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The Thread: What we can learn from m-commerce in Asia

24/10/2018

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WeChat is now a vital channel for brands to market themselves in China.

WeChat is now a vital channel for brands to market themselves in China.

Despite some slow-down in growth, online is still going strong and has become a vital channel for fashion retailers - particularly given recent irregular weather patterns. The latest data from Kantar Worldpanel shows that 27% of sales in the UK fashion market now come from the online channel, which is growing at 5.8% year on year in the latest period*. On top of this, growth of 5% is projected for next year, according to our newly-launched projection capability ‘Fashion Forward’. By contrast, bricks-and-mortar sales are likely to decline at 3%, with slim chance of a reversal of fortunes**.

Potential for innovation

Undoubtedly, online is no longer just an addition to the traditional retail format, but an essential channel for retailers to reach their target shoppers, and few players out there can afford to overlook this area. While e-commerce has long been the norm in the UK, it sees the highest penetration on the other side of the globe, with 7.3% of FMCG sales coming from online in Asia compared with 5.6% in Western Europe. This is largely due to the soaring rate of mobile phone usage in Asia, thanks to low cost phone packages and a lack of PC infrastructure. Indeed, by the end of 2019, the world’s most populous continent with a total population of 4.5 billion people*** is projected to have a mobile penetration of 59.9%.

With this huge potential comes great innovation – m-commerce in Asia is doing much more than just providing a platform for browsing and purchasing products on a mobile phone. Instead, consumers are able to create their own omni-channel purchase journey through ‘Social Commerce’. With apps that have instant messaging and mobile payments rolled into one place, consumers can get additional information, place orders, make payments and track their orders in real time. Social apps such as Facebook, WhatsApp and WeChat heavily dominate mobile activity in Asia, and have turned into important touchpoints enabling m-commerce to develop.

Seamless integration

WeChat, for instance, is now a vital channel for brands to market themselves in China. Luxury giants such as Burberry and Chanel have their own ‘subscription accounts’ on the platform where shoppers can see their campaigns, get product information, access shoppable links and even watch the runway. And it’s not just in fashion; mobile is woven into the fabric of life in Asia, driven by convenience and consumer demand. From grocery delivery services on the messaging app ‘Line’ in Thailand, to the incident reporting app ‘Qlue’ launched by the Jakarta government, this is driven not just by individuals and retailers but also official bodies. In the UK, evidence shows that we are lagging behind, with headlines such as ‘App for EU citizens Brexit registration won’t work on iPhones, Government admits’**** demonstrating that we’re still far from the seamless integration seen in Asia.

However, this in no way means that retailers in the UK should simply replicate apps that work well in Asia and hope they will be welcomed by local consumers. While apps like WeChat have functionality that satisfies their users’ complex needs, it is important for UK retailers to understand their shoppers and tailor the offering to their requirements. This challenges businesses not just to innovate, but to put themselves in their customers’ shoes in order to address the barriers they may be experiencing with e-commerce. If consumers are concerned about not being able to get the items immediately, next day delivery is certainly the answer. But as these benefits become more common, those retailers which excel at uncovering consumers’ needs will be able to better engage with them.

Get the basics right

It goes without saying that providing a “best in class” experience is key to appealing to shoppers, but retailers must first ensure they get the basics right and strive to keep their promises. In the case of next day delivery, though this is generally seen as a plus, it can have a doubly negative effect on the retailer’s reputation if it fails to meet expectations, and the same applies to ethics issues. If the basic offerings are up to standard, those extra miles retailers take will have more impact, and be more effective in driving shopper loyalty. An example of this is Go Jek, a Jakarta-based company specialising in transportation and logistics, which encourages users to customize their app by selecting from a wide range of available services, in order to aid the perception that the app is more than simply an off-the-shelf platform they are given to use. While this is just one way to personalise how a shopper interacts with you, with the right strategy, retailers can turn consumers’ online experience into more than just a shopping journey, and find real growth through e-commerce.

* Kantar Worldpanel, Total Fashion, 52 weeks to 26th August 2018
** Fashion Forward: Online vs. Offline forecasted growth for 2019
*** World Population Review: Asia Population 2018
**** The Independent, retrieved 18/10/2018  

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Corona Chen
Client Executive - Fashion

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