[00:00:00] Welcome to Unpacking the Digital Shelf where we explore brand manufacturing in the digital age.
[00:00:16] Hey, I'm Peter Crosby here from the Digital Shelf Institute.
[00:00:19] E-commerce in Asia is such a vibrant mix of unbelievable scale, rapid innovation,
[00:00:24] and distinct cultures that together become a fascinating source of case studies for other
[00:00:29] markets to mine for opportunity. Not everything translates, but there is a deep well of experimentation
[00:00:35] and execution to learn from. Rebecca Sheng, CEO of Tristana, joined Lauren Livak, Gilbert,
[00:00:42] and me from Singapore to share with the DSI audience the trends and opportunities in the
[00:00:47] Asia market that deserve the attention of brands looking to experiment with new consumer experiences
[00:00:52] and perhaps even expand to the Asia market. Rebecca, thank you so much for being here with
[00:00:58] us and specifically thank you for coming all the way across the world in Singapore in your
[00:01:03] evening hours to record this. We are really grateful that you're ending your day with us.
[00:01:09] My absolute pleasure and excited to have this conversation with you guys. Thanks for having me.
[00:01:13] Yeah, we are we're so excited to dig into e-commerce in Asia and get the perspective.
[00:01:19] So often it's looked at maybe as more advanced in North America. I don't know whether you
[00:01:23] feel that way or whether it's just it's a different society, the different societies,
[00:01:29] different cultures. But you know, whether it's the things like delivery within hours or content
[00:01:35] updates in minutes or the big targeted e-commerce events that they have, it just seems like
[00:01:42] we're curious about what can our North American listeners, what should they know about and
[00:01:47] what can they learn about? So just start us off with sort of your view of the state of e-commerce
[00:01:52] in Asia now. Yeah, I think it's a really exciting region because it's so diverse and there's a lot
[00:01:58] of different things that are going on in different places. So I think of it as big like it's just
[00:02:03] such a big region in terms of pure population, relatively young and very much going rapidly
[00:02:09] and has really adopted digital ways with a with a veracity right with a with a real kind
[00:02:15] of hunger for it. But if I kind of break it down even further than that, I think there
[00:02:19] are nuances. So if I take, if we talk about China for instance, the largest e-commerce market by far,
[00:02:25] right? A kind of hands down and they've got their own models of purchasing. They've got JD.com,
[00:02:30] they've got T-Mall, Pinduoduo, Douyin, all these various kinds of channels and from pure numbers
[00:02:36] of buyers perspective, you know reaching the billions, right in terms of number of folks
[00:02:40] that are on e-commerce three times the size of North America's or the US's total population.
[00:02:47] If we take a look at Southeast Asia, also a little bit of a different ecosystem, population-wise
[00:02:53] more like 300 to sorry, more like 600 to 700 million. And it is actually the third most
[00:03:00] populous region after East Asia and South Asia. So I think Southeast Asia sometimes doesn't really
[00:03:05] get onto folks's radar as much. It's not as talked about, but it actually is, I mean,
[00:03:10] the population of Indonesia is basically right behind the United States in terms of just number
[00:03:15] of people. And the population in this region is generally younger. So Gen Z is playing a really
[00:03:20] strong role in kind of how they're influencing purchasing online. And I think I read a stat
[00:03:25] somewhere that it's like in Thailand, something like 30% of the Gen Z population is making all
[00:03:32] online purchases for their entire family unit, right? So they're really this, the younger
[00:03:37] generation is playing a big role. And then of course you've got Australia and New Zealand
[00:03:41] not to be forgotten as well. Kind of the smallest I would say in terms of population size, but very
[00:03:46] much I think a lot of exciting things happening there from an e-commerce perspective as well.
[00:03:50] Maybe a bit more culturally similar to the United States, but I think Asia as a whole,
[00:03:56] you can think of it as big, diverse and very hungry.
[00:03:59] And sort of what's important to, and I know this, talking about regional thing,
[00:04:06] I know every country is different, everything, but what are kind of the trends or the,
[00:04:12] what's important to the shoppers in this region? Like what's their number one concern
[00:04:18] with their shopping? What is it that gets them engaged and gets them to conversion
[00:04:25] that might be different? Yeah, totally. I think there's a couple of different aspects about the
[00:04:32] kind of speaking about APAC kind of a general level that we can touch upon. So one is that it's
[00:04:37] growing super rapidly. So the penetration of e-commerce and the amount of people that are
[00:04:41] buying on e-commerce is expanding rapidly every year. And it's one of the fastest growing
[00:04:47] regions globally speaking for that. But also specifically, purchasing on e-commerce versus
[00:04:52] mobile is particularly prominent. So smartphones and tablets are much more popular than
[00:04:58] necessarily desktops, which tend to be I think the predominant thing that people are using in the
[00:05:03] US. The second thing is really the buying behavior. It's very omnichannel and very price conscious.
