from competition 25%

Understanding needs and wants of audience segments 22%

Reaching new customers 19%

Bringing repeat customers 10%

Creating enough content to support relevant channels 16%

Transmit the way we want to be perceived in the market 8%

22%19%

16%

10% 25%8%

10

Surprisingly social media advertising is the most popular channel used for marketers in the APAC region, social channels now outstrip email as the primary form of marketing communication.

Social media has become one of the most important channels for marketers, and its growth over the last few years is particularly noteworthy. However, it is clear from these results that marketers are still making the most of multiple channels – promoting a consistent multi-channel message is more important than ever.

One surprising trend is that retailers are investing less in PPC and SEO and shifting their focus to social and banner ads. This may be because retailers are seeing better results from visually appealing ads via social channels.

WHICH COMMUNICATION CHANNELS DO YOU USUALLY USE IN YOUR MARKETING COMMUNICATIONS?

Social media advertising 87%

In-store 81%

E-mail 64%

Retargeting 48%

Online banner advertising 56%

Billboards 43%

STV or radio advertising 39%

Social media owned channels 39%

PPC 19%

SEO 28%

87%

81%

64%

56%

48%

43%

39%

39%

28%

19%

11

Discounts and frequent buyer promotions are the most common tactic to drive customer loyalty for retailers in asia.

This really demonstrates that APAC retail is still very commoditised and dictated by price. However, clearly retailers in the region acknowledge the importance of delivering a convenient and seamless buying experience online. It’s all about setting your brand apart from your competitors in the minds of your customers.

WHAT DO YOU DO TO ENCOURAGE SHOPPER LOYALTY ONLINE?

Discounts and frequent buyer promotions 80%

Store card details for repeat purchasing 73%

Seamless shopper journey such as one click checkout

60%

Access to upgraded delivery options 46%

Encourage users 56% to create onlineprofiles

56%

80%

73%

60%56%

46%

12

Not surprisingly loyalty programs are the most used strategy for retailers looking to drive customer retention.

Again, we see here that price and promotions are still driving retail in APAC – so promoting loyalty is a key touch point for retailers. When there is an opportunity to differentiate, however, it’s all about direct to consumer engagement: creating social experiences, outstanding customer service, and attractive mobile campaigns not being the least among them.

WHICH ONLINE STRATEGIES DO YOU THINK ARE MOST EFFECTIVE AT DRIVING CUSTOMER RETENTION?

Loyalty/reward programs 83%

Customer service/ support 76%

Social Media 71%

Email marketing 52%

Remarketing 48%

Personalisation 46%

Mobile campaigns [e.g. geolocalisation] 68%

83%76%

71%68%

52%48% 46%

13

In the previous question, personalisation was not identified as one of the top performing online retention strategies. Still, here, we see that APAC retailers do value considerably the ability to drive personalisation, to understand their customers’ changing behaviour within the online purchase experience.

From a marketing perspective it would be interesting to know how the purchase confirmation emails are being used to promote loyalty and repeat business – and to what extent retailers are experiencing success in this regard.

HOW DIFFERENT ASPECTS WITHIN THE E-COMMERCE EXPERIENCE RANKBY IMPORTANCE?

Notification of

profile changes

Purchase confirmation

emails

Personalisation

Payment authentication

services

Authentication and security

certificate logos visible

10%

20%

30%

60%

40%

70%

90%

50%

80%

100%ESSENTIAL

VERY IMPORTANT

IMPORTANT

SLIGHTLY IMPORTANT

NOT IMPORTANT

14

71% of marketers are investing more than 20% of their budget on m-Commerce – this really highlights the significance of the way brands communicate directly with consumers, and the value of this channel for the APAC market.

WHAT PERCENTAGE OF YOUR DIGITAL BUDGET FOR THE NEXT 12 MONTHS HAS BEEN ALLOCATED TO M-COMMERCE? 0-10%

3%11-20%

26%

21-30%

51%31-40%

20%

PT. 2SOCIAL MEDIA MARKETING& THE IMPACT OF UGC

16

Understanding the true impact of customer behaviour stands out as the top challenge for retailers looking to improve their mobile proposition.

Marketers in APAC need to take a more customer-centric approach, and really get into the granular detail of their customers’ behaviour online.

As we have seen previously, it’s all too common for marketers to take a price-focused approach, but there needs to be a cultural shift so brand marketers think customer first, drive a more personalised approach, and create better long-lasting relations with customers.

WHAT ARE THE TOP CHALLENGES YOU ARE CURRENTLY FACING IN IMPROVING YOUR MOBILE OFFERING? Understanding impact of your customer behaviour 86%

Technology advancements 55%

Determining actionable KPIs 55%

Company cultural mind-set 41%

Lack of in-house skill 40%

17

All retailers surveyed are looking to increase spend on social media this year.

It’s expansion across the board for social media marketing budgets. This highly important, albeit still relatively new, channel is having a massive impact for APAC brands.

