DESPITE the health crisis, there’s no stopping the growth of online trading as e-commerce brands in the Philippines and the rest of Southeast Asia are expanding their direct-to-consumer (D2C) footprints by opening their own stores on the Internet.
As these businesses build on their existing marketplace to take control of customer journeys, the number of cyber shops in the country is seen to increase by 56 percent in 2022, according to Locad’s 2022 Key E-commerce Trends report.
This development is backed up by e-commerce data platform Storeleads, which shows that the region’s market has witnessed a phenomenal hike in the volume of web stores in Woocommerce and Shopify, which translates to a 50-percent and 61-percent growth, respectively, from 2019 to 2021.
Recorded web stores in the former three years ago were only 6,287, but the platform saw a significant surge in online shop tally with 9,554 to 12,731 in 2020 and 2021, accordingly. The latter followed the same trend, as the number of its cyber stores grew to 3,341 in 2019, rising to 7,792 in 2020, and then ending in 8,562 last year.
Locad Cofounder and CEO Constantin Robertz explained why this trend is set to take full swing this year and the gains of e-commerce brands going D2C will continue: “E-commerce has pushed the playing field wide open for the ‘rise of the many,’ with new brands popping up, offering strong product value in all categories, [and] challenging incumbents.”
Robertz added: “For brands that get it right, a [D2C] approach is a transformational opportunity offering higher margins, more customer insights, and a better control over the brand experience.”
The company found out that search volumes on merchant-and-seller-related queries are constantly inching up to 18 times compared to 2017. This could be attributed to the boost in D2C brands joining the e-commerce bandwagon, based on its study.
As consumers get ready for the possible recovery of the retail industry, Locad rounds up the major D2C outlooks and trends to embrace this year.
With the easing of the Covid-19 restrictions, the firm expects that many retailers would continue to pursue the digital D2C path to establish their brand and increasingly attract online shoppers.
Given that social media is playing in the e-commerce space, video content that propels online traffic will play a crucial role in consumer spending. In fact, it has dominated social-media platforms such as Facebook, YouTube