By now, news of Amazon’s launch in Singapore has spread like wildfire, potentially giving competitors such as Alibaba and Lazada a run for their money. The company launched its Prime Now service in Singapore’s iTunes and Google Play stores. With this new service, customers can place orders for same-day or next-day deliveries.
It is without a doubt that e-commerce companies see Southeast Asia as a lucrative market. According to a 2016 report by Temasek and Google, Southeast Asia’s internet economy is predicted to grow to about US$200 billion by 2025, with most of the growth driven by the ecommerce market over the next 10 years (32%). The ecommerce market is also predicted to reach approximately US$88 billion by 2025. This new trend poses a new challenge for marketers, who now have to think about marketing on a marketplace.
When promoting a new product, marketers traditionally begin with a campaign and theme, before moving on to crafting a press release, according to Eric Heller, CEO and founder for Amazon-focused Marketplace Ignition, which was acquired by WPP earlier this year. However, this method does not generate much demand for platforms such as Amazon.
“There are ways to engage people downstream to buy your products. But Amazon is not like the traditional marketplace where you can keep targeting someone who has bought something and tell them what they might also like,” he added.
One tip would be to build a community within Amazon to create an affinity between the marketplace and a brand.
Brands that sell on marketplaces inherit the traffic and demographics of the platform, and also benefit from being “part and parcel” of its development, Heller said. In order for a brand to be found on Amazon, marketers have to understand what the platform’s users want to buy and the ways they search for a product.
“On marketplaces, it would be better to have strong operations than to have a strong campaign. It would be better to make sure that product is available on the right shelves, than simply use keywords,” Heller said.
It doesn’t matter how smart I am with keywords if my products are not available for purchase.
Choosing the right marketplace
Ken Mandel, president of innovation & commerce, Publicis Media Asia Pacific, said that brands can have “agility” with regards to campaign management and personalisation opportunities by marketing on a marketplace.
“Pure marketplaces can, however, be chaotic for brands as it usually means a less structured environment for them to display their products. This could lead to brand identity dilution if a brand’s products are not featured amongst adjacent brands, especially for consumer electronics and fashion,” Mandel added.
He advises marketers to ensure that the marketplace is “a good fit for their brands” and that their marketing resources are fit for commerce. Mandel also suggests marketers “avoid the temptation” of using similar images for e-commerce marketing and other marketing activities such as print.
Regarding clients with proprietary e-commerce sites who do not see the need to get onto an ecommerce platform such as Amazon or Lazada, Mandel said brands are required to take an “omni-channel approach” and have a presence in the channels that can influence and drive the most sales.
“Multi-branded marketplaces also provide the added benefit of cross-selling opportunities and conquering the customer based of your competition. Marketplaces are where consumers are spending the majority of their time these days, with 55% of consumers beginning their product searches at sites like Amazon versus Google,” he said.
“On top of that, if a consumer is on a marketplace, they’re most probably in the mood to shop, and brands have to learn to leverage that effectively,” he said, adding:
If a brand does not have a presence in a marketplace, they may not be in the consideration set and thus lose out on the consumer’s path to purchase.
Heller advises marketers to be where their customers are. “If someone is an Amazon customer, we should be trying to reach them there separately, specifically in the marketplace space,” he said. He added that even if a brand chooses not to be there, resellers or third party vendors could pop up to sell their products. As such, the brand would have a harder time protecting its image as it would not be marketed or sold with the same level of care.
The readiness of manpower
Expanding into Singapore has been one of the priorities of popular e-commerce companies such as Amazon and Alibaba. Last month, Alibaba invested another US$1 billion in Lazada Group, increasing its stake in the company from 51% to approximately 83%. It also rolled out Tmall World for overseas Chinese citizens in Singapore, Malaysia and Hong Kong.
Anurag Gupta, POSSIBLE’s chief growth officer, attributes this to Singapore being a hub for plenty of businesses, as well as the easiness of hiring skilled individuals who understand marketing and branding.
“The ecosystem has been here over the years, where people are coming from outside, getting educated here and getting exposed. Singapore is way ahead of many governments as they have already emphasised that ecommerce can be a big differentiator,” Gupta said.
Echoing his sentiment is Heller, who added that one of the advantages of Singapore is that it is one of the two English-speaking countries in the Asia Pacific time zone, in addition to Australia. On top of that, Singapore is also in close proximity to the manufacturing sectors in the region such as China.
Satish Meena, senior forecast analyst, Forrester added that the region attracts major online retailers such as Amazon and Alibaba because of its online population of approximately 228 million.
“It is likely that Amazon would like to build on the success they have in the Indian market where they managed to capture significant market share in just three years, due to their superior customer experience and logistics network. We expect that this will be the start of a direct face-off between Amazon and Alibaba in Asia,” Meena said.
Amazon’s launch in Singapore will be “a wake-up call” for retail brands and e-commerce providers in the region, according to Bowan Spanbroek, head of strategy, iProspect Asia Pacific.
“From a consumer perspective, Amazon’s aggressive pricing and superior consumer experience shifted loyalty away from Snapdeal and Flipkart. In a connected and mature ecommerce market like Singapore, change will happen at break-neck speed in terms of consumer adoption,” Spanbroek said.
Brands must prepare for this new platform, beyond just being listed. You need an end-to-end Amazon strategy, including granular marketplace optimisation tactics.
“Brands who attempt this without the right approach or partner will face challenges in competing for consumer attention and loyalty,” he added.