In the dynamic world of omnichannel retail, businesses confront numerous challenges:

• Evolving consumer expectations
• The necessity for seamless online and offline integration
• The demand for transformative strategies

To remain competitive, retailers need to adjust to the changing landscape, even if it requires altering their business model.

Lucy shares invaluable insights on omnichannel retailing strategies, from pioneering personalised marketing to the seamless integration of consumer data analytics. Discover how Baozun stays ahead in this dynamic industry and harnesses the power of technology to deliver unparalleled customer experiences.

 

About Lucy Feng

Lucy is our Vice President of IT Commercialisation at Baozun with over 18 years of experience, including 17 years at Deloitte Consulting as a strategy and operation business partner. Since joining Baozun, her strategic acumen and profound eCommerce expertise have been instrumental in propelling Baozun forward.

 

Omnichannel Retailing: The Future of Retail in China

Embrace the future of retail with omnichannel strategies. Seamlessly integrating online and offline channels, omnichannel retailing aims to provide customers with a smooth shopping experience across various touchpoints. This includes providing customers with the ability to research products, make purchases, and receive support through any channel they prefer.

This strategy is becoming increasingly important in China and Southeast Asia, as consumers increasingly use multiple channels for their shopping experience. Here are three reasons why the adoption of this strategy is crucial moving forward:

1. Market Growth is Slowing Down in China

China's market growth is entering a new phase of stability. After a decade of rapid expansion, the online business penetration rate has peaked.

In sectors like fashion and consumer electronics, the online business share is plateauing at 40-50%. Even the luxury goods industry has experienced a notable shift, with the online business share at 20%. The current landscape signals a need to adapt to the changing market dynamics for new growth.

2. eCommerce Market is Becoming More Fragmented

Marketplace-wise, Tmall has been the dominant marketplace. However, JD, Douyin, Redbook, and the brand’s private domains, such as mini-programmes in WeChat, have experienced higher growth in recent years.

Since last year, marketplaces have been aggressively transforming. The competition dynamics are becoming more complex.

Tmall is investing in developing content and live streaming capabilities. On the other hand, JD is broadening its product categories and offering more customisation. Douyin is fast-tracking its eCommerce capabilities and launched Douyin Mall. It’s poised to be a new channel for revenue in the coming years.

3. Offline Businesses Still Dominates The Market

In China's retail landscape, offline businesses continue to dominate with 70% of total business, while online businesses contribute 30%. This market dynamic reflects the complexity and diversification of today’s business models, with emerging consumption paths such as "offline plus online," "public domain plus private domain," and "short videos plus live streaming."

As the market evolves, businesses are exploring innovative approaches that bridge the gap between offline and online realms, embracing new opportunities for growth and customer engagement.

 

Challenges in Building Omnichannel Businesses

In the past 10 years, brands are making huge efforts to build up their online business across multiple channels to capture the booming growth. However, the entire retail business in China is made up of multiple siloed businesses and backend operations, including systems and data that are also siloed across channels.

This lack of integration and coordination poses hurdles for brands striving to establish a cohesive omnichannel retail model. However, these challenges also present a unique opportunity to build a new, integrated omnichannel framework that addresses the existing gaps and leverages the potential of seamless customer experiences across multiple touchpoints.

The China market shows potential in adopting an omnichannel retail model, while the SEA region presents its own distinct challenges and opportunities. Adapting the omnichannel strategy requires a nuanced understanding of each market’s unique characteristics and preferences.

 

The Difference Between The Chinese and Southeast Asian eCommerce Landscape

In comparing the eCommerce landscapes of China and Southeast Asia, several key differences come to light. Firstly, China’s eCommerce market has reached a higher level of maturity, boasting a greater penetration rate and well-established marketplaces. In contrast, Southeast Asia is still in a phase of growth and development as it builds its eCommerce ecosystem.

Another significant difference is the market fragmentation between the two markets. China has dominant marketplaces and private domains, creating a more consolidated landscape. In contrast, Southeast Asia has a fragmented marketplace with varying platform dominance across countries, offering both challenges and opportunities for retailers.

Moreover, consumer behaviour and preferences differ between China and Southeast Asia, impacting the success of omnichannel strategies. Cultural, economic, and demographic factors play a crucial role in shaping consumer expectations and shopping habits. As a result, tailored approaches are essential to ensure the desired market effect.