It will be very interesting to observe how social develops this year, especially in light of increased investment – which signifies a move to a more direct, customer-centric approach to marketing.

IF YOU ARE LOOKING TO INCREASE YOUR EXPENDITURE IN SOCIAL MARKETING THIS YEAR, BY HOW MUCH WILL THIS BE IN COMPARISON TO LAST YEAR?

41-50% increase

4%

21-30%increase

48%

Up to 10% increase

1%11-20% increase

33%

31-40% increase

14%

18

User-generated content now outstrips video and image based content as a primary driver for promoting brands in Asia.

Obviously, showcasing the product is hugely important for marketers – and since social media is such a powerful tool for visual promotion, it’s not so surprising that photos of products and services have performed well via this medium.

We can also see here more evidence that marketers realise the importance of getting close to their customers. In doing so, marketers in APAC are using UGC to enable customers to become brand advocates in their own right – a very powerful tool.

IF YOU LEVERAGE SOCIAL ADVERTISING, WHICH TYPE OF CONTENT HAS PROVEN MORE EFFECTIVE FOR YOUR BRAND?

Photos of products or photos that

depict the service provided

88%

Consumers photos associated with

your brand [UGC]

68%

Videos

42%

Photos of models with your brand

50%

Text ads

37%

19

Almost all retailers surveyed have seen an increase in UGC posted about their brand.

98% of marketers have seen an increase in UGC being posted about their brand. This correlates nicely to an increased focus by brands on social channels and 1:1 communications with customers. Consumers are showing they want to communicate with brands, demonstrated by the increase in the number of consumers sharing brand content on social media.

OVER THE LAST YEAR, HAVE YOU SEEN AN INCREASE IN THE AMOUNT OF VISUAL USER-GENERATED CONTENT (UGC) [PHOTOS OR VIDEOS THAT CONSUMERS SHARE ON SOCIAL MEDIA ABOUT YOUR BRAND OR PRODUCTS] POSTED ABOUT YOUR BRAND?

Yes,

significantly

40%

Yes, a little

58%

Not at all

2%

20

In 80% of cases, retailers are seeing an average to high number of UGC coming from channels like Facebook, YouTube, Pinterest and Instagram, which highlights the importance of these channels for the consumer-brand engagement in the region. These channels are closely followed by RenRen and Youku, the Chinese social channels which are similar to Facebook and YouTube respectively.

Marketers need to follow the data in order to achieve success. This means that more resources should be funnelled into promoting UGC initiatives on the most productive social media channels.

WHICH SOCIAL NETWORKS TEND TO HAVE MORE VISUAL UGC SHARED ABOUT YOUR BRAND?

Instagram

Facebook

Twitter

Pinterest

Snapchat

YouTube

WeChat

Sina Weibo

Youku

RenRen

10%

20%

30%

60%

40%

70%

90%

50%

80%

100%A VERY HIGH VOLUME OF

USER-GENERATED CONTENT

A HIGH VOLUME OF USER-GENERATED CONTENT

AN AVERAGE VOLUME OF USER-GENERATED CONTENT

A LOW VOLUME OF USER-GENERATED CONTENT

A VERY LOW VOLUME OF USER-GENERATED CONTENT

21

Marketers surveyed in APAC agreed unanimously on the huge potential impact of UGC on the purchasing process.

Most of all, they regard UGC as a powerful tool in the creation of an atmosphere of trust around the brand – particularly in the area of reviews from peers. They also regard it as a significant factor in encouraging purchasing behaviour, a consequence of the kind of social proof offered by UGC.

HOW DO YOU BELIEVE THAT VISUAL USER-GENERATED CONTENT COULD HELP CUSTOMERS DURING THE PURCHASE PROCESS?

Delivering trust in the products

85%

Encourage purchase 68%

Drive inspiration, by seeing how other 60% consumers are using it

22

86% say UGC is either valuable or very valuable, and all respondents have some intention of incorporating UGC into their strategic marketing plan for the future. This trend will define how brands incorporate social media into broader efforts as they seek to build trust and increase sales this year and beyond.

HOW VALUABLE WILL VISUAL USER-GENERATED CONTENT BE FOR YOUR BRAND MARKETING STRATEGY IN 2017?

I'm currently working on an action plan 54%VALUABLE

Already have plans in place 32%VERY VALUABLE

Currently unsure how I can bring UGC into the plan 14%COULD BE VALUABLE

54%

32%14%

23

ABOUT OLAPICOlapic is an innovator in visual content solutions. From pioneering the first visual earned content platform to creating unique, on-brand content formats for use across all consumer touchpoints, Olapic helps drive brand engagement and performance, at scale, for hundreds of the world’s top brands.

An official member of Facebook Marketing Partner programme, Instagram Partner programme and Pinterest Partners, Olapic is headquartered in New York City with offices in New York, Los Angeles, London, Paris, Berlin, Hong kong, Tokyo and Córdoba.

Contact us here or apac@olapic.com +44 20 3475 3268 © 2017 Olapic Inc. All rights reserved