The five golden rules of market expansion in a no-line human-to-human age

In a world where the line between B2B and B2C and between on- and offline is gradually fading, one thing remains constant: connecting with your customers and finding the right channel mix are key ingredients of success in Asia’s fragmented and fast-moving e-commerce landscape.

A fast-growing consumer class in Asia is keenly attuned to the convenience of buying products and services at the brush of a fingertip – and a gathering momentum for aspirational shopping experiences is forging dynamic new relationships between consumers, brands, retailers and distributors.

Brand owners must confront a shifting commercial backdrop. Across Asia, fierce competition for sales is overlaid by unique market conditions, distinctive customer preferences and price sensitivities, proliferating channel fragmentation and evolving regulatory frameworks.

As a result, e-commerce is becoming more layered – and more complex. No matter the size and scale of your business, the reputation of your brand and products or your target demographic or customer base – the operational realities are changing throughout Asia. Brands plotting new pathways to consumers should think about five key factors when customizing their omni-channel strategy for local and regional market conditions:

 

Nowadays, there is no more B2B or B2C: it’s all human to human. Whether you’re trying to reach an end-consumer (C), an employee (E), an industrial business (B), small business (b) or a professional (P), start with the end in mind and be clear whom you want to reach and how they tick. All customers have needs and look for convenience when choosing channels. Their needs and preferences need to be truly and deeply understood before even thinking how to best reach them.

Brands must know the no-line route-to-market options and adapt to a fragmented mix of offline and online channel competing for customers and sales in different Asian countries. In addition to the various offline channels, key online channels need to be considered. This includes e-retailers, e-resellers or any small and medium-sized merchants that buy products to subsequently resell to end-consumers, e-marketplaces or brand.com.

 

Online businesses are discovering that selling and buying behaviors across channels increasingly overlap. Making sales, processing payments and fulfilling orders with other companies frequently involves a greater variety of digital channels, largely influenced by the ubiquity and ease of use of online interfaces in daily life across Asia.

 

Adding extra complexity, a vibrant informal market exists – notably for fashion, health and beauty products – with consumers purchasing imported items via social media sites set up by individual merchants.

Asian online markets are fluid, fast-moving and competitive – but unique national conditions exist in tandem with regional economic, social and technology-driven trends. Significant differences in GDP per capita and discretionary spending power mean the average online basket size and composition vary considerably from Singapore to Vientiane and Shanghai to Phnom Penh. These factors are overlaid by diverse cultural influences that impact the pace of change in consumer behaviors.

 

Regulatory frameworks differ, too. Several governments are currently redrafting their import tax and consumer laws to take account of new e-commerce business models, while investment incentives are being offered in some countries to fast-track the expansion of critical digital infrastructure.

 

For example, in China’s dynamic B2C economy, integrated marketplaces, such as Alibaba and JD.com, dominate online buying across multiple product categories. In some South East Asian markets, Alibaba-owned Lazada is the leading marketplace, but it competes for online sales with several local players.

 

Category expertise is a critical advantage for selling online in Asian markets – especially as shoppers frequently expect new product offerings. In mature online markets, such as China, e-commerce marketplaces sell everything from industrial machinery to bespoke-packaged chocolates. Meanwhile, established product segments, such as electronics and clothing, have become saturated and new niches, including vitamin supplements and fresh food are emerging as brand battlegrounds.

 

In evolving e-commerce markets, such as Malaysia and Thailand, electronics, fashion and accessories remain the most popular categories. However, as demand patterns migrate from China into South East Asia, buyers are broadening their online horizons into new product segments.

As the future will be no-line H2H, think about the following points when choosing a partner to help you expand in and into Asian markets:

 

  • Can they provide an integrated approach, both at the front and back end?
  • Do they have proven expertise in managing multiple categories across Asian markets and established relationships with e-retailers, online marketplaces and other leading digital players in each country?
  • Can they ensure a flexible and resource-intensive approach to logistics and distribution?
  • Is the operational support adapted to each phase of growth?

Regardless of whether you are seeking to expedite your e-commerce operations across Asia or taking a measured approach by testing a new product or pricing strategy in a particular market – make sure you consider options beyond the obvious.