Southeast Asia’s relationship with e-commerce over the last few years has been one of acceleration, and the onset of the COVID-19 pandemic in the first quarter of 2020 seems to have further fuelled the industry’s rapid expansion. The segments benefitting the most have been groceries, electronics and home goods as people prioritised the stay-home essentials.
The entire fashion retail ecosystem, on the other hand, took a major hit at the global level with many brands and retailers forced to dramatically reduce or sell off their operations.
That said, for those remaining, this has been a wakeup call to be swift in adapting to consumer needs and building an online presence, or risk being left behind.
Digital is no longer a choice
Throughout Southeast Asia, digital penetration continued to grow at a significant rate, with over 40 million new internet users in 2020 alone. Regional lockdown curbs only served to catalyse this growth, having accelerated the adoption of e-commerce and digital payments as more people began to embrace online shopping within the comforts of their own home.
In fact, a whopping three out of four consumers in Singapore had indicated their preference to maintain their newfound e-commerce shopping levels even after the pandemic subsides.
To help brand partners transition, ZALORA has been working with industry bodies and governments to support training and on-boarding to digital platforms. For existing brand partners looking to accelerate digital, the biggest roadblock has been logistics and fulfilment in a complex landscape like Southeast Asia.
Zalora’s 1SS (One Stock Solution) service supports this need. 1SS is a “Fulfilment as a Service” solution, offered to brand partners to help them reach a wider customer audience more effectively. By leveraging Zalora’s operations and fulfilment capabilities, it gives brands an opportunity to have a connected retail between their offline and online business.
Furthermore, consumers in Southeast Asia will be the winners from us co-creating exciting innovative solutions with our partners.
Also Read: E-commerce wars in Vietnam intensify. Here is all you need to know
Realtime data as guiding light amid flux
Another pressing challenge faced by industry players today is making sense of the changes in consumer trends and demands. As the lifestyles of many transitioned to being home-based, purchasing patterns and fashion preferences similarly followed suit.
Categories such as sports and activewear, loungewear, beauty surged at the height of the pandemic, despite consumers’ initial concerns about the financial impact the virus had brought about. Sustainability, too, rose in its pertinence, with over 60 per cent of consumers affirming that they would be willing to spend more on sustainable and ethical fashion items.
Counterintuitively, Luxury and premium also accelerated in select markets such as Singapore and Hong Kong. It is clear that the virus has caused a complete overhaul of consumer priorities, prompting a total recalibration of perspectives and strategies for e-retailers.
On this, Zalora’s data insights platform Trender, served as a north star for brands to sift through the noise and identify key trends that would assist them in maximising valuable opportunities amidst such a fluid environment.
The future is fast and female
While companies deal with challenges, there are also new and unique opportunities lying in wait for businesses to seize in 2021 and beyond.
This is especially so in Southeast Asia, where the future of fashion is indisputably female. In line with statistics from Zalora’s customer base, women contribute to 80 per cent of household expenditure, and female shoppers outnumber their male counterparts by four to one.
Demographics are also shifting towards younger generations, with the region’s 200 million millennials and GenZ-ers expecting to comprise Southeast Asia’s largest consumer base in the years to come.
As these tech-savvy millennials and GenZ-ers bring new demands and expectations, businesses will have to continue finding ways to appeal to this whole new generation of shoppers.
As brands actively seek to engage their customers and build affinity amidst an increasingly saturated playing field, the growing demand for localised assets has led to an increase of more than 120 per cent in terms of value invested across the industry.
Content has long been king, and brands should thus look to deliver fresh and appealing content to engage with this rising consumer pool – whether through influencer marketing (Nike’s Modestwear Campaign with Abby Asma), Instagram live video sessions (ZALORA Singapore’s #SaturdaySweat workouts), or even editorial productions (ZALORA Philippines’ /covers).
Similarly, in response to the increasing awareness amongst millennial and GenZ consumers around environmental sustainability and the rise in demand for circular fashion, brands must take it upon themselves to lead the charge in developing sustainability strategies that pivot towards greener and more innovative long-term solutions for the fashion industry as a whole – highlighting their commitment not just to the environment, but to their customers as well.
Also Read: How COVID-19 is changing traditional retail and e-commerce in SEA
Technology innovations will blur the lines of offline-online
Further, given the rapid adoption of simple services such as digital payments and e-wallets, and more complex features like augmented reality (AR) or virtual reality (VR) product previews, the typical offerings of a brick-and-mortar store will have to be reinvented for a virtual space.
For example, we anticipate more shopping apps to offer mixed reality features, from try-on experiences of clothing and accessories to virtual visualisations of products, such as placing virtual sofas in your living room before you order, thus bridging the gap between offline and online experiences.
If there is anything COVID-19 has made clear in no uncertain terms, it is that the industry will continue to change and evolve beyond a stable climate. With this forced introspection, businesses must realise that in order to thrive in a post-pandemic world, they cannot rest on their laurels, but must remain agile and innovative in order to quickly and effectively adapt to the changing times.
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