Unified commerce is the way forward for retailers in Southeast Asia, according to Shopify

Southeast Asia is a growing market for retailers, and correspondingly, ecommerce platform, Shopify Inc., released a report looking into consumer behaviour and retail strategies in Southeast Asia: their 2024 Southeast Asia Retail report. 

This report was conducted with the aid of YouGov, which surveyed 269 professionals and over 2,000 individuals above eighteen who live in Indonesia, Malaysia, the Philippines and Singapore.

Perfect pricing 

As Southeast Asia is a rapidly developing region, it should come as no surprise that consumers from Southeast Asia are price conscious when shopping. 

Price is the top factor that potential customers consider when looking at a product. Whether these consumers are choosing to purchase from a brand they already know and like, or deciding to purchase from a new brand, better prices or discounts are the primary driving factor.

While this may make retailers feel compelled to engage in a competitive price war, the second highest consideration for consumers is the quality of products.

This means that retailers have to find a balance between a product that consumers find is good value for money, and make their profitability margins without being too pricey or scrimping on quality. 

Inflation woes

Furthermore, this balancing act for retailers is made harder as consumers in Southeast Asia are reducing their spending. 

Increased inflation in the region is leading 83% of Southeast Asians to cut down on what they view as unnecessary costs; and 39% of them are planning to choose cheaper options when purchasing items.

But despite residents in Southeast Asia spending less, the report asserts that only a fifth of retailers cited consumer spending as a challenge. Furthermore, only 10% of retailers are decreasing their prices, while 26% are increasing prices due to rising costs. 

To encourage consumer loyalty amidst tightening pursestrings, the report suggests that retailers look at other methods to add value to customers’ lives.

One such method is through the rewards that retailers provide. These can be used to show how retailers know their customers and can provide experiences that positively impact their lives — for instance, a sports brand could partner with a nutrition company to provide freebies with their orders, or special discounts.

What brands are actually doing is honing in on their customer service. To supplement this customer experience, retailers also plan to increase their financial investment into digital experience, loyalty programmes, and their product range. 

Chronically online

Increased expenditure on digital experiences is particularly crucial, considering how nearly 80% of consumers in Southeast Asia shop online — 52% of all consumers actually prefer to shop online, while 28% like shopping online and in person equally.

In addition to shopping online, those in Southeast Asia also rely on the internet to shape their purchasing decisions, with 82% of people finding out about new products through social media. Word of mouth is much lower, at 30% of people.

Investing into their digital experience is strategic for brands, and can present them with an opportunity to tide through the current economic climate and reduced spending in the Southeast Asian market. Social commerce platforms include Facebook shop for the older generation, and Instagram and TikTok shop for the younger ones.

Not all online platforms are equal

However, retailers cannot wholly rely on third party social commerce platforms or online marketplaces, and skimp on their own domains. Having their own website makes retailers appear more credible to consumers, with 81% believing that a company with a website is more trustworthy and credible than those that do not.

This is especially key for brands who hope to have a more sophisticated image. Customers often search up brand websites as opposed to their online marketplace storefronts for a more elevated customer experience. To visit a company website is to expect a more personalised experience, with consumers opening company websites for exclusive products, personalised customer service, and loyalty programmes. 

Two in five consumers also prefer to make bigger purchases on a brand’s website, as the company’s own website is seen as being more reliable.

Report suggestions

Therefore, unified commerce is the way forward, or so concludes the Shopify report. Unified commerce can make the shopping experience more appealing to consumers. All sales channels of a brand will be connected, such that physical stores, ecommerce sites, and mobile apps all function on a central platform. 

This allows for synchronisation of data, such that consumers are able to get personalised experiences at every storefront. 

“In this current economic climate, the imperative for both shoppers and retailers to achieve more with less has never been greater. Retailers are turning to advanced technology solutions to not only meet evolving customer demands but also to fortify their long-term resilience,” said Shaun Broughton, Managing Director of Shopify, APAC and Japan.

“Unified commerce is set to be a key growth catalyst, enabling retailers to harness comprehensive data and insights across their customers, inventory, and operations to make informed and strategic decisions.”