More Product Searches Start on Amazon

Google is losing its grip on valuable search data

Google might leave Bing and Yahoo in the dust for visits, but the popular search engine has been losing some shine as the go-to platform for product search.

A number of consumer surveys have shown that more US digital shoppers now start their searches on Amazon. Nearly half (46.7%) of US internet users started product searches on Amazon compared with 34.6% who went to Google first, according to a May 2018 Adeptmind survey. And the leading method among digital shoppers in the US surveyed by Salsify in February 2018 was searching and buying on Amazon (41%) followed by searching on Google then buying on Amazon (28%).

This is also the case, according to Q2 2018 Jumpshot analysis of multi-device traffic on its platform. In 2015, Google had 54% share of product searches and 46% belonged to Amazon. By 2018, these figures had reversed.

However, shoppers searching on Amazon took longer to make a purchase than those who searched on Google. On average, 25.9 days spanned search to purchase on Amazon while for Google it was 19.6. Most bought an item within five days, though more (35%) purchased in this time frame using Google than Amazon (19%).

Number of Days from Initial Product Search to Purchase Among US Amazon vs. Other* Buyers, Q2 2018 (% of total)

This behaviour can probably be explained by Amazon being used as a product research resource. Shoppers can read extensive user reviews, Q&As and look at photos, but they aren’t necessarily looking to buy immediately, whereas a Google product search could be from a shopper who already knows what they want.

It’s helpful to see that this buying behaviour, and search results can also inform marketing and merchandising strategy. “Amazon is starting to trump Google in the amount of consumers that begin their search for merchandise there. Amazon has that data now—they get the first bite of the apple,” said Mike Sands, co-founder and CEO of location-based services firm Signal.

This shift could hurt retailers that use product search data from Google for bidding and driving site traffic. Wes MacLaggan, senior vice president of marketing at ad management platform Marin Software, cautioned against ignoring Amazon. Marketers need to be aware of how their products are positioned on Amazon and the messaging they use.”

Search result placement on Amazon is key. More than two-thirds of product clicks happen on the first page of Amazon’s search results, according to Jumpshot, with one-third occurring on the first two rows displayed.

Source: emarketer.com; 7 Sep 2018

Alibaba still tops, but watch Pinduoduo and other Chinese online retailers

Online shopping competition heats up in China with Pinduoduo and Vipshop joining JD.com and Suning as notable contenders.

eMarketer has released its rankings for Chinese ecommerce platforms where, as expected, has Alibaba taking the top spot with a 58.2% share this year. Its closest competitor JD.com trails behind at a 16.3% share but the report emphasises that the Chinese ecommerce scene has become more dynamic in recent years with the emergence of several new players.

Most notably, specialist sites such as electronics retailer Suning and branded fashion retailer Vipshop, or vip.com are proving to be credible competitors to Alibaba’s Tmall and JD.com with their offering of more ‘authentic’ products. The report also mentions Gome, a social marketing-based online and offline retailer specialising in home goods which is expected to take a 0.7% share of all retail ecommerce sales this year.

Group discount site Pinduoduo, meanwhile, has been identified as a rising star, coming at third with a 5.2% share. It marks a significant leap for the platform from its 0.1 share during its launch in 2015. eMarketer notes that Pinduoduo’s strategy has been concentrated on shoppers from Tier 3 and Tier 4 cities who are more price conscious but nevertheless enthusiastic about the convenience of online shopping.

“Smaller ecommerce players such as relative newcomer Pinduoduo have benefitted from this trend as buyers in lower-tier cities have been less tolerant of the higher prices found on large players such as Alibaba and JD.com, but they are quick to seize upon the relative deals found on Pinduoduo’s platform,” Monica Peart, eMarketer’s senior director of forecasting.

Despite signs of a more dynamic market, the Chinese ecommerce scene is seen as a proxy battleground between Alibaba and Tencent since the latter owns stakes in JD.com, Pinduoduo and Vipshop. All the ecommerce platforms listed by eMarketer will account for 85% of all ecommerce sales in China this year.

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Source: campaignasia.com; 11 July 2018

It’s not ‘Tmall vs JD’ in China: Two other apps are taking over

Two up-and-coming apps are starting to make a real impact on China’s ecommerce landscape.