To thrive in diverse markets, retailers must adapt to cultural nuances and incorporate them into their strategies. This includes considering economic factors and designing pricing strategies that align with the target market's purchasing power. By recognising the disparities between the two markets, retailers can tailor their strategies accordingly, leveraging the unique dynamics of each region to drive success in their respective omnichannel endeavours.

 

Southeast Asian Businesses Adopting Omnichannel Retailing

As the eCommerce and omnichannel sectors in Southeast Asia continue to gain momentum, businesses in the region have a golden opportunity to explore and embrace successful models from the more mature Chinese market.

By taking inspiration from strategies such as harnessing private domains, seamlessly integrating online and offline channels, and leveraging the power of live streaming and content creation, Southeast Asian retailers can unlock new avenues for customer engagement and growth.

With increasing smartphone adoption and a rising number of online shoppers, the stage is set for retailers to expand their presence in untapped markets and captivate a broader consumer base.

Southeast Asia is projected to witness a surge in digital users, including a staggering 310.9 million internet users by 2023 and a remarkable smartphone adoption rate of 88.9%, the stage is set for retailers to tap into this vast market. This presents an array of opportunities for retailers to expand their reach into new markets and tap into a broader consumer base.

However, navigating the diverse geography and infrastructure of the region presents unique challenges that require innovative solutions for streamlined logistics and efficient delivery. By embracing these challenges head-on, Southeast Asian businesses can pave the way for a remarkable omnichannel future that drives brand-customer success.

 

Baozun: Redefining Omnichannel Retailing in Southeast Asia

As a visionary leader in omnichannel strategies in China, Baozun drives the vision of delivering an unparalleled customer experience and capitalising on the vast opportunities in the Southeast Asian market.

We are leading with OMO (online merge offline) approach through WeChat mini-programmes. This includes establishing dedicated online mini-programme stores for each offline location, enabling brands to extend their sales capabilities online and seamlessly connect with customers.

Moreover, Baozun leverages mini-programmes to elevate the offline customer experience. This allows sales associates to use 1-on-1 live streaming to showcase and sell products, creating a more engaging and personalised experience for customers.

With a customer-centric approach and innovative solutions, Baozun empowers brands to unlock the full potential of the Southeast Asian market, captivate customers across channels, and propel their businesses to new heights of success.

 

Key Considerations for Successful Omnichannel Implementation:

1. Clearly define the omnichannel strategy and define the position of each channel in serving brand marketing objectives, fan engagement, sales or conversion, and customer engagement.

2. Optimise the ability to quickly expand into new channels and focus on channel innovation to increase traffic growth. BOCDOP (Baozun Omni-Channel Digital Operation Platform) is the centrepiece of our efforts to penetrate the rapidly growing omnichannel eCommerce market in Southeast Asia.

With over 30 major domestic eCommerce platforms integrated, BOCDOP offers essential omnichannel solutions, including streamlined order management, integrated customer relationship management, unified customer profiles, centralised product management, and A.I. empowered data analytics.

3. By integrating omnichannel operations into one system, enterprises can leverage the centralised console for managing product information across different channels. This leads to enhanced accuracy and efficiency in tracking inventory turnover and real-time orders, optimising order routing and boosting customer satisfaction.

4. Maximise the value of the customer's lifecycle with integrated data from various channels. Through our bespoke platform, businesses can consolidate customer information into a single profile and access higher level insights into customer behaviours and facilitate personalised communications.

Brands can optimise interactions, implement targeted marketing, and enhance engagement strategies based on taste and preferences. Hence, creating tailored experiences throughout the customer journey.

5. Achieve unified operation data across channels and businesses. Establishing a data centre enables effective collection, processing, and analysis of data, leading to enhanced visibility and informed decision-making.

This data-driven approach enhances business visibility, facilitates decision-making, and enables the development of customer and product data analytics engines, empowering Southeast Asian retailers with business intelligence capabilities.

 

Conclusion

As the retail landscape in China and Southeast Asia undergoes rapid transformation, the importance of embracing omnichannel strategies becomes increasingly evident. By seamlessly integrating online and offline channels, leveraging technology and data analytics, and prioritising exceptional customer experiences, businesses can thrive and gain a competitive edge.

The ability to navigate the complexities of diverse markets, adapt to cultural nuances, and tailor strategies to meet specific market demands will be key to achieving sustainable growth and redefining success in omnichannel retailing.

Connect with us today to explore tailored solutions for adopting effective omnichannel retailing strategies that propel your business forward.

Read Less...