How can localization benefit you in e-commerce?

Jan 10, 2022 E-commerce


Southeast Asia consists of 11 countries, each with different languages and cultures, and different consumer behaviors. To win the e-commerce market in Southeast Asia, we must go deep into the local area and understand consumer preferences. Especially for daily necessities, the brand is not so important whether it is high end or not, what is important is whether it caters to the needs of the market. So what are the most needed products in Southeast Asia?

In this article, it will analyze how to achieve the breakthrough of localization of Southeast Asian e-commerce from 0 to 1, and what are the consumption habits of Southeast Asians from the aspects of product selection and operation services?


1. Speaking your customers' language in customer service

Currently, most countries in Southeast Asia have an e-commerce penetration rate of less than 3%, while China and the United States have an online penetration rate of about 25%. Therefore, as an emerging market with a young population of up to 60%, there are obvious opportunities for e-commerce growth in Southeast Asia.

However, the political environment, infrastructure, and consumer behavior vary from country to country in Southeast Asia, and there is no uniform standard. Therefore, only by truly understanding the pain points of people's needs can we better serve consumers. In this context, localization naturally becomes the element and trend of cross-border e-commerce development.

Zang Hao, the CEO and co-founder of IUIGA, a Singapore based e-commerce startup, pointed out several pain points of cross-border e-commerce localization: language, product standardization and localization, overseas warehouse building, after-sales, offline interaction and absorption of localized talents, respectively.

First, language is the biggest challenge in the initial stage of localization. In terms of language, it is not only necessary to translate into the local language, but also to consider the requirements of local typography. A survey once showed that 90% of respondents said they would choose their own language to browse the site, and 19% said they never browse the web in a foreign language, so providing foreign users with a great experience starts with the language.

In addition, the products also need to be adapted to local product standards. For example, plugs for electrical products require a separate safety certification in Singapore. Therefore, to ensure the suitability of the product overseas, it must meet the local customized standards. Then, in the middle of localization, it can consider the construction of overseas warehouse to better control the delivery cycle and return and exchange processing. Local shipping can shorten the delivery time and enhance the shopping experience of local consumers.

Among them, Zang Hao said that the biggest problem faced by cross-border e-commerce is still after-sales. The parcels sent from China cannot be returned when they encounter after-sales problems, and even if they can be returned, the shipping costs may be very expensive, which is one of the common headaches for sellers and buyers. In the middle and late stages of localization, it can consider building offline channels. It is difficult for cross-border e-commerce to try before you buy, so through the combination of online promotion and offline experience in two ways to complement each other, it can ultimately form a virtuous cycle. Finally, the localization team is also the biggest challenge. Each region needs localized talents, to carry out different regional culture of the friction, only the team thinking consistent to improve efficiency.


2. An in-depth understanding of local business customs

The most concerned topic for cross-border e-commerce sellers on localization is product selection. Zang Hao said that product selection needs to match audience needs and product perception, and the use of products must be combined with the local environment, so it is necessary to understand the market in depth, which is also a great test of the localization team. In addition, it is also necessary to ensure the stability of the supply and the price advantage of products.

Zang Hao shared his real-life case of product selection in Southeast Asia. Chinese insulation cup is usually used to keep warm, many users will choose the style of calm. Singapore users will generally be cold water insulation, and in the style, they will choose the style of sports, the reason is that many people are in the sports after the choice of cold drinks to relieve thirst. In addition, the home class slippers is a very common commodity in China, but in Singapore, it is not selling well. Because many people in Singapore are barefoot at home, instead, flip-flops that are convenient for going out are essential for Singaporeans.

That is to say, good product polishing is needed to understand the needs of users, not with the inertia of thinking about the choice, but the supply side needs to work well with the demand side. In fact, there is nothing special about the customers in Southeast Asia, the most special only lies in the habits and needs of life, and the products that can deeply match the needs of the audience will be welcomed by consumers.

