Global e-commerce sales are expected to reach US$8.1 trillion by 2026, up 56% from US$5.2 trillion in 2021. And while China has the largest e-commerce market in the world today, Southeast Asia is growing at the fastest rate. Ecommerce sales in Southeast Asia will increase by $15.31 billion over last year, a growth rate that outranks the rest of the world by some distance.

E-commerce is thriving in the region due to high internet penetration rates, favourable demographics, and economic growth. In coming years, as more people become smart shoppers and come online, there will be even greater demand for new ways to conduct e-commerce – shoppers want convenience and speed, as well as products and services designed around their preferences to make their lives more convenient and enjoyable. 

At Baozun Asia, we are constantly on the lookout for new ways to help brands understand these shifting consumer habits so they can stay ahead of the curve. Let’s take a look at some of the key trends impacting consumer preferences in Southeast Asia today:

 

A pressing demand for omnichannel experiences 

The path to purchase is becoming more complex and multi-faceted as consumers connect with brands across multiple touchpoints. As a result, expectations of and around omnichannel experiences have become the new standard for brands and retailers.

Today, 60% of global shoppers prefer to shop with a retailer or brand with both digital and physical stores. But having an omnichannel strategy involves more than just having a presence online and offline.

The key to building omnichannel capabilities is to unify multiple touchpoints, multiple channels, and multiple backend systems to create seamless shopping experiences for customers. 

This is because today, consumers want to be able to shop across devices and platforms, discover and compare products online and then go to stores to "touch and feel" the products before purchasing. They want to receive their orders quickly, return them conveniently offline, and choose between e-wallets, cryptocurrencies, and buy-now-pay-later financing when making purchases. Finally, their experience should be personalised and come with a high level of customer service. 

This trend is good news for brands. Omnichannel consumers are more likely to visit more frequently and spend more. Investing in technology that can support omnichannel experiences also allows brands to enter new markets quickly, improve the agility and efficiency of their business, and make better decisions through data-driven insights. 

 

Consumers are increasingly selective, experimental and value-conscious   

Many first-time consumers in Southeast Asia discover online shopping because of Mega Sales Days like 11.11 Singles' Day, Black Friday, and Cyber Monday that entice people to try new brands and products as a result of highly advertised and promoted sales.  

Southeast Asian consumers are discovery-led, which means they spend time researching new brands and products online. They look for good deals on social media, often through video content. And while pricing is important, preferences can vary. Conscious shoppers, for example, may be willing to pay more for brands that promote sustainable shopping that does not harm the environment whereas others may choose to use buy-now-pay-later to maximise their spending. 

As a result, consumers are more willing to switch between brands in search of better value, service, and delivery. This brand-switching behaviour is more noticeable with non-essential products such as clothing and cosmetics, leading to an influx of small players entering the e-commerce market to capitalise on the trend. With the right marketing strategies, these mega-shopping events can be a valuable opportunity for brands to acquire new customers and grow their business. 

 

Gen Z is shaping the future of retail 

Generation Z (Gen Z) is a digitally native generation growing up in a technologically advanced world, and increasingly their preferences are shaping the future of retail. 

Gen Z shoppers tend to choose brands that reflect their personality and uniqueness and use social media to learn, shop, and entertain. They are also significantly influenced by their consumption of video content on social platforms such as YouTube and TikTok, for example. They also rely on product reviews and word-of-mouth recommendations to guide their purchase decisions. 

Environmental, Social and Governance (ESG) are hugely important to them and they expect brands to do more than just a great product or service. Beyond that, creating personalised customer experiences that emphasise individuality will help brands win over this mobile-first, culturally influential generation. 

 

What does this mean for brands and retailers?  

To succeed in this new operating environment, brands and retailers must re-evaluate their investment and innovation strategies as well as rethink their marketing strategies to attract and convert the new generation of digital shoppers. 

JD.com for example recently launched their Green Impact Initiative, which involved green-labelling one million types of products to make it easier for their customers to shop for 'green' products on their app. In another instance, Alibaba offered extra discounts and vouchers for its new ‘green’ vertical during its last 11.11 campaign, which resulted in over 2.5 million customers buying green products. 

Brands that prioritise consumer preferences like the desire to shop sustainably could reap handsome rewards. But having a strong omnichannel strategy is key, from digitising operations for online-to-offline integration, to investing in data and analytics to help shape an informed strategy and approach. 

Brands that adopt an omnichannel approach are more likely to empower not only their customers, but their sales team (online and offline) by opening access to information such as product availability, or speeding up the delivery times with optimized inventory allocation. Importantly, omnichannel strategies can also help brands overcome any unforeseen market conditions and meet their customers’ needs, whoever and wherever they may be.

 

Learn how Baozun Asia’s team of local digital experts can help you better understand your customers, develop the right strategies and invest in the right technology to win in this new era of digital commerce. 

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