Amid the pandemic, buying as we knew it changed. Forced indoors, many shifted to buying online. Necessities which were usually bought during weekly visits to nearby department stores, shifted to being ordered online. Even mom and pop shops resorted to managing payments using digital payments, particularly via QR codes.
A recently released report by Meta and Bain & Company, details the digital consumer journey in Southeast Asia.
Post the pandemic, digital shoppers are seen moving fluidly between online and offline buying in the region. For both essential and non-essential products, consumers are using a mix of both online and offline mediums to discover and evaluate a product. In the case of non-essential goods, most customers find their products online.
Exhibit 1: Non-essential category buying journey
Meanwhile, in the case of essential goods, a significant portion of the purchases are made offline from physical stores. The report also indicates that of essential goods buyers—particularly grocery buyers—9% have shifted back to offline buying.
Exhibit 2: Essential category buying journey
Some of the top reasons for shifting offline are to experience the look and feel of the product and test the quality of the product, while avoiding delivery charges.
More consumers in the region are switching brands in 2022 versus 2021. Better value followed by better product are the top two reasons they cite. Products such as clothing in non-essential category and baby care in essentials category see the most jump.
Exhibit 3: Brand-switching edging up especially for non-essentials
Video consumption increases
Watching videos is now a top online activity in the region. Average daily screen time has increased from 46.5 minutes to 64.5 minutes between 2021 to 2022 – a CAGR of 39%. This has provided brands with a novel platform to engage its customers. One in three rank video as one of their top 3 channels to discover and evaluate products.
Exhibit 4: Respondents ranking video as the most used channel in consumer journey (%)
This increasing shift to watching videos has also given rise to the Asian creator economy. “The creator economy is growing phenomenally, below the radar—it’s amazing. Small (and traditionally offline) businesses are leading the charge in this channel,” said Gaurav Gupta, chief marketing officer & integration leader at Kimberly Clark Softex.
The need to evolve
The macroeconomic headwinds coupled with changing digital habits, should make business take stock and plan their next course of action in this post-pandemic era. The report suggests some actions that businesses can take. They are:
- The region’s consumption value is expected to reach $4.5 trillion by 2030, businesses should not miss this opportunity and maintain the course of investment and business development in the region
- Businesses should tackle inflation through strategies such as better pricing; redefining their value proposition; and reduce costs through enhanced procurement strategies and supply chain reinvention
- Change their supply chain strategy from global and lean to more resilient, sustainable and responsive operations
- Businesses should build an integrated channel strategy that brings together a mix of online and offline channels to ensure a seamless customer journey
- Businesses should be prepared for a new retail sector, a decade from now; that which will transform mobile screens as the new storefront, with AI setting prices for products and managing inventory of products
- Businesses must streamline their operating model, ensuring to constantly assess better ways to source, organise, manage and retain talent