If you’ve assumed that COVID-19 has been a boost for the e-commerce sector, you’d be right … sort of. For one thing, it does depend on the specific business segment – retail and marketplace sites are doing reasonably well, travel sites less so. That said, even retail sites are seeing shift in consumer behaviour that are messing with their growth projections.
The COVID-19 pandemic has impacted different markets in different ways across Asia. However, a recent online panel hosted by Criteo revealed that a common outcome for e-commerce players is that it’s forced players to shift their marketing priorities from promotions and growth to customer service. And big data has been instrumental in helping them do just that.
Sachin Kapur, senior director of marketing at Coupang in South Korea, says that as COVID-19 has spread, social distancing and remote working has become more commonplace, whether by government decree or people simply exercising more caution.
“After COVID hit, there has a natural increase in demand across e-commerce – not only in Korea but across the world,” Kapur says.
Duc Pham, head of marketing at Vietnamese marketplace site Sendo, says that after the government sent out text messages telling everyone to stay at home and shop online for “essentials”, most people did just that.
“There was very big demand for face masks and after that rice, food and groceries,” he says. “So we’ve been actively looking for suppliers and also talking with the big multinational brands like Unilever and P&G to deliver essential products to our customers.”
Anugrah Mardi Honesty, head of display marketing at Indonesian online retailer Bukalapak, said his company is also seeing online shopping trends shift from high-value goods like electronics to lower-priced essentials, though he adds that doesn’t mean people are overall spending less money.
“It’s true that essentials are cheaper than the other segments but the thing is when people buy essential things, they tend to buy them more frequently,” he says.
Kapur of Coupang adds that while increase in demand is ostensibly a good thing, the tradeoff was the challenge of keeping up with customer expectations on timely delivery of their purchases.
“Our promise to the customer is very important from a brand perspective – the customer believes in us to deliver their products in time,” Kapur explains. “So we had to really focus all our energies on our logistics programs in terms of routes, employee safety and hygiene, so that we can delivering as many packets as fast and as safely possible, and be proactive in telling customers that there might be some delays if we see a big spike in demand. So from an organization perspective. all our focus and energy was diverted towards logistics – everything else took a back seat.”
Not unexpectedly, online travel agencies like Indonesia’s Tiket.com have had the opposite problem in terms of demand.
“As you might know, business travel right now is very low. So the last two months have hurt our business – we’re coming from probably triple digit growth to probably minus right now,” says Dyah Wulandari, Tiket.com’s VP of performance marketing.
Consequently, she says, the business focus has shifted to making things as easy as possible for customers and business partners to deal with the fallout of lockdowns, quarantines and flight restrictions.
“We are now focusing on providing the best customer service to our users for things like making sure they can travel safely if travel is unavoidable, or making sure that they will be able to get their money back,” she says. “Engaging in communication with our airline and hotel partners is also a key priority, because we want to make sure they also be able to survive during this COVID situation.”
Now more than ever, customer experience matters
None of this is to say that the customer experience didn’t matter to e-commerce firms before COVID-19 – but it matters even more now, says Coupang’s Kapur, in large part because much of the growth in e-commerce transactions is coming from either first-timers or people who are looking beyond the usual categories to buy things they don’t normally buy online, like essentials.
“So what matters now is how each e-commerce company takes care of the customer experience, and I think retention ultimately will depend on how customer-focused you are, how you are focusing on selection price, and convenience,” Kapur says. “Specifically from a marketing perspective, it’s very important that companies add a lot more empathy and understanding into their communication. This is not a time to be blatantly advertising products that get you a margin – it’s a time for understanding what customers are looking for and being honest and relevant.”
Dyah Wulandari of Tiket.com agrees. “We’re taking a very conservative approach in terms of how we’re going to spend our money on the marketing side. We’d rather put more focus on helping customers to get their travel journey done.”
Bukalapak’s Anugrah adds that customer service also includes things like proactively protecting them from predatory pricing.
“[One] market issue in Indonesia is sellers increasing their price for face masks and hand sanitizer,” he says. “So we are removing sellers who do that kind of practice, and encouraging the good sellers to procure more goods and sell them at a reasonable price.”
Putting big data to good use
Delivering the best possible customer experience also means making the most of big data analytics capabilities e-commerce firms already use – just in a different way, says Anugrah.
For example, he says, with more people working from home or generally staying inside, Bukalapak can use its customer data to target them with useful promotions. “We have a campaign to cater the needs of people who are already working from home – maybe they need a webcam, microphone, headset, etc. Or if they’re doing more cooking at home, we also have our own official store to sell items like cooking oil.”
Sachin Kapur says Coupang has been using big data to understand how customer preferences and behaviors have changed – what they’re buying, are they buying from different categories than usual, how their behaviour differs from power users in those categories, etc– and determining which channels to use in reaching out to them.
“There was a time when marketing was very focused on selling, which meant that a lot of our focus was on making customers try new products and explore different categories – that’s not the focus anymore,” he says. “The focus is to understand what is the experience now of the customers trying new categories. So we’re looking at data points like customer reviews and customer feedback.”
Perhaps the biggest change is how e-commerce marketing departments look at past shopping trends to project growth and invest accordingly, Kapur says.
“Earlier, we were looking at trend windows of 90 days, 180 days, 365 days and beyond. Now we’ve shortened that time window to between two to four weeks, because so much changes now in that time period, so it’s futile to say what happened last year will happen this year,” he says. “There have been so many changes in the last three to four months that looking back at a wider time window will not be the right strategy.”