Secoo's experience centre in Shanghai

Secoo’s experience centre in Shanghai

It’s understandable if you’re outside of China trying to learn about ecommerce here, and you think the quest for success is between the go-to platforms Tmall and JD.

These two platforms are often mentioned by certain media outlets churning out quick articles. As is usually the case, the reality here in China is far from the online portrayal of it. Speaking to a variety of experts in China, it becomes clear to me that the two real up-and-comers are in fact Secoo and Xiaohongshu (also known as ‘Little Red Book’).

Despite receiving less attention in international media, the figures show Secoo’s strength. Its market share in China is 25.3% as measured by GMV, according to a Frost & Sullivan report. How has it achieved this?

O2O = Oh? to Oh!

It’s not just a gimmicky term. ‘O2O’ really does enjoy the best of both worlds: the convenience of mobile e-commerce with personalised, tangible brand experiences.

What’s more, the fun factor of these omnichannel experiences, full of photo opportunities to post on WeChat Moments, is all-important in China. Secoo now has 10 offline ‘experience centres’—including one in Malaysia—where popular weekend activities like cooking classes or wine tasting sessions bring credibility for Secoo, transmogrifying it from bland e-commerce into a lifestyle platform. Every item used at the experience centre is for sale.

Plenty of foreign media still pump out the same old news about China being ‘cashless’, sometimes making it seem as though brands have been really ‘clever’ in accepting mobile payments.

The reality in China is that you can pay for your wet-market vegetables or your car-parking coupons via Alipay or WeChat Pay, and everyone does that, from kids to grannies. There’s nothing ‘clever’ or too new—until Eric Chan, CEO of Secoo Luxe, explained to me how Secoo took the concept of cashless payments further. First, customers can opt for interest-free monthly instalments to make higher-value purchases than they were previously able to (and didn’t want to use a credit card for). Also, Secoo partnered with retailers, such as Parksons, so that customers can pay for products using the same interest-free instalment plan that currently has partnerships with 26 banks in China.

Ecommerce is more than products

Secoo has taken a lead in diversifying its ecommerce options. It doesn’t only sell luxury products. Travel-wise, it focuses on 48-hour trip packages, having found that many of Secoo’s affluent consumers preferred shorter, work-friendly vacations, for example. These, plus the health and educational services it sells, reflect the (pursued) middle- to upper-class lifestyles in China that Secoo understands.

JD’s luxury section, Toplife, promises certain user-friendly features such as first-class delivery services when it launched in Oct 2017. But Secoo has been doing this for a while. If you buy a suit, it arrives with larger and smaller sizes for you to try on, even with a belt-hole puncher to adjust the belt to your exact size.

Chinese women make up a prosperous 88% of Xiaohongshu’s user demographics in 2017. The shopping-tip app—valued at US$3 billion in its series D round—is a platform for (mainly) women to read reviews of beauty and fashion products from ‘desirable’ overseas destinations. They purchase chosen products for themselves, and then review their own purchases. Rinse and repeat. It’s a beautifully simple cycle of a clearly beloved hobby of young Chinese ladies below the age of 35 (i.e. 89% of Xiaohongshu’s users).

With 100 million users as of now, another strength of Xiaohongshu is that there is no sharing or forwarding function. Users can save their favourite reviews to their own shopping lists, as well as like and comment on other’s posts. This prevents spam and builds the notion of a ‘safe place’ which is just about user reviews.

Yet, authenticity is still an issue for Xiaohongshu. I spoke to several young Chinese ladies as part of my research and discovered many were wary of the authenticity of KOL reviews. This caution is an ever-present aspect of ecommerce in China, and worth mentioning amidst this gushing praise of Xiaohongshu.

Crucially, the aspect of user-generated content by leading KOLs, who post at will and for their own pleasure, is something that Tmall and JD don’t have.

All in all, Secoo and Xiaohongshu have engendered greater popularity among ecommerce players in China and are where brands should be looking to engage with their target consumers.

