E-Commerce Strategy for ASEAN Markets
Decoding the ‘Private Message’ Culture
E-commerce vendors expanding into Southeast Asia need a unique sales model for each country. Increasingly, Southeast Asians living in Taiwan and Southeast Asian online celebrities are emerging as the key to social media-based e-commerce.
Decoding the ‘Private Message’ CultureBy Lucy Chao
From CommonWealth Magazine (vol. 640 )
E-commerce is still in the fledgling stage in Southeast Asia. Most consumers still habitually shop in brick-and-mortar stores where they can see and touch the products. Many harbor doubts about the security and trustworthiness of online shopping platforms.
Aside from trust issues, internet infrastructure is still relatively undeveloped in some Southeast Asian countries. Little bandwidth and slow internet speeds make browsing on mobile devices a tedious affair as images downloads are slow or full of errors, hampering local e-commerce development.
A survey by international consulting firm PwC indicated that consumers in Southeast Asia favor shopping via mobile phone and social media apps more than consumers in other countries.
If consumers don’t trust e-commerce platforms, finding the right product online is as difficult as looking for a needle in a haystack. However, since mobile phone use is widespread, Southeast Asian consumers are much more open to shopping in the social media world through apps such as Instagram, Facebook or Line.
“The biggest obstacle to online shopping for Southeast Asian consumers is [the lack of] trust,” observes Tai Fan-chen, deputy head of the Commerce Technology Application Research Division of the Commerce Development Research Institute (CDRI).
Although each country has a distinct culture and background, Tai says, Southeast Asian nations have one point in common - they all greatly value personal contact.
Therefore, social media platforms that provide such a “human touch” are very popular and an important channel for reaching out to potential customers. Comparable to direct selling, this type of e-commerce model exploits interpersonal relationships to generate profits or entice people into making a purchase.
When you ask Taiwanese and Malaysian e-commerce companies what is indispensable to know when one wants to be successful in the Southeast Asian market, they will inevitably tell you: Private message or chat room economy.
What is Meant by Private Message Culture?
Private message culture means that customers use social media platforms and messaging apps to ask all kinds of questions about a product before they decide to place an order.
They inquire about product features such as size, measurements and price, or want to know how to place an order: how to navigate the site, make a money transfer, accept a delivery, and so on. While online shoppers in Taiwan are used to these logistics processes from order to delivery, inexplicable problems can crop up anywhere along the way in Southeast Asia.
“What occurs most often is that people ask you how to place an order; people here are used to letting you help them order,” explains Zhi Qing Wong, a customer representative at the Malaysian subsidiary of Taiwanese cosmetics company All Young.
“Many people are lazy,” remarks Ng Shern Yau, co-founder and COO of Hong Kong-based Logistics Worldwide Express (LWE), which uses Malaysia as its logistics and customer service hub. Ng points out that some people get in touch not to ask the price, but rather to haggle about the price, which would not be possible if they order through a website. “Malaysians like to haggle,” notes Ng.
Consumers in different markets also differ. Shoppers in the Philippines tend to be impulse buyers, whereas Malaysian consumers tend to hesitate and think over purchase decisions for some time.
“They love chatting; I once spent an hour answering a customer's questions, but he waited a month before placing his order,” recalls Eng Sin Yee, customer representative at Taiwanese online cosmetics and body care retailer Shopping99.
Taiwanese online cosmetics and body care retailer Shopping99 (Image: Chieh-Ying Chiu)
Hsu Yi-chih, general manager of Vacanza Accessory, a jewelry vendor who is also active in Malaysia and Vietnam, points out that communication with new customers is time-consuming and therefore costly. Consumers expect an exchange of several private messages, and even after all their questions have been answered, they do not necessarily make a purchase. “They want to chat with you to confirm that you are a real person,” Hsu points out. (Read: Appealing to Southeast Asian Markets with Taiwanese Quality)
In Taiwan, online vendors often use endorsements by Internet stars or manage social media communities because this has proven the most effective approach for building reputation and trustworthiness in Southeast Asia.
