Despite booming sales accelerated by COVID-19, e-commerce players have taken growth for granted at the expense of consumer experience, according to new research.
Within Singapore, over a third of consumers (39 per cent) said they are less than satisfied with their digital commerce experience, citing delivery costs, product prices, and delivery time as their top three concerns.
Titled Into the Light: Understanding What has Changed for the ASEAN Consumer During COVID-19, the study was conducted by data content and social research agency Blackbox Research and consumer intelligence platform Toluna.
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The report analysed current sentiments, expectations and behaviours of 4,780 consumers across Singapore, Malaysia, Indonesia, Vietnam, Thailand, and the Philippines.
Singaporeans using more but feeling worse
Yashan Cama, International Commercial Director of Blackbox Research, said the study confirmed a significant change in consumer behaviour in recent months driven by an increasing necessity to shop online.
The report found that Singaporean consumers reported a spike in online spending in response to COVID-19, with 63 per cent of those surveyed now spending more online, and the total online spend for the average Singaporean consumer increasing by 31 per cent.
However, the findings also suggest that that while major e-commerce brands are enjoying higher usage rates, this growth has come at the cost of greater scrutiny from consumers.
For example, while brands including Shopee (52 per cent), Qoo10 (41 per cent) and Lazada (39 per cent) are widely used by Singaporeans, consumer satisfaction with Qoo10 and Lazada falls on the lower end, while Shopee only performed average on the spectrum.
Cama said that consumer frustrations about service quality could make or break major brands.
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“We expect some of these cornerstone brands to experience a shake-up in the coming months if these existing problems are not quickly addressed. Consumers will only become more discerning in future. With 5G technology on the verge of transforming platform capabilities, current market leaders may wake to find themselves no longer at the front of that queue if they don’t address concerns and work to deliver a more frictionless experience.”
However, Cama added that this presents Singapore with a unique opportunity to act as the innovation incubator for brands to develop best-in-class e-commerce platforms and services to address these newfound challenges.
“Singapore has always been an important market for both global and regional brands due to its strategic location, as well as its developed financial and legal system. We foresee Singapore becoming increasingly attractive as a tech and innovation hub, as trade tensions and hostility between markets like the US and China continue. Singapore has every potential to become the testbed for new e-commerce players as they look to achieve a greater understanding of consumer sentiments — within Singapore and the region,” Cama noted.
Local businesses emerge as pandemic heroes
The report also identified key trends as a result of the pandemic, notably a shift in consumer sentiment towards local brands. 78 per cent of Singaporean consumers said they were more likely to support local brands in the future, driven by a desire to strengthen their local communities and economy.
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When asked to identify brands that they are pleased or impressed with during the COVID-19 crisis, Singaporeans named homegrown players such as Sheng Siong and Fairprice as their top local brands, and overall the respondents listed at least three local businesses in their top five.
“‘International’ might be on the verge of becoming a dirty word,” said Cama. “Local brands have truly stepped up to the plate during the pandemic, as demonstrated by the key roles these two grocery heavyweights have played during key milestones such as Singapore’s circuit breaker period, and their ability to manage customers and meet their needs in the best possible way.”
“The resurgence in national pride can also be attributed to consumers looking to support their own economy. They are increasingly choosing to shop local over international. International companies will need to reassess their brand portfolios and seriously consider how they can localise their brands to reflect the values that matter most to Singaporean consumers,” he explained.
Home becomes the new headquarters
According to Cama, COVID-19 is not only changing how and where consumers are spending their money, but it is also shifting how people are going about their day-to-day lives, which will have a tangible impact on future consumer behaviour.
“Since the onset of the pandemic, homes in ASEAN have emerged as the headquarters for learning, working and socialising. An overwhelming 95 per cent of Singaporeans are happy working from home, and the majority aren’t missing going to the movies or shopping at retail outlets,” he said.
“Consumers are not rushing back to their old habits, so this new sense of life revolving around the home hub means companies need to rethink how they build this into the consumer experience in future. These changes go right to the heart of consumer behaviour and require innovative approaches across the board from property developers, landlords, employers, through to retailers,” he shared.
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Commenting on the significance of the findings, Cama said that the study has shown that the pandemic has unequivocally shifted how we identify as consumers. If businesses fail to adapt, the stakes are high. Any negative interaction with a brand, particularly in times of crisis, can have longstanding effects on his or her sense of trust and loyalty.
“In order to build resilience, brands need to keep a real-time pulse on customer preferences, and at the same time reimagine customer experience for a post-COVID-19 world, with care and connection at the forefront. Organisations today have an obsession with data. This is not a bad thing. But only by choosing to value customers as more than digital units or data points, will brands emerge successful,” he concluded.
Blackbox Research and Toluna carried out an online nationally representative survey of n=4,780 across six countries, aged between 18 to 60. Stratified random sampling was applied across key demographic and geographic variables to ensure representative coverage. The survey was conducted in June 2020.
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Photo by Erik Mcleanon Unsplash
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