[00:05:09] So I'll give you an example. I mean, everybody's familiar with Black Friday. And so Asia has kind
[00:05:15] of this Black Friday on steroids thing called Singles Day, which is 11-11. And the reason
[00:05:21] it's called Singles Day is because the 1-1-1-1 looks like basically like the last branch,
[00:05:26] the family tree, like basically you're alone. It's almost like the anti-I know Asia, I love it.
[00:05:36] It's like the anti-Bowlentines Day. And there's like a whole cultural phenomenon where people
[00:05:40] are getting married on Singles Day for ironic reasons, the whole situation.
[00:05:45] But kind of very intelligently, like 10, 15 years ago, Alibaba started doing these 24 hour
[00:05:52] sale events on 11-11 on Singles Day. And these were widely popular, things were discounted to the
[00:05:59] high heavens and people bought so much stuff. And now what's happened is that it's led to
[00:06:05] these spin-offs. Now there's 6-6, June 6th, 7-7, July 7th, 8-8, 9-9, etc. And what's now happened
[00:06:12] is that consumers are almost trained to wait for these sales and discounts. So they know that
[00:06:18] every month this big kind of event is going to happen where the marketplaces and the e-commerce
[00:06:22] sites are doing this bonanza or whatever you want to call it, like this big event. And so they're
[00:06:29] waiting for those discounts and really playing into that conscious price sensitivity that the
[00:06:34] consumers have. Did the retailers kind of regret the monsters that they've created by driving
[00:06:41] that behavior or are they just happy to take the sort of momentum of it all?
[00:06:48] There definitely are questions. I think one big question that retailers are wondering now is,
[00:06:53] how do you lower that cost of acquisition for customers, right? Kind of holistically speaking.
[00:06:58] And so for instance, one of the things that's really top of mind for a lot of retailers
[00:07:02] is loyalty programs. How do we incentivize people to keep coming back and repurchasing so
[00:07:07] that that cost of acquisition, even if it came at us, deep discount to start with,
[00:07:11] kind of pays off over the lifetime value of that consumer. So definitely I think something that
[00:07:16] now the next stage is, all right, that's kind of the situation for how the consumers are behaving.
[00:07:22] How do we now start to build that loyalty and that fan base kind of for the long term?
[00:07:27] And kind of relate to that is that these marketplaces are really growing rapidly in
[00:07:31] Southeast Asia. And more recently, as I think has been the case globally speaking,
[00:07:37] there's been this push for profitability. And so that means that these marketplaces are offering
[00:07:43] more services and becoming more of these like super app type marketplaces where they're offering
[00:07:48] financing and insurance and all sorts of things on top of buying goods. But they're also
[00:07:52] increasing the commission take rate that they're taking from the sellers, right? The brands
[00:07:57] are the manufacturers who are selling on these platforms. And that's leading to a kind of resurgence
[00:08:03] in this idea of investing your own.com, right? People are thinking, okay, let me then start
[00:08:08] to build my own e-commerce site again, playing into that loyalty factor as well to make the
[00:08:13] acquisition just more economical for the brand manufacturer side. And of course, there's
[00:08:19] other than the marketplaces, there's also these social selling, live selling,
[00:08:23] all of these optionalities, which we'll talk about I think a little bit later in the
[00:08:26] podcast, but definitely very unique to the Asian region in particular.
[00:08:31] Would you say that so it sounds like price is like a number one factor for consumer?
[00:08:35] Would you say that like convenience would be number two or like what are the kind of like
[00:08:39] two and three because I know I've heard stories about like ordering something online and you get
[00:08:43] it in like 15 minutes where here that would be like incredible, but we settle for two days.
[00:08:48] Like what would be the consumer's desire, I guess as the two and three options beyond price?
