Southeast Asia’s top eCommerce platform Lazada released its latest Digital Commerce Confidence Index revealing that seller confidence remained high throughout 2021, signalling a strong year ahead for the digital commerce industry in Southeast Asia.
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According to Lazada’s Q4 2021 Digital Commerce Confidence Index (DCCI),Southeast Asian sellers are adapting to a new era of omnichannel retail. Even as the last quarter of the year saw higher mobility and return of foot traffic to physical stores as COVID-19 restrictions eased, 47 percent of online sellers said they experienced more than a 10 percent increase in their sales during the same period.
“We saw that in the last quarter of 2021, people were spending less time at home and increasingly visiting physical retail and recreational outlets. This trend, when viewed against the success of the year-end online shopping festival season, shows that consumers today are taking a more blended approach to retail than ever before, making purchases both online and offline in a way that meets their needs, adds value and delivers convenience,” said Magnus Ekbom, Chief Strategy Officer of Lazada Group.
The study seeks to map out the trends in digital commerce by indexing the sentiments and confidence levels of Southeast Asian online sellers. It measures business confidence based on surveys benchmarking the opinions of online sellers in Southeast Asia (Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore).
Conducted in the fourth quarter of 2021 with 1,126 online sellers from across Southeast Asia participating, the latest report also found that 76 percent sellers said that they would further increase their inventory by at least 10 percent in the first three months of 2022.
Further, as consumers gradually adapt their shopping habits to include a blend of physical outlet visits, as well as shopping online for convenience and value, there is optimism from sellers across different product categories about how this will result in an increase in sales. Notably, as the majority of the region’s working population assumes a hybrid work set-up, combining both work-from-home arrangements and trips to the office, sellers in fashion (75 percent) and electronics (73 percent) categories were the most optimistic about their expected increase in sales for the three months ahead.
Businesses are cognisant of the need to put their efforts into attracting more customers to shop online, while ensuring that their products remain competitively priced, with many recognising the benefits of online platforms when it comes to attracting, retaining and engaging consumers through initiatives like shoppertainment. Aligning with their sentiments earlier in 2021, in the Q4 2021 study, 59 percent of the sellers surveyed cited attracting more online traffic from shoppers and 54 percent stated increasing price competition as top two opportunities for growth in Q1 2022.
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“Today, the customer shopping journey is much more complex: Customers are increasingly switching between physical and online channels. This same trend applies to all product categories including shopping of cosmetics, fashion, even food and groceries. While this behavior is not exactly ‘new-new’, it has been elevated by the stay-home economy during the pandemic. Therefore, to stand a higher chance of winning customers over, brands need to integrate online and offline experiences across a range of touchpoints, and leverage technology to recreate a ‘human touch’ in the digital space.” commented Chong Hin Ng, co-founder and CEO of Asia Insight.