Opinion: Looking at China – what's next in driving eCommerce marketing?

Digital ad spend in Southeast Asia has been recording phenomenal growth since the pandemic. According to eMarketer, digital ad spending in the region experienced a 17.8% growth rate and as of this year alone, makes up for 32.9% of the region’s total media ad spending. Entering into an endemic phase, recent forecasts highlight that digital ad spending will continue to grow in 2024 to take up 35.3% of the total media ad spending pie.

Evidently, the market has grown increasingly competitive for brands and retailers gunning to capture consumers’ attention. It’s not just about keeping current consumers invested, the challenge extends to reaching new customers.

The competition for consumers keeps growing

Despite the reopening of physical retail, online sales show no signs of slowing down, resulting in increased competition from an explosion in D2C brands. Branding has become pivotal to stand out from the competition; it’s not enough to rely on pure performance marketing to deliver the sales. Brands have to go above and beyond delivering products to invest in long-term acquisition and brand building, delivering consumers added value.

In addition, expectations of consumer experiences are constantly evolving and demands for personalisation are increasing more than ever despite data regulations. All this leads to the question – how can brands continue to lead the competition in connecting with new and existing consumers?

Look to the East

The key to leading the competition lies in making the right adjustments to your brand’s eCommerce-focused marketing strategy – and the best way to do so is to learn directly from the experts. There is no doubt that China is a force majeure in the eCommerce industry, leading the way for the future of eCommerce through innovation. Over the years, we’ve observed key market trends originating from China; from mobile commerce to live streaming – all resulting in a global phenomenon. In fact, if we were to take a closer look at Alibaba’s success, maintaining a consistent consumer-centric approach has always been at the core of its operations.

1. Innovative online shopping experiences

It’s one challenge to attract consumer attention in a saturated and competitive market, and another to retain consumers’ attention. China has met this challenge by combining innovation and imagination in delivering next-level consumer shopping experiences.

Take for instance how Alibaba has optimised tech, specifically augmented reality. In 2019, Alibaba partnered with leading AR company, Perfect Corp to integrate the YouCam virtual try-on technology into Tmall and Taobao. The virtual try-on concept gained traction with consumers – helping consumers visuali se and experiment with products and in making their end decision – all the way to the checkout. True enough, Alibaba reported an increase of four times in conversions within six months.

With Lazada and Shopee’s recent roll-out of the virtual try-on tool earlier this year, AR provides a tool for brands to stand out and provide more personalized experiences to consumers. Early adoption of this tool will likely pay dividends in future through building brand engagement.

2. Diversification is key

With rising acquisition costs, it’s important to play your cards right when it comes to on and off platform advertising. Diversifying your key marketing channels is crucial to not only acquiring new consumers but also developing lifelong brand loyalty. In China, channel diversification has gone beyond mainstream channels to targeting large but underappreciated channels (such as Tencent’s QQ) as well as smaller, more niche channels (such as KEEP).

Initially, a strategic approach which benefited small to medium-sized businesses, this approach can help brands to reach a new audience and expand the current customer base.

Identifying the right off-platform channels for a brand’s consumers, and investing in more channels with higher engagement rates, helps brands widen their consumer communication touch points as well as aligns with the future implementation of more targeted efforts around audience segments.

3. Consumer retention via private traffic channels

As consumer attention becomes increasingly divided across major apps and touchpoints, private traffic just might be the solution for brands to build more cost-effective and sticky customer acquisitions. Private traffic has been a buzzword for marketers in China since 2019 and a popular option among small businesses as it allows smaller brands to reach consumers in a variety of trust-building exercises (including one on one product expertise sharing and interest-focused communities) at a lower budget.

WeChat is one of the many popular platforms for private traffic in China – brands have successfully leveraged WeChat’s ecosystem to drive traffic and build an independent community to promote conversions.

Where does private traffic fit in Southeast Asia? We’ve observed Dior use WhatsApp communities as a market first delivering customer engagement and care, but as we progress further and as our communication channels evolve in functionalities, brands across more categories will take private traffic seriously as a distinguishing factor in driving brand loyalty and online sales.

4. Make strategic data collaborations work for you

Data optimisation has always been the holy grail to gaining a competitive edge in the market. Strategic data collaborations, however, provide a greater opportunity in reaching both new and existing consumers altogether. Tmall has been actively collaborating with brands to examine category-specific customer behaviour on the platform to identify key trends and create relevant products accordingly.

Whether you opt to work with an insights partner or invest in analytics, this is a valuable opportunity to pursue in Southeast Asia and can be a game-changer to your brand’s overall eCommerce marketing strategy.

With all the innovation coming out of China, now is the time to revisit your eCommerce marketing strategy to stay one step ahead of the competition. Even better if executed with the help of an eCommerce marketing partner equipped with the expertise and track record for success.

The writer is Anna March, regional director eCommerce and performance marketing, Intrepid Asia.

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