Southeast Asian Graduates in Taiwan Manage Social Media Communities
Shopping99 counts among the Taiwanese online vendors who expanded into overseas markets at an early date. Last summer, the company made a second attempt to win the Malaysian market, relying on Malaysians living in Taiwan to manage social media communities in their home country from Taiwan.
Shopping99 co-founder and chief marketing manager Sharon Peng has hired Malaysians who graduated from universities in Taiwan and put them in charge of marketing, social media, customer service and promotional live broadcasts because they know best how to communicate with Malaysian consumers.
A mobile phone, two hosts, three products and four spotlights are all it takes to get rolling for a live broadcast on the latest must-have beauty products sold on Shopping99.
Live broadcast with 'human interaction' is very helpful in terms of branding and selling in South East Asian countries, where people usually have less trust in the internet. (Image: Chieh-Ying Chiu)
“You definitely won’t find this in Malaysia…,” the two Malaysian hosts, Fang Wan-yi and Huang Hsin-yi, tell their live audience. The pair, who speak Mandarin, English and Cantonese aside from their mother tongue Malay, smoothly switch from one language to another when introducing products. During the broadcast, they occasionally respond to online messages from viewers.
The live broadcasts take place two to three times per week lasting 20 minutes to half an hour. During the program, Fang and Huang not only advertise the products but also present life in Taiwan. They once did a live broadcast from an Ay-Chung Flour-Rice Noodles outlet, and also filmed an episode comparing different bubble milk teas.
“We don’t do live broadcasts only to sell stuff; sometimes it is to build brand recognition and intimacy,” notes Peng. The broadcasts help convince customers that Shopping99 is a legitimate shopping website and enlivens the fan community so that people ask questions when they consider a purchase.
Aside from managing their own social media communities, the fastest way for companies to boost their brands is to directly partner with online influencers who take advantage of their popularity and their fans’ trust to feature products in their videos.
Teaming Up with Internet Celebrities
“Online celebrities and online models are not the same. Online celebrities must have their own ideals. What we are doing now is steering online celebrities’ focus away from simply viewer numbers to gaining their viewers’ trust,” explains Kokee Lau, general manager Greater China for Malaysian online artist management agency Red People. Taiwanese online cosmetics retailer 86shop collaborates with Red People to boost the site’s popularity in Malaysia through online influencers.
'Driftprincess Ashley', a famous Malaysian online celebrity who can earn close to 10 million NTD annually working with e-commerse companies.
Shopping99 also once invited Philippine online celebrity Sachzna Laparan, who has more than a million followers, to Taiwan. During the four-days, three-night trip she not only promoted products in live broadcasts but also food and fun activities in Taiwan, which greatly boosted interaction with her fans.
Marketing by Compatriots Engenders More Trust
Another trend that has recently emerged is Taiwanese companies collaborating with Southeast Asian social media influencers who live in Taiwan to promote their products among migrant workers and immigrants from Southeast Asia.
Indonesian national Anny Ting has lived in Taiwan for 16 years. She is well-known among Taiwan’s Indonesian community as the host of an award-winning radio program. Ting also works as a translator, voice-over artist and, most recently, in a new capacity as live broadcast celebrity.
As a Muslim, Ting often wears a headscarf. She is known for her acute fashion sense and ability to pick the right colors, and is often asked where she buys her headscarves.
“Sister, I want to buy the same scarf as yours,” is a request Ting often hears from migrant workers.
Last October, a Taiwanese headscarf maker asked Ting to present their products. So she launched live broadcasts on social media such as Facebook and Line promoting cosmetics, health and body care, make-up brushes and wireless karaoke microphones, eliciting an overwhelming response from her audience.
Ting reveals that of all the products she has endorsed, the headscarves have so far proven most popular, while clothing and body care are also selling well. On average, customers spend between NT$1,000 and NT$2,000 per purchase. Clearly, this is a previously overlooked market segment.
Ting is convinced that “trust” is the key reason why her live broadcasts became a success. “Because I used to be a migrant worker, the Indonesians in Taiwan feel that I am one of them,” she notes.
Evidently, understanding the market, localizing marketing and building trust among consumers are the keys to e-commerce success in Southeast Asia.
Translated from the Chinese article by Susanne Ganz