In the world of online retail, authenticity and trust are key to converting browsers into buyers.
There is a perception that Asia’s shoppers are drawn to online retailers for the promise of a great deal. After all, eCommerce does away with expensive overhead costs associated with maintaining a brick-and-mortar storefront, meaning competitive prices online for the same goods.
However, many Asian consumers feel that eCommerce lacks reliability. While domestic deliveries in urban centres can usually offer accurate shipment tracking and delivery on time, online retailers often struggle to provide a trustworthy logistics solution that will instil confidence in buyers overseas or in remote locations. Furthermore, the proliferation of counterfeit branded products, which are advertised as genuine by online retailers, has become a problem for Asian consumers. These shoppers are growing increasingly likely to choose online purchasing channels based on authenticity and trust, even if it means paying a higher price.
The challenge in Asia Pacific eCommerce, then, is twofold: to earn consumers’ trust and deliver authentic goods at the right time to the specified destination.
For online retailers who can get this right the potential upside is very attractive: A slice of the global B2C eCommerce pie, which is projected to top US$4 trillion by 2020.
Online retailers can build trust with a seamless and reliable order fulfilment practice, which will also serve to make shipping attractive to overseas customers, customers in remote locations domestically and customers who require flexible delivery options because of their busy metropolitan lifestyles.
B2C eCommerce retailers should offer consumers the convenience of multiple shipping speeds and pricing options. They can also partner with logistics providers who can provide accurate information at every stage of the delivery process, so customers know the exact costs incurred upfront. And where possible try to provide shipping estimates in the customer’s local currency.
Another way to assure your buyers is with a fail-proof returns policy. Online retailers can go a long way to building customer confidence with flexible, hassle-free and localised return options that allow customers a convenient way to return their orders.
The biggest challenge, however, is offering visibility and time-definite answers to questions about where a shipment is and when it will arrive. Online retailers should choose logistics providers who can give their customers clear and realistic delivery times and inform them of possible delays caused by the realities of international shipping or delivering to remote rural locations, thereby managing expectations upfront.
There is an opportunity to build further confidence through user experience, when retail brands can develop local strategies for rich content and storytelling on their direct-to-consumer sites — strategies that build the kind of authentic shopping experiences that signal that products are genuine, winning customers’ trust and inspiring sales priced according to the brand’s own terms.
A brand builds its identity from the moment a customer visits its online store. Design elements such as high-quality product images can influence the perception of authenticity, as well as a staff page with names and images.
Even in the age of the Internet, a physical presence goes a long way towards creating a sense of reliability. Retailers should never underestimate the power of an actual brick-and-mortar address, a phone number and hours of operation. Additionally, one of the most important trust-building elements is including customer testimonials and reviews, which are shown to be almost as effective as personal recommendations from family and friends.
The Chinese Opportunity
Nowhere is the opportunity to capture market share through a reliable fulfilment solution more evident than in the shape of the Chinese online consumer.
While online marketplaces Tmall and JD have all but cornered the Chinese B2C market, with 50.4% and 20.7 % of the total domestic B2C sales, respectively, there are opportunities to leverage a reputation for reliability into sales.
Domestic Chinese eCommerce retailers are fending off poor reputations in the wake of food and health scandals caused by knock-off beauty products, tainted milk powder and cut-rate pharmaceuticals. These negative stories have not gone unnoticed. Product authenticity was the number one concern for 91% of Chinese shoppers in 15 cities, according to a 2015 survey by research firm RedTech Advisors. This is compounded by the challenge faced by Chinese retailers and regulatory authorities in cracking down on online piracy and counterfeit products.
As a result, Chinese shoppers have started looking overseas in search of reliable eCommerce solutions. The market potential of this demographic is huge. While the average Asia Pacific shoppers spend an average of almost US$350 per year on online purchases, 26% of Chinese shoppers said they spent more than US$1,000 per year. China’s Ministry of Commerce revealed that cross-border eCommerce in 13 Chinese cities was worth 100 billion yuan (US$15 billion) in the first half of 2017 alone, more than twice the figure from the same period in 2016.
This adds up to enormous potential for online retailers in Southeast Asia who can instil a sense of trust in Chinese customers and build positive relationships with them through quality goods and reliable service.
The Cross-Border Advantage
Across Asia, small and medium-sized online retailers can attract customers in ways that huge marketplaces cannot — by instilling trust and authenticity through a richer customer experience, for which consumers are increasingly willing to pay more. With simple strategies in experience and delivery, trust is easy to earn and maintain.