Source: campaignasia.com; 26 June 2018

Google is investing $550 million in JD.com

Google will invest $550 million in JD.com as part of a strategic partnership between the companies, according to The Wall Street Journal. The deal will only net Google an approximately 1% share of the Chinese e-commerce company, but it will also see the two work together, leveraging the logistics capabilities of JD.com and Google’s technological expertise, according to a press release from Google. Additionally, JD.com will start selling through Google Shopping, allowing some of its products to be sold internationally.

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This gives Google another retail partner as it builds its e-commerce profile. Google partnered with Walmart to sell its products through Google Express last August, and worked with the retailer again, along with the likes of Target, Ulta, Costco and Home Depot, when it tested its Shopping Actions program, making it easier to shop these high-profile retailers through Google. Adding JD.com gives Google more products to attract consumers with, an important effort as it competes with Amazon for product search.

JD.com gains another powerful backer that can help it battle Alibaba. As of Q1 2018, JD.com held about 25% of China’s business-to-consumer internet retail market share, falling behind Alibaba’s Tmall platform at a 60% share, according to Analyst.

The Chinese e-tailer already counted Tencent and Walmart as allies — Tencent is its largest shareholder at 18%, while Walmart has a 12% stake — with JD.com regularly working with both partners on various initiatives and investments. Google gives JD.com yet another strategic partner with deep pockets and technological capabilities that can help it fight Alibaba over China’s valuable e-commerce and retail markets — the country reached over $1 trillion in e-commerce sales in 2017.

The deal may help JD.com’s International expansion plans, especially its aspirations in the US and Europe. JD.com wants half of its revenue to come from foreign markets in 10 years. To accomplish this, the company is planning to be in every Southeast Asian country by the end of 2018, and is making inroads in the US and Europe. It may not need as much help in Southeast Asia since it’s already somewhat established there, but selling through Google would allow JD.com to meet American and European consumers on a familiar platform, which is key since many foreign consumers may not be aware of JD.com.

But the prospect of a US-China trade war could complicate JD.com’s expansion plans. With tensions rising between the two countries, and with the announcement of new tariffs from both sides, cross-border e-commerce may suffer because consumers and importers will face higher prices.

For JD.com specifically, this current climate is slowing down its US expansion. The company originally planned to enter the US market in 2018, but will now wait, CEO Richard Liu told CNBC. The partnership with Google could jumpstart its efforts, but it will still need to be ready to adjust to any new tariffs or changes that would affect its business.

Source: businessinsider.com; 20 June 2018

Amazon plots digital ad push with ad tech launch

The ecommerce giant is bringing new ad tech tools for publishers to Europe as it ramps up attempts to take on Google and Facebook in the digital ad market.

Amazon is pushing further into the digital ad market as it brings new ad tech tools to Europe aimed at helping publishers make more money online.

Amazon’s Transparent Ad Marketplace, which went live in the US a little over a year ago, is now launching in the UK, Germany, France, Italy and Spain. It offers digital publishers and app developers a new means to monetise their content using header bidding (a technology that allows multiple ad buyers to bid on ad space at the same time, meaning the highest bid should always win).

What differentiates this product is that it is cloud-based, meaning the bidding takes place on Amazon’s servers rather than on the publisher’s website. That in turn means publishers don’t have to input lots of codes from different ad buyers into their website, speeding up page load times.

Amazon also claims the product will offer greater transparency, enabling publishers to see which companies are bidding and which one won the auction.

“When we started offering header bidding several years ago, we quickly saw there were clear publisher, advertiser and customer benefits in moving ad calls to the cloud and giving publishers full visibility into who’s bidding on their impressions, who’s winning, and why,” explains Matt Battles, vice president of ad technology at Amazon.

The launch is just the latest sign that Amazon is looking to make a bigger move into the ad space. Emarketer estimates that, in the US, Amazon is the fifth largest generator of digital revenues with sales of $1.65bn in 2017 – more than Twitter and Snapchat. That figure is expected to rise to $3.19bn in 2019.

It is also the fastest growing player – with increases of 48.2% in 2017. But it will account for just 3% of the total US market in 2019, well behind Google and Facebook.

That Amazon would want to become a bigger player in digital advertising should come as little surprise given that it was a $209bn business globally last year, according to Magna Global. And Amazon has both the scale and data that means it could compete with the two biggest players.