[00:08:55] Yeah, I think price is very much number one. But there's also these economies, right? Where
[00:09:00] Asian like the Asian population also loves brands and then that's kind of the opposite
[00:09:04] of price in a lot of ways. But convenience definitely is a big factor as well. The thing
[00:09:11] that I think needs to be kept in mind for a lot of the Asian countries is that the cost of labor
[00:09:18] is relatively cheap. So in many cases, you know, it's maybe it's not even from a consumer perspective
[00:09:25] you who's going to be picking up the package or getting the package. It might be somebody who's
[00:09:29] in your household helping you or a driver or something like that. And so in those cases,
[00:09:34] it's a little bit less about convenience. It's more about maybe value is a better word than
[00:09:39] price, right? Value overall. I love that. Great. Thank you for sharing that. So let's
[00:09:45] think about if a brand wants to expand to Asia, maybe they're thinking about it,
[00:09:49] they're building on a plan. What are the things that you would suggest they think about or kind
[00:09:53] of watch out that they need to incorporate into their strategy? Yeah, I think, you know, with
[00:09:58] every expansion there's always going to be the logistics and warehousing part of it. I think
[00:10:02] everybody will will be thinking about that even if they're expanding from state to state in
[00:10:06] the states. But I think two particular areas about international expansion that I think are
[00:10:12] important to think about is number one, compliance and number two, localized marketing, right?
[00:10:17] Cultural adjustments to the product for that particular for the target geography. So from
[00:10:22] a compliance perspective, Asia is many different countries that don't have a European union thing
[00:10:31] to help you, you know, almost have some sort of regulation over the overarching regulation for
[00:10:37] the for compliance. And so that means if you want to enter the tile market versus the Indonesian
[00:10:42] market versus the Malaysian market versus the Chinese market, those are all going to be a different
[00:10:47] set of compliance that you have to overcome. And in some cases, let's say you're trying to import
[00:10:53] food into Thailand, like you've got a great chips company or chip snack company and you want to
[00:10:59] sell those into Thailand or Indonesia, you're looking at three to six month processes to get
[00:11:05] those chips approved from a compliance perspective by the requisite authorities in order to get those
[00:11:11] chips into the market, let alone start selling actually to the consumers. So I think compliance
[00:11:17] is really something to not be underestimated. I would really advise folks to do your research
[00:11:23] and at least do a bit of a sense check like you may think it's going to take you a month,
[00:11:26] it may actually take you half a year. And that that's something to really take into account
[00:11:30] when you're planning. I think the second thing is really around the localization, right? So
[00:11:36] if you are selling in Thailand, you of course need to have be able to describe your product in Thai
[00:11:42] and they may also have their own desires for what kind of marketing images that they like
[00:11:46] to look at. I'll give you another example Korea and Japan really like kind of, you know,
[00:11:53] descriptions that are not text based, they really like kind of these these graphical ways of
[00:11:59] depicting the product. And that's how they're used to looking at products and assessing whether
[00:12:04] something is worth buying or not. So if you're, if all of your data is text based because you're
[00:12:09] used to selling maybe on Amazon or one of these other US based retailers where it's like the
[00:12:13] five bullet points, right? And that's kind of how you describe your product. You would have to
[00:12:18] you know, think about localizing your content in a way that appeals to those local markets,
[00:12:22] not just from a language perspective, but also from a presentation perspective.
[00:12:26] And in both of those cases, both for compliance and for kind of localized marketing,
[00:12:30] I think having a strong product data backbone is super essential. You've got to have kind of the
[00:12:35] fundamentals about your master product data before you can really think about, okay, now how do I
[00:12:40] do these expansions and do these transformations on top so that I can start, you know, selling
[00:12:45] these products in new markets and explore new customer bases. So Rebecca, when you talked
[00:12:50] about the visual content, can we dive into that a bit? Because I think a lot of brands, at least
[00:12:56] in North America, try to have like the carousel images be super appealing and they work on enhanced
[00:13:01] content. But I know there's a lot more real estate on a lot of the websites in Asia where you can
[00:13:06] add more visual content. Do you, do you have any sense of what has been the most impactful or
[00:13:12] what you see that is the most appealing that maybe we could translate into the smaller
[00:13:16] space that we have around imagery, unlike the Amazon's Walmart's targets of the world? But
[00:13:21] I'm just curious because I know it's so visually appealing and it makes it so easy to understand
[00:13:27] the brand and the product. Yeah, so if you look actually at the images themselves, they're not
[00:13:33] necessarily displaying any information that you wouldn't have in like a pretty well designed
[00:13:42] PDP page in the West that has all of the attributes that you're looking for, right? So it's not that
[00:13:46] they're necessarily expressing new information, but they're just expressing it from a graphical
[00:13:50] perspective. So instead of saying like, Hey, there's three colors, they'll legitimately have
[00:13:54] like the shoes in all three colors, those images part of the product description in the actual
[00:13:59] thing, in the actual product description page itself. Or like another example is the size,
[00:14:06] right? So they may actually have an image of the product and then the, you know, the kind
[00:14:10] of lines that indicate this is how long it is, this is how tall it is, this is how wide it is.
