SINGAPORE, 10 SEPTEMBER 2020 – Despite booming sales accelerated by COVID-19, eCommerce players have taken growth for granted at the expense of consumer experience, according to new research released today.

Over a third of consumers in ASEAN (39%) say they are less than satisfied with their digital commerce experience, citing concerns about delivery costs and services, product reliability and the authenticity of in-app reviews (See Appendix 1).

Conducted by leading data content and social research agency Blackbox Research in partnership with consumer intelligence platform Toluna, the research report – Into the Light: Understanding What has Changed for the ASEAN Consumer During COVID-19 – analysed current sentiments, expectations and behaviours of 4,780 consumers across six ASEAN markets.

Generational gap in digital proficiency closing rapidly

Yashan Cama, International Commercial Director of Blackbox Research says the study has confirmed a significant change in consumer behaviour in recent months driven by an increasing necessity to shop online.

“Southeast Asia’s retail landscape has undergone a seismic shift since COVID-19 hit the region. While it has been clear for some time that consumers are more digitally adept, it is also clear that older consumers have grown in comfort with digital tools and services. That generational gap really has shrunk in recent months.”

According to the report, while 56% of Gen Zers reported more online spending, the increase is as much driven by older consumers, with the largest increases occurring amongst Gen X (60%) and Millennials (59%) (See Appendix 2).

Cama added, “However, as more shoppers move online, their expectations of the online retail experience have evolved, and this is where eCommerce players must step up their game.”

ASEAN consumers reported a spike in online spending in response to COVID-19, with over half of those surveyed (59%) now spending more online, and the total online spend for the average ASEAN consumer increasing by almost a third (32%).

ASEAN consumers dissatisfied with digital experience

While consumers across the region have access to the same online services, consumer satisfaction varies from country to country. Indonesia (54%) and Malaysia (57%) recorded the lowest satisfaction levels in the region when it comes to online experiences. Even in Thailand and the Philippines, which recorded the highest satisfaction scores, close to a third were less than satisfied (30% and 33% respectively). Meanwhile, a considerable fraction of consumers in Vietnam (38%) and Singapore (39%) are also disgruntled (See Appendix 3).

The findings suggest that that while major eCommerce brands including Shopee, Lazada and Grab, enjoy high usage rates in the region, this growth has come at the cost of greater scrutiny from consumers (see Appendix 4).

Cama says that consumer frustrations about service quality could become make or break for major eCommerce brands.

“We expect some of these cornerstone brands to experience a shake-up in the coming months if these existing problems are not quickly addressed.

“Our report has shown that consumers expect more from the eCommerce experience and will only become more discerning in future. Online retail has transformed from a niche operation to a key consumer service, and standards must improve in line with these expectations. eCommerce players need to rectify core elements of the customer journey and the fulfilment cycle to address these pain points.

“With consumers now better educated and informed, and 5G technology on the verge of transforming platform capabilities, current market leaders may fall by the wayside if they don’t shift to a more seamless experience.”

Consumers in the ‘new normal’: Home as hub, shift towards local brands

But it is not just eCommerce on the rise; even though the majority of ASEAN consumers remain pessimistic about the region’s economic outlook, they have not cut back on their overall spending. In fact, almost half (48%) say their weekly household expenditure has increased (See Appendix 5).

This is despite close to half (45%) of those surveyed anticipating that their national economy will take a greater hit before recovering. Notably, consumers in the Philippines, Malaysia and Singapore anticipate a longer recovery period than their more optimistic counterparts in Vietnam and Indonesia who are more likely to anticipate a V-shaped recovery.

Cama says 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. Over 90% of people are happy working from home, and the majority aren’t missing going to the movies or shopping at retail outlets.”

“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. The home really has emerged as a new headquarters for many people. 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.”

Another notable shift in consumer sentiment is a resurgence of interest in local brands. Four in five ASEAN consumers said they were more likely to support local brands in the future, driven by a desire to strengthen their local communities and economy (See Appendix 6).

“‘International’ might be on the verge of becoming a dirty word,” says Cama, concluding that “companies will need to assess their portfolios and seriously consider how they can localise their brands to reflect the values that matter most to ASEAN consumers.”

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