Change is inevitable. Time and time again, particularly in the technology and commerce industries, it has been proven that to stay stagnant is to risk failure.
Remaining agile to avoid losing out to competitors who are better equipped to deal with changing trends should be a priority for most businesses. However, when change is so unpredictable, it becomes a lot more difficult to plan for.
This was the landscape that we have seen over the past few years: From the craziness of 2020, to the challenges faced in 2021 — in particular, e-commerce sellers in Southeast Asia were kept on their toes throughout the year — and meeting the many varied and unique economies in the region.
With so many unknowns ahead, e-commerce sellers still need to think ahead and understand the nuances of the markets they operate in, while preparing to again rewrite the playbook at a moment’s notice.
To assist in dealing with the many unknowns, here are some trends that are likely to shape the e-commerce industry this year.
The rise of the omnichannel purchasing journey
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E-commerce ecosystems will continue to evolve as digital payments become a preferred payment method. Buyers across Southeast Asia are getting more sophisticated in their purchasing journeys, with around 80% utilising online channels during the discovery and evaluation stages.
Digital adoption trends we have seen advance throughout the pandemic will likely remain as cultural mainstays. Physical and digital experiences will continue to integrate and further work to complement each other. As such, businesses will need to adapt their payment methods to accommodate these industry changes without jeopardising the overall customer experience.
This complexity will be further exacerbated as economies begin to re-open. With an expected resurgence of physical retail (to some degree) in the near future, e-commerce sellers will need to be able to adapt accordingly by implementing payment methods that can accommodate an omnichannel commerce experience.
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On top of this, consumers are becoming increasingly demanding for solutions that go beyond simple payment options, including pre-paid cards, real-time payment acceptance, credit solutions and a frictionless checkout experience.
In the end, customer experience is king. Having a wide range of payment solution offerings will allow sellers and merchants to better align with the varied and unique needs of their customers, resulting in a better experience overall.
E-commerce sellers should expect that traditional purchasing channels, both digital and physical, will need to be continually upgraded with new technology and solutions, and it is important that they remain abreast of these trends to remain competitive.
Collaboration of marketplaces
A huge change in purchasing behaviour has been driven by the battle of the “super apps” in Southeast Asia. Players such as Grab and GoTo now command market share across a wide set of e-commerce industry verticals. The latter — which combines Gojek’s customer experience, geo- graphic reach and payment choice with Tokopedia’s pricing, product selection and logistical support — is a perfect example of the many potential extensions of the traditional e-commerce model.
Adopting a marketplace, particularly those that have consolidated to create a “super app” like GoTo, also brings the advantages of giving businesses additional peace of mind and flexibility. By offering a loyal customer base that can be quickly tapped into, marketplaces can allow savvy e-commerce sellers to piggyback on this regionalised, end-to-end approach.
These large marketplace ecosystems will also help to address common infrastructure and logistics pain points, particularly within developing economies like Indonesia, the Philippines and Vietnam. Having a robust and trusted marketplace partner will help eliminate these issues to some extent, helping sellers tap into existing infrastructure to support last-mile delivery.
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The diminishing role of cash in Southeast Asia
While many countries in the region still have a relatively low penetration of credit cards and traditional bank accounts, real-time payment solutions have become a widely popular alternative solution. This is in part due to the high saturation of mobile usage in the region.
As the region is becoming rapidly digitalised, so too are consumer preferences, with Southeast Asia boasting the fastest-growing e-Wallet market in the world. Providers like GCash in the Philippines are seeing a huge surge in popularity by offering an alternative to traditional payment systems that resonates with local consumer habits.
As these wallets become more entrenched in the commerce ecosystem, we will start to see more collaboration between marketplace platforms and wallets to target consumer spending across multiple categories. Both sellers and merchants should already be adapting to recognise this trend and making the necessary adjustments to recognise and capture the region’s changing customer preferences.
Digital lending as a cornerstone for online purchasing behaviours
The Covid-19 pandemic has normalised the digitalisation of everyday experiences, thereby completely changing shopping behaviours. Purchasing behaviours — which are inherently linked to the more frequent utilisation of digital platforms and e-commerce marketplaces — are now driving the adoption of digital payments, and by extension, digital lending, which has grown exponentially because of this.
Credit solutions such as Buy-Now- Pay-Later (BNPL) have already taken off, particularly within the tech-savvy generations such as Gen Z and Millennials. As businesses continue to recognise and address these changes to purchasing behaviour, we will continue to see a greater array of digital lending choices emerge for consumers. The competition will inevitably heat up for e-commerce sellers to provide the best lending services to potential customers.
On the other end, many providers are offering upfront capital advancements, allowing e-commerce sellers to maintain sufficient funds for day-to-day operations while taking advantage of opportunities to inject capital into their business where it matters most.
While access to working capital is no new challenge for e-commerce sellers, we have seen unprecedented supply chain and logistics disruptions — coupled with swift changes in demand — making it harder than ever to manage cash flow and plan ahead. Taking advantage of this sort of capital solution will be critical for many e-commerce sellers, particularly smaller ones, to remain competitive in these turbulent times.
Overall, as hard as it is to predict the nature of e-commerce over the next 12 months, sellers can prepare themselves by listening closely to the demands of consumers, keeping up with ever-moving trends in the space, and ensuring they are maximising the technology and solutions available to them.
Streamlining the customer journey by keeping up with the latest technology remains one of the most important factors for e-commerce sellers’ success. By increasing their exposure to the changing trends, they increase their likelihood of standing out in the ultra-competitive Southeast Asian landscape and prevent themselves from falling by the wayside to those able and willing to embrace the new, digital economy.
Nagesh Devata is the regional SVP for GTM APAC at Payoneer
Photo: Unsplash