[00:14:15] And then of course the other part of the images is just what is the,
[00:14:19] what's the human or the individual who's in that product displaying that in that image,
[00:14:25] displaying that product? What do they look like? So for instance, in Indonesia as a predominantly
[00:14:30] Muslim country, right? That's a Muslim country. So that means that the women should,
[00:14:34] you know, be wearing hijabs, for instance. Now, that's not a hard and fast rule, of course.
[00:14:40] But it is something that you should keep in mind if you're, you know, having your,
[00:14:44] if you're selling particularly fashion things to women in Indonesia, then that's,
[00:14:48] that's definitely a localization that I would recommend you make and look into.
[00:14:54] So, Rebecca, I don't know whether you've heard of this thing called AI.
[00:14:58] It's something new. Oh, what's that? Let me take a moment to explain.
[00:15:04] I think what we see from a lot of our members at the DSI is there's a combination of
[00:15:16] wary excitement and fear. And it's overwhelming and a lot of hype and there's a legal and
[00:15:27] regulatory component to use. So there's a lot of complexities in thinking about
[00:15:33] being able to harness the opportunities of AI. And I'm wondering what's, how is sort of the Asian
[00:15:40] region and brands and suppliers and retailers sort of trying to figure out their path with AI?
[00:15:51] Yeah, for that, I think maybe a little bit more of, let me talk a little bit more about
[00:15:56] the landscape in on the retailer side for Southeast Asia in particular. And I'll,
[00:16:02] I'll kind of tie it back to your question afterwards. So retailers and brands actually
[00:16:11] sometimes, especially if they're, let's say from the West or from Europe, from the US,
[00:16:15] they may not actually operate their own stores or their own brand in Southeast Asia.
[00:16:20] Because it's, you know, it's a region with a lot of different countries and each
[00:16:24] country has their particular nuances, their own logistics systems, their own ecosystems in terms
[00:16:30] of the buyers, but also the tech stacks and retail connections. And so what we see, for instance,
[00:16:35] is on the retail side, there are often these retailers will be essentially
[00:16:43] pulled under a portfolio for a, an operated by a local provider. So for example, Zara Indonesia
[00:16:50] is not Zara, it's not the Zara that it's not operated by Zara the way that you and I know.
[00:16:56] It's actually under the portfolio of an Indonesian company called Mitra Adi Prakasa.
[00:17:01] And at Mitra Adi Prakasa also has in portfolio Starbucks, Marks and Spencer's, Reebok,
[00:17:07] like a lot of these names that that I think you and I would know.
[00:17:12] But what makes sense for them is not to necessarily own and operate their own stores
[00:17:15] in Indonesia, but actually to partner with Mitra Adi Prakasa because they're the ones who
[00:17:19] are local there and they know where to buy, where to have the real estate, where to open the stores,
[00:17:24] etc. So the relationship therefore with these, that these brands have with the retailers is also
[00:17:28] maybe not quite the same because you're kind of adding another layer of translation there.
