Interactive tech driving growth of SEA digital commerce – Tech Wire Asia

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Livestreaming has helped increase views to the shops of e-merchants, bolstering confidence in digital commerce for this year.

Digital commerce has been consistently doing well amid the worldwide pandemic. Despite its uncertainties, Southeast Asian (SEA) e-merchants are showing encouraging sentiment about their prospects — at least, for the next three months, according to Lazada.

The e-Commerce platform, in a release last week, shared results from a survey conducted on 750 e-merchants on its platform from across various SEA countries. The tech giant based its results on what appears to be the region’s first-ever Digital Commerce Confidence Index (DCCI).

About the digital commerce confidence index 

The DCCI is a business sentiment survey that seeks to map out the perspectives of online sellers in Southeast Asia about the digital commerce industry. At the same time, it unveils the challenges and opportunities faced by their e-sellers.

According to Lazada, the Digital Commerce Confidence Index is scaled from 0 – 100. It measures business confidence by tracking sellers’ views on current online sales performance and expectations about digital commerce in the future. 

The index is on a scale that starts at 0 (“very pessimistic”), to 100 (“very optimistic”).  Sentiments across the board were considered optimistic with a healthy average of 64 points across the six SEA nations polled. 

Interestingly, fashion e-sellers showed the highest confidence in their business prospects for the next three months. Within the first half of the year, 48% of fashion e-sellers saw improvement in their businesses, and 75% expect it to further improve by 10% by this quarter.

(IMG/Lazada)

This trend is similarly seen across all sellers in all polled nations. Over half (52%) experienced high growth in the first half of the year (H1 2021), and 70% expect over 10% growth come the third quarter this year. Out of the 70%, a third (33%) of sellers were extremely confident that their sales volume would increase by more than 30% in the same time period.

What’s driving e-seller digital commerce confidence?

According to Lazada, a key driver of sellers’ positive sentiment could be attributed to significant shifts in Southeast Asian consumers’ consumption habits with greater diversification between online and offline purchases. 

With 47% of consumers reducing their offline purchases and 30% increasing their online spending in 2020, the COVID-19 pandemic has accelerated the expansion of digital commerce and made it a pivotal battleground for sellers looking to scale up their businesses.   

“Vaccination programs have had a significant effect and platforms have witnessed fashion bounce back with 70%+ growth in Q2 from Q1 in some categories, mostly apparel,” said Roshan Raj, Partner of Redseer. 

While strong growth momentum was generally recorded across all retail categories, sellers from the electronics and fast-moving consumer goods (FMCG) categories appeared to be the biggest beneficiaries of a stay-at-home economy, with 53% reporting stronger business growth in H1 2021.  

How e-merchants can leverage tech to further boost sales

Recent trends have shown that online shoppers prefer ‘shoppertainment’ — a portmanteau of shopper and entertainment. 

According to Hakim Mehmood, GM of Voice and Video at cloud communications provider Twilio, the “rise of virtual experiences and the popularity of platforms like Clubhouse, and TikTok have signaled that the next big channel for customer engagement is live audio and video streaming.”

And this is true for Lazada’s e-merchants — according to Raj, livestreaming has been a big boost to many sellers. This is because it creates an interactive environment for consumers to shop in. 

According to Lazada, within a highly saturated e-Commerce environment, competition among online sellers no longer occurs under a simplistic framework of price wars.

Instead, it has evolved to take on an additional dimension where technology-driven customer engagement serves as a differentiating factor for many sellers.

“The interactions between sellers and buyers are important drivers for fashion as the segment is C2C [customer-to-customer] and requires a strong element of trust-building via interactions”, added Raj.

Top 3 opportunity areas for digital commerce scaling, according to Lazada (IMG/ Lazada)

Top 3 opportunity areas for digital commerce scaling, according to Lazada (IMG/ Lazada)

However, with the recent surge of Covid-19 cases in Southeast Asia, he also anticipated that “the expectations from fashion sellers might see some moderation in the near future.” 

Aside from interactive methods, respondents also shared that the key enabler of business growth was the ability to harness data insights. Additionally, developing a unique and differentiated offering drives more user traffic.





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