However, Amazon has so far been reluctant to discuss its ambitions. Nevertheless, it is rapidly hiring sales people for the ad unit as its New York office, with the latest launch a clear sign it is hoping to attract publishers as well.

And brands including Procter & Gamble and Unilever are increasingly working with the company. For example, P&G says it has teamed up with the ecommerce giant to make use of its consumer ID data to reach consumers who are ready to buy. And that is the key to Amazon’s pitch to advertisers – its data on what people buy.

Source: marketingweek.com; 9 Jan 2018

WeChat opens its closed ecosystem for brands

A new feature called “brand zone” allows brands to sell directly to users even if they aren’t followers. Luxury brands are approaching the new function in different ways. Photo courtesy: CuriosityChina

A new feature called “brand zone” allows brands to sell directly to users even if they aren’t followers. Luxury brands are approaching the new function in different ways.

The new feature signals Tencent’s ambition to make WeChat an all-encompassing digital platform, connecting social media marketing, e-commerce, and payments.

WeChat has made a fundamental change to the way it works.

China’s most popular social media app has always limited its posts’ visibility to the sharer’s friends, or an official account’s followers. While this closed ecosystem limits the potential for content to go viral, it has been an asset for the app’s parent company, Tencent, and for users, who have been able to share more sensitive content among smaller groups without incurring the wrath of the government.

During the rollout of version 6.6.1 last December, however, WeChat quietly launched a new feature named brand zone, which allows brands to display their official WeChat accounts, boutique stores, and other customized content to users who don’t subscribe to their content. Instead, users can search directly for the brands they want to visit.

The new feature signals Tencent’s ambition to make WeChat an all-encompassing digital platform, connecting social media marketing, e-commerce, and payments.

According to the China-based digital marketing agency CuriosityChina, the new brand zone gathers all of a brand’s activity on WeChat in one place.

So far, a dozen major international brands have already utilized this new feature, with more than half of them being luxury and premium brands. Early adopters include Cartier, Gucci, Tiffany, Louis Vuitton, Longchamp, Michael Kors, Swarovski, Montblanc, and Lancôme.

On December 21, the official WeChat account of the American affordable luxury label Michael Kors, for example, released a post introducing the brand zone feature to followers. At the time this article was written, the post was viewed more than 14,000 times.

“This new function will allow brands to conduct flexible traffic control within the brand zone as it could be redirected from one section to another. [It is] also a good first step to a traffic monetization,” said Alexis Bonhomme, the co-founder and general manager of CuriosityChina.

A deep analysis of how each brand is utilizing this new feature shows different approaches to leverage and monetizes the boutique store function.

The Italian luxury powerhouse Gucci, for example, redirects consumers who land on the boutique store to its official Chinese e-commerce website, which was launched last July. So does Louis Vuitton, who also opened the first Chinese direct-to-sales website last year.

The prestige jewellery brand Cartier, on the other hand, has decided to redirect the traffic to its HTML5 (built-in web browser) WeChat stores to generate direct sales. And French fashion label Longchamp has linked the boutique store back to its mini program, which allows consumers to customize and purchase their signature handbags.

Similarly, the use of the customized section under the brand zone differs from brand to brand. Cartier once again directs traffic to its WeChat web browser stores, while Gucci sends consumers to its website to view new products, and Michael Kors gives visitors the option of customizing a handbag.

The launch of the brand zone on WeChat is a breakthrough move that greatly strengthens the ability of the app to assist brands’ sales. The arrival of high-end luxury players including Gucci and Louis Vuitton, who have long refrained from working directly with the domestic e-commerce sites like Alibaba and JD.com, further showcases the competitiveness of the retail ecosystem that Tencent has been building.

That media and individuals don’t have the same ability to broadcast to non-followers gives some indication of the direction China is heading in 2018.

Source: campaignasia.com; 15 Jan 2018

Touchscreens Turn You Into a More Impulsive Shopper

Psychology has plenty of advice for how to be a better shopper: Don’t rely on retail therapy to lift your mood. Think of spending like a diet, and plan when you’re going to cheat. Buy experiences over stuff — but only sometimes, because stuff can make you happy, too.