[00:17:33] And that often means that sometimes these retailers may not be getting the product
[00:17:38] the same way as if you were to directly kind of be interacting with between the brand and
[00:17:43] the retailer. And so sometimes actually these retailers have maybe even poorer product data because
[00:17:51] there's not quite that data bridge that's being built or it's not as strong because there's
[00:17:54] again another layer in between. So it goes back to kind of thinking about how you're going to
[00:17:59] be selling your products, understand this ecosystem. You have to your, your backbone
[00:18:05] of your product data needs to be pretty solid and you need to have that flexibility to be
[00:18:09] able to share that data so that you can be sure that it's going to be represented well in any of
[00:18:13] the countries that you're selling, not just kind of the ones in the West. So that's one,
[00:18:18] that's definitely one part on the brand side. Actually, it's a similar story but a little
[00:18:23] slightly different solution. So again, some brands they just, you know, they don't know how to
[00:18:28] operate in the Philippines and they don't, that's not necessarily a strong suit. And so
[00:18:32] what they have is what we call e-commerce enablers and these you can think of them as
[00:18:37] digital distributors. So they will buy your product, they'll hold the inventory,
[00:18:41] they'll do everything including the content, the advertising, the marketing, they'll work with you
[00:18:45] to ensure that, you know, there may be selling on the correct channels either through these
[00:18:50] retailers or through various marketplaces and it really helps the brands because it kind of takes
[00:18:54] that localization that, you know, that local knowledge component away and enables them to
[00:19:01] still enter that market and reach a new audience. Of course when those, when those
[00:19:05] brands become a certain size, they may decide that they want to take those operations into their own
[00:19:09] hands instead of having it handled by an e-commerce enabler. But that could be a way to think about
[00:19:14] how to enter the Asian market with an expert, right, with a partner who kind of knows the
[00:19:21] ecosystem. But in both of these cases I think what basically you can see is that there's just
[00:19:25] a lot of different channels, a lot of different sales channels that are available for folks
[00:19:29] to buy on, right? We haven't even talked about social selling and live selling yet.
[00:19:33] But these kind of factors combined means that there's a lot of different outlets that
[00:19:39] people are using to consume information about their product information. So when it comes to AI,
[00:19:44] I think what I see is really solving that problem because you need two kind of parts, right,
[00:19:49] to make this really work from a data perspective when you speak about product data in particular.
[00:19:55] The first is that you need a data master and the second is that you need to be able to
[00:19:59] transform that data into the format that each of those sales channels is looking for.
[00:20:05] And so we've actually seen examples of retailers and brands here utilizing AI to solve this problem.
[00:20:13] So I'll give you an example. Maybe your brand recognizes turquoise and teal, but maybe this
[00:20:19] online retailer only recognizes teal and retailer B only recognizes blue, not even
[00:20:26] turquoise or teal. So if you have thousands of products, it's going to be quite a task for you
[00:20:33] to then have to translate every attribute to match the required kind of attribute format that each
[00:20:40] retailer in this market is requiring. And if you're talking about now 50 retailers instead of 10
[00:20:45] or five, you're talking about quite a bit of manual work in order to just get your products
[00:20:50] online, just to get your products selling in those departments. So we've actually spoke
[00:20:55] to a fashion retailer and they're using AI to do this, right? They're using AI to basically say,
[00:20:59] okay, now all these words turquoise, teal, blue, whatever, they all mean blue.
[00:21:05] And we can automate that transformation and that makes the listing process a lot easier
[00:21:09] and more efficient. I think that's a really clever way that AI has been used here.
[00:21:16] And so those are familiar themes. I think that we're seeing a lot of the same things
[00:21:23] here in North America. I was wondering, sort of in the background, are you seeing
[00:21:29] how companies in Asia are building rigor around AI or how they're,
[00:21:38] is it a free for all or the company sort of as cautious or at least careful
[00:21:46] as many of the companies we see here? Yeah, I would say that there's definitely a healthy
[00:21:52] dose of skepticism as well with the, with retails and brands alike that are considering AI in this
[00:21:59] region. And there's also a lot of practicality, which I think is really great and very much
[00:22:04] though, with the way forward in these cases. So the adoption of AI other than kind of the
[00:22:10] individuals experimenting with chat GPT on their free time and etc. I think there is a lot of,
[00:22:16] hey, what's the business case? What's the true problem that I'm trying to solve,
[00:22:19] not just looking at a shiny object of AI and getting excited about that and throwing it in
[00:22:25] the company. And they're also because again, because of this kind of low cost of labor for
[00:22:30] many of these countries, especially in Southeast Asia, there's also much more of a focus on revenue
[00:22:35] uplift. So what does this mean in terms of my conversion? So what's the ROI I'm going to
[00:22:39] get on this on this AI technology? And if you're an AI provider not able to prove that
[00:22:46] you don't have the case studies or you don't have the kind of practicality to back up what
[00:22:50] you're, what you're promising, then these companies are very happy to continue on the way that they
[00:22:56] are because there's that really, that's there's that practicality and there again,
[00:23:01] that value right that focus on value and price that is quite prominent through the culture.
[00:23:07] Are you seeing AI being used around like packaging for e-commerce? Because I can imagine
[00:23:12] that you might have a product shipped to Asia to one of these larger companies that might be owning
[00:23:20] multiple brands and maybe they don't have the right language on it or it needs to be translated or
[00:23:27] the packaging doesn't match the way that you're shipping. Like I'm wondering if there's any use
[00:23:31] case around AI and packaging, I've heard it a little bit in North America but I'm sure it
[00:23:35] is much more prominent just based on coming from North America and being sold differently.
