The seasonal rush has officially begun. Last month 10.10 kicked things off in APAC and many of us recently browsed the sales on Amazon Prime Day. But merchants cannot be complacent. There is a flurry of seasonal sales coming on the horizon both toward the end of the year and into 2021.
Alibaba’s 11.11 Global Shopping Festival (previously known as Singles Day) this week is likely to be the largest shopping event ever. Thanksgiving will drive sales across the United States, and Cyber Monday and Black Friday will capture the attention of those across the globe – and all of these days are quickly nearing with consumers eagerly anticipating the deals that await them and even loading their digital baskets in preparation.
Indeed, last year these online shopping days gave merchants a welcome boost in advance of Christmas and New Year. On Singles’ Day in 2019 alone, Alibaba saw a 26% uptick in year-on-year sales topping $38.4 billion in just a 24 hour period – making it the largest e-commerce event ever. With 2020 tipped to be even bigger, merchants cannot afford to miss out to jump on the bandwagon.
The year that e-commerce broke down borders
With everything happen around the global this year and people settling into the “new normal”, 2020 has really been the year that opened up the global cross-border e-commerce marketplace. With people around the world stuck at home, unable to visit family and friends, and not able to leave their countries, the e-commerce marketplace has provided a safe space for consumers. For merchants, this means a wider audience is primed to take advantage of online deals, on 11.11 and beyond.
Earlier this year, our report ‘Payments in a time of social distancing’ found that spending on areas including home décor, digital goods, women’s fashion, food and beverage, healthcare and cosmetics all increased over the summer months.
The findings highlight the opportunity that is still there to be captured by ambitious merchants this festive season and merchants across sectors should ensure they are prepared to capture their slice of the market.
What sets this year’s online shopping season apart from others?
In 2019, global brands such as Apple, Bose, Estée Lauder, GAP, H&M, L’Oréal, Nike, were among the nearly 300 merchants whose sales surpassed RMB100 million ($14.3 million) during Alibaba’s 11.11 event. In fact, in 2019, there were three times as many transactions as the previous few years.
So, apart from expecting the usual headlines of around this year’s Alibaba event like “New sales record achieved for 11.11”, what makes this year’s online shopping seasons bigger and better than the last?
Firstly, there are more consumers shopping online and in many cases cross-border, than ever before, and secondly, those people are shopping differently to the way they were last year.
This new online population spans all age, genders and location demographics – their purchasing power is strong. They are shopping online for goods and services they would have previously purchased in store, particularly as markets go into further states of lockdown as they suffer from second or even third waves of the Corvid-19 pandemic in the run up to the festive season. But finally, and perhaps most importantly, countries across APAC are also encouraging this shift toward a digital economy and online retail more now than ever before.
Across Asia, governments and enterprises are encouraging SMEs to accelerate their digital agendas to cope with the impact of COVID-19. In Indonesia, the government has launched the Bangga Buatan Indonesia (Proud of Indonesian Products) initiative to help SMEs onboard their operations onto e-commerce platforms and conduct online retail trade. Similarly, Shopee launched a region-wide Seller Support Package in April this year, with over 300,000 sellers, SMEs, and entrepreneurs signing up within the first month of launch.
The effects of these initiatives are two-fold. First, the entry of more sellers will help drive consumption across townships and cities that were previously less entrenched in the e-commerce ecosystem. Second, merchants will also gain access to the global e-commerce market and showcase their products to a wider global audience base.
Hence, apart from driving online sales to another all-time high, the presence of both new and experienced merchants in e-commerce necessitates a tailored approach that will help them to capture customers who are at different stages of their e-commerce journey.
Setting up your site for success
All too often, the “simple” act of consumer see and can use their preferred payment methods at the checkout is missed by merchants. Overlooking crucial details like this can result in missed sales opportunities, with average cart abandonment rates already estimated to be somewhere between 60 – 80%. Of those surveyed who abandon their carts, 20% do so because they cannot pay with their preferred payment method.
To ensure success, merchants should put themselves in the consumers’ shoes. Check the user experience of your shop, look at the payment methods available to you at the check-out – is your preferred payment method available, or would you walk away at the point of transaction?