Here’s one more nugget of wisdom to add to the list: Not all methods of online shopping are created equal. According to a new study in the September issue of the Journal of Retailing and Consumer Services, the device we use may affect our ability to prioritize needs over more frivolous wants — and if you want to avoid overspending or shopping regret, it may be wise to limit your virtual browsing to your computer and stay away from the apps.

In the study, researchers from the University of British Columbia surveyed 99 people and found that they behaved more “rationally” when shopping at a desktop computer compared to a touchscreen device (in this case, an iPod Touch). In one experiment, for instance, participants using the touchscreen indicated that they were more likely to make a “hedonic” purchase, like a restaurant gift card, than they were to buy a more useful item like a grocery store gift card; for desktop users, the opposite was true. In another experiment, the study subjects took a test to measure their thinking style on a scale from experiential (a more freewheeling, impulsive thought process) to rational (careful, analytical). In general, those using the touchscreen were higher on the former way of thinking, and those on the desktop on the latter.
Part of the discrepancy, the researchers note, likely stems from the fact that touchscreens are just more fun to use: “When a consumer uses a touchscreen device, the novelty and fun generated by finger movements create experiential and affective feelings, in alignment with the playfulness and emotional nature of hedonic products,” they wrote.

“When participants are on their touchscreen device they lean towards a way of thinking where pleasurable products — things we don’t usually need — seem more interesting, and so they are more likely to make the purchase,” explains lead study author Ying Zhu, a marketing professor at UBC. “Whereas on a desktop they think in a more rational way — it might be because they associate their desktop device with logic and work.”

This isn’t the first study to support the idea that touch can influence consumer behaviour. Rather, it “adds to years of research that shows us that when people physically touch a product in a store, they are much more likely to purchase that product,” says Natasha Sharma, a Toronto-based psychotherapist and doctoral candidate in psychology at the University of Toronto. “This is because touch releases emotion, and gives us a sense of connection to an item.”

Sharma also suggests that for those of us who tend to be more impulsive shoppers already, choosing to make all purchases in person may be the best option of all.

“In a store, we have to make an effort to find items, carry them to a checkout counter, pull out our wallet, and pay, and all of those steps give our brain time to be less emotionally driven and impulsive,” she says. “With the element of touch playing a role now, I would recommend that people more at risk may want to remove shopping apps, for instance, or just stick with cash and debit purchases in brick-and-mortar stores.”

Source: thecut.com; 25 Aug 2017

Shell Malaysia launches first official online store on Lazada

Shell_Malaysia_Official_Online_Store_Screenshot

Shell Malaysia Trading has launched its first official Shell online store on e-commerce platform Lazada Malaysia.

The move is aimed to ensure the “genuine” Shell Helix motor oil more easily accessible to discerning car owners across Malaysia, said Shell Malaysia in a statement to A+M. The online store is also offering engine oil service packages at selected authorised workshops in the Klang Valley and Johor. They will also have access to product technical support on guidance for the respective Shell Helix motor oil types.

Car owners who purchase an engine oil service package from the online store will be contacted by the official Shell distributor to arrange their preferred service venue, date and time slot followed by a confirmation via SMS. In conjunction with the launch, shoppers will get an e-voucher from Lazada Malaysia worth up to RM30 for every purchase of Shell motor oil or oil service packages from 3 to 10 August 2017 on its online store.

Shell Lubricants executive director of Southeast Asia and Oceania, Troy Chapman said Malaysia was the first market in Southeast Asia to enable online purchase of genuine Shell Helix products and service packages from an official channel.

“Today, we are proud to be the first oil and gas company in Malaysia to have an official presence on a leading e-commerce platform such as Lazada Malaysia. This initiative would help expand our market coverage and reach significantly and complement our extensive brick and mortar network in this country, which has been built over the past 125 years,” Chapman said.

Lazada Malaysia, chief executive officer Hans-Peter Ressel added, “This is a winning collaboration for Lazada and Shell that first and foremost, benefits the consumers as they now have unparalleled access to a wide range of official Shell Helix products via our platform. Brands such as Shell recognise the strategic importance of e-commerce in Southeast Asia and we look forward to working together with Shell in growing its online presence not just in Malaysia but across the region,” he said.

Source: marketing-interactive.com; 3 Aug 2017