[00:23:40] Is there anything you've heard around that? Totally. I think like AI can definitely be used as
[00:23:45] almost the, what's the word, the kind of first draft but I think we all can be realistic about AI
[00:23:54] and say that it is not perfect and for instance in China if you get the label wrong the penalty
[00:24:00] is very high so I have to, I've got to go back and kind of recheck this but I'm pretty sure
[00:24:07] it was if a consumer catches you with the wrong label on the product they can demand 10 times the
[00:24:15] price of that product to be compensated. Oh my goodness. Wow. So it's super strict and people
[00:24:22] in China will definitely go and hunt for these opportunities because it can be pretty limited.
[00:24:27] Yeah, if you bought a thousand dollar TV I mean hey. And you like check every line item
[00:24:31] right and you're like hey is this exactly what they promised? So the cost of not getting it right
[00:24:39] is pretty high and AI is not perfect yet. And so I think they're very much is like okay maybe
[00:24:45] you can do a first draft but for some of these things that are really heavily regulated you still
[00:24:49] need a human loop and you definitely still need to be double checking the work to ensure that
[00:24:53] you're not exposing yourself unnecessarily to risk. Wow, I had no idea about that rule.
[00:24:59] I can imagine people hunting things down especially high value products and checking the label.
[00:25:06] Reminds me of Willy Wonka and the Chocolate Factory where
[00:25:11] I've forgotten who his father it is. The guy that owns the factory and has all of his workers
[00:25:16] stop doing chocolate and instead like stop doing the book and look for the golden ticket.
[00:25:23] Yeah, yeah. I could see them like filling rooms full of people doing nothing but checking
[00:25:28] labels to have the golden ticket. Like I have a new business idea. Great visual Peter, great visual.
[00:25:38] So Rebecca let's chat about social commerce. We mentioned it a couple times.
[00:25:43] We know it has taken off in the Asian market. I mean I've seen pictures of like
[00:25:47] people on bridges like with cameras like just showing off products and tell us more about it.
[00:25:53] Tell us how it works and how it's taken off so much more there than it has in North America.
[00:25:59] Yeah, it's really interesting and social selling is definitely really big especially
[00:26:04] in China and Southeast Asia I think less so in A&Z. But let's talk about there's different
[00:26:10] kinds of social commerce and I think what you've been talking about you know with
[00:26:15] you've seen the guy on the bridge displaying products is like is live commerce right which
[00:26:20] is this combination of live streaming and shopping because it's kind of honest I mean
[00:26:25] if you guys are to grow up in the US it kind of reminds me of QBC.
[00:26:30] Kind of like the concept is sort of similar except instead of dialing into a place in order
[00:26:34] you're doing it you know through an app or through Facebook or something like that.
[00:26:38] But it's basically incorporating this see click buy experience into a social platform
[00:26:45] as opposed to necessarily creating a platform that is dedicated to just e-commerce right so
[00:26:50] there's an example I think one of the biggest kind of live streaming live selling platforms in
[00:26:58] China is called Xiaohengshu which translates to Little Red Book and it's basically think of it
[00:27:04] like Instagram you can kind of post photos you can scroll through them you can there's clips
[00:27:10] it's 85% women a ton of women and they do a crazy volume of selling cosmetics fashion jewelry
[00:27:19] those types of products. They introduced an e-commerce component to their platform back in
[00:27:25] 2014 10 years ago oh wow you can think about also like there's just you know we talk about
[00:27:33] you know why is it so big well all part of it is also because it's just been around for a lot
[00:27:37] longer and this has become very much part of the norm it's a way to buy now other than
[00:27:45] kind of live live shopping there's also a group buy right that's also something that's quite popular
[00:27:50] in Southeast Asia and also in China and basically this really took off during the pandemic when
[00:27:55] people were trying to acquire supplies of any sort so somebody could get access to a bunch of
[00:28:01] whatever it is eggs milk cheese whatever then everybody kind of wanted to get in and if you
[00:28:06] got a big enough volume then maybe the supply on this side would pay attention to you and
[00:28:11] it's this is this one's largely organic so it's usually done through a WhatsApp like somebody sets
[00:28:15] up a group and that person may or may not be taking a commission off of the actual selling
[00:28:19] itself. In live shopping there's an influencer usually and that influencer does need to be
[00:28:26] you know have some personality traits that makes it fun to watch them that makes it