In addition to product selection, localized operation is also important.

The first is payment. If a customer visits an e-commerce website without a payment method that he is familiar with, he may abandon the purchase because he is worried about the security of the purchase. For example, Singaporean users prefer to use credit cards because they can make points through them. And Indonesian users prefer offline transfers and e-wallets, and customers in Myanmar prefer bank transfers. It can be seen that the consumption habits shown by users in each place are completely different, and this is when sellers need to customize different strategies.

Interestingly, a special phenomenon in Singapore is that users here prefer to pick up their packages by their own. Because office workers prefer time control, most of them are not at home during the day, and many delivery companies usually do not deliver at night, so self-pickup is more popular. Another reason is that Singapore users rarely send their goods to the company, most people feel that shopping is a more private matter, they will separate their work and daily life very clearly. The security guards in the neighborhood will not be willing to collect parcels on their behalf. So, a convenient local pick-up service or a delivery service with a choice of time slots is sure to be very popular in this place.

Zang Hao also shared a lot of localized experiences in the shopping process. For example, unsuccessful orders on Chinese e-commerce sites are classified as unpaid or pending payment, a status that is difficult for Singaporean consumers to understand. After deeper research, it was found that Singaporean users also think in a more direct way and believe that orders that are not paid should appear in the shopping cart screen. These are examples of issues that are easily overlooked in a very localized shopping process experience.

The last is the habit of customer service communication. Most consumers in China are used to instant communication and prompt problem solving. Whereas in Singapore more people prefer to email to resolve issues, Malaysians and Burmese prefer Facebook messager to communicate. These examples are given to illustrate that the way different places behave is very different, so to continue to optimize from all aspects is very important to do a good job of localization.


3. Marketing is also needed localization strategy

When you are doing cross-border e-commerce, whether you are selling on a standalone site or using a platform, you need to consider the habits of users in your local market when marketing. A direct copy of a Chinese website system may not be appreciated by customers in the target market, so that's why sellers need to develop a set of local cross-border e-commerce marketing strategy to provide a good online shopping experience for local users. Whoever is more familiar with local cultural customs will be able to lead the local competition.

For example, holidays are different in each region of Southeast Asia, and customs vary from region to region for each holiday. Cultural differences also lead to different breakthrough points in marketing. Many teams in cross-border marketing will directly translate Chinese copy and then push it to customers, but such translated content is difficult to resonate. Therefore, Zang Hao suggests that marketing teams and content must be localized. By developing targeted marketing strategies from the actual customers, cultural differences and disconnects can be avoided. To promote products in a language that consumers understand and in a way that consumers are familiar with, it can meet consumers' needs more effectively.


4. Opportunities emerge in turbulent times

When it comes to the impact of the pandemic on e-commerce, Zang Hao said that the current impact of the pandemic is divided into two directions: positive and negative. The most direct impact is in the traffic, logistics and product supply chain.

The sudden arrival of the pandemic has inadvertently brought benefits to e-commerce, because consumers can only stay at home to shop during this period, and user behavior will quickly shift from offline to online, when localized teams can more quickly respond and adjust to the local pandemic.

For example, at the beginning of the outbreak, IUIGA's data grew while other industries experienced a significant decline. Sales of personal care products, kitchenware, furniture, and cleaning products all surged. However, the surge in online orders also created pressure on delivery, and it was important to adjust human resources in this area. During the pandemic period, the flight logistics of various countries were greatly reduced, so the logistics time of cross-border e-commerce was greatly affected, and the capacity of most factories in China was not fully restored. This is the advantage of overseas warehouse if it can prepare goods in advance, as mentioned earlier.

Finally, Zang Hao concluded: "Opportunities always appear in turbulent times, and the possibility of seizing them will be great if you are ready at any time. Many brands may choose contractionary development in this period, such as closing stores, but I think this is the best time to negotiate with shopping malls."

This is an article from WeChat official accounts Asia75(ID:Asia7_5).