[00:28:30] enjoyable that makes the person who's watching them want to buy and these influencers can garner
[00:28:36] followerships of like tens of millions of folks like we're just you know basically it's and yeah
[00:28:42] we call them key opinion leaders or KOLs in China in particular. Now the benefit for this is in
[00:28:48] live shopping you'd be shocked but the conversion rates are amazing that's really the big benefit
[00:28:55] and so these companies will hire these influencers to essentially sell their products through live
[00:29:01] shopping in order to basically get that sell-through rate and in group buy the benefit for is mostly
[00:29:06] on the on the user side right where it's essentially you get a bulk discount for grouping
[00:29:12] together a bunch of people maybe you all live in the same apartment block together maybe you
[00:29:17] live in the same neighborhood you can decrease the shipping cost as well since this is one
[00:29:21] drop-off point and then you can kind of get to a wholesaler purchase it's like it's like Costco but
[00:29:29] you know in your apartment complex yeah yeah exactly exactly um yeah and these it's it's definitely I think
[00:29:40] a part of the community right it's kind of monetizing a community that's very much the
[00:29:44] theme of this of the social selling part and I think this kind of community where you're
[00:29:49] sharing great deals with the with your your friends and you're and there's very much a
[00:29:55] community aspect to what you purchase them why you purchase it especially in Asia that's why
[00:30:00] it's really been it's really taken off also because it's been around for a lot longer too.
[00:30:07] Another another movie reference comes to mind when I listen to this which is in North America
[00:30:13] I mean if you've you've ever seen the movie Mean Girls um wherever you know she'll say
[00:30:19] stop trying to make fetch happen it sort of felt like stop trying to make live shopping happen
[00:30:23] in the US because it just I don't know it maybe it's just to your point it just hasn't been
[00:30:29] around long enough or we just haven't sort of found the right way in but do you have a sense
[00:30:34] of why it's a lower adoption rate and and you know certainly I don't think believe that
[00:30:39] we're having the same conversion rate magic that you are having like do you have a sense of what
[00:30:44] that the unlock would be for North America? Yeah I have a I mean this is no data behind it just
[00:30:51] got but my gut would be that some of its cultural and then another part of it is
[00:30:58] the density of living of kind of where folks are living so I mean you can imagine right the
[00:31:05] China population 1.4 billion people and these cities like Shanghai and and Beijing are bigger
[00:31:12] in population than some countries right so there's some things like group by where you can really get
[00:31:19] that density of folks who are all together living in a similar area to to place an order together
[00:31:24] just kind of there's more opportunities for that because people are just living in a in a
[00:31:28] more densely packed area and these cosmopolitan's are how these higher concentrations of
[00:31:33] population I think it's partially that I think it's also partially cultural there very much is like
[00:31:38] you know communities obviously really important in Asian cultures and I think like that whole
[00:31:44] sharing of good deals seeing what other people are buying as a way to validate whether this
[00:31:49] product is good or not those are those kind of important elements to the purchasing decision
[00:31:54] decision cycle. I wonder if another element of it is fulfillment because I'm thinking back
[00:32:00] to like when I've worked with some brands who are trying to sell on Instagram like the way that
[00:32:05] they fulfilled Instagram orders versus like how they fulfilled orders for the past 100 years
[00:32:10] with all of their retailers and like built with Amazon it was just so much more complex and
[00:32:15] they couldn't ever plan how much was going out what what they needed to like have ready in stock
[00:32:21] and where and I can imagine in China or in Asia in general it might just be easier to fulfill
[00:32:29] based on proximity based on the products being created there
[00:32:34] less expensive labor yeah I'm wondering if that has an element I don't know if I'm
[00:32:38] if you would agree in any way about that. Yeah I think that's definitely part of the equation
[00:32:43] for sure right if you I mean if you look at essentially these I mean Timu I'm sure has been
[00:32:48] the talk of everything at this point and the large part of that is just basically taking
[00:32:53] advantage of the factories in like the manufacturing base in China right and if you live in China
[00:32:59] then that's even a different story because that factory could be in the next province over
[00:33:04] so very much I think the logistics definitely play a role in this as well.
[00:33:10] All right Rebecca close us out with some wisdom okay so you're from your perspective
[00:33:16] for our for our North American listeners what what are two or three things that you think
[00:33:22] they could learn from how e-commerce is practiced in Asia? Yeah so I think you know what we were
[00:33:29] talking about lat and towards the end there around monetizing communities is a really interesting
[00:33:34] concept and if you think of it kind of broader than just uh live shopping or or group buying
[00:33:42] but you think of it as how do you build a community around your product and your brand
[00:33:46] as part of your way to build that connection and eventually sell more product I think that's
[00:33:51] something that Asia has done very well um and maybe something that could be could be learned from
[00:33:59] I mean the second thing is just that agility and willingness to experiment that's really prevalent
[00:34:04] in all the Asian countries that I've that I've really had experience with they're always
[00:34:09] on the lookout for where consumers are going there's always some new platform some new way that
[00:34:14] people are interacting with products that are buying products and people and companies are
[00:34:19] really quick to try them out um and to try to follow where the consumers are going in a lot of
[00:34:25] in a lot of ways some of that agility is facilitated by low labor costs so you can kind of just
[00:34:31] get people to get people to help you uh try out new things pretty quickly but I think
[00:34:38] that can also be replicated with technology if you have a really solid technology staff if you've
[00:34:43] got your master data in um in kind of order and you have the capabilities on top to transform that
[00:34:49] then also gives you the capability to also try out new channels new ways of selling
[00:34:54] in a relatively quick way and I think that agility is is really essential especially
[00:34:58] with how competitive things are these days and the last thing that I would say is
[00:35:03] the adaptation to local tastes and the personalization that is really essential in in Asia I know
[00:35:10] like the US is one country but I think we can all agree that not all Americans are the same as other
[00:35:16] Americans I think we can agree on that we can agree and in some ways it kind of seems like
[00:35:23] there's a lot of little different you know communities that are all in the melting pot
[00:35:27] that is the US and that's something that's really beautiful about the the US for sure
[00:35:30] there's an obvious cultural difference between Thailand and Vietnam from language perspective
[00:35:34] but I think that adaptation to different communities different preferences etc is also
[00:35:39] something that can help to deepen that that connection also help to find the product
[00:35:43] help the product to find the right consumer set and again I think that's something that AI can
[00:35:48] help with right that's that's an area where uh where the technology of the day and the
[00:35:53] new things that are happening uh can really help to bridge that gap at a at a scale in a way
[00:35:58] that wasn't possible maybe a year or two ago yeah it's exciting really you know I mean once you get
[00:36:04] over kind of the the hype and everything else the you know I'm just I'm just excited to see
[00:36:12] how these capabilities develop to really achieve the kind of personalization at scale sort of
[00:36:18] that you're describing here I don't know what it's going to look like but I can't wait to see
[00:36:23] it come to life because I do think um hopefully it will be less obnoxious than kind of the blunt
[00:36:33] force personalization that has been thrust upon us you know through email market you know
[00:36:39] it just feels uh feels full of effort and not authentic but I think in some ways AI can help
[00:36:48] us with the authenticity hopefully over time as it gets at these as these models get better do you
[00:36:53] do you agree yeah I think it's it's it's overwhelming right uh kind of the amount of stuff that's coming
[00:37:00] through these days and um I think a lot of that is because you know you really need uh several
[00:37:08] different sets of data in order to do personalization well and if you are missing so in my in
[00:37:15] my kind of viewpoint it's these three sets which is order data you need to know how much was bought
[00:37:20] quote customer data who bought it and product data like what did they buy and if you don't if you're
[00:37:26] missing one of those pieces of the equation then your capability to be nuanced in your
[00:37:32] recommendation goes down so then but you still want to do recommendations so maybe you take more
[00:37:38] of a brute force method of implementation and that I think works because in the past it that was better
[00:37:46] than what we had previously and now that we have better technologies to do more with them to basically
[00:37:52] have better clean data sets in terms of the master data we can also now be a little bit more nuanced
[00:37:58] and a little bit more specific in the recommendations so I think that's that's really exciting also
[00:38:02] for me from a technology perspective but also from a consumer perspective because I would like
[00:38:06] less noise in my life you know yeah agreed totally yeah well uh Rebecca we are so grateful um
[00:38:16] to have your brain and spirit on this show then and to to share all this knowledge with us um
[00:38:23] we're just really grateful to to get this perspective and thank you so much for bringing
[00:38:27] it to us uh no problem it was my pleasure and I hope it was helpful thanks again to Rebecca
[00:38:33] for sharing her knowledge with us for more trending topics from the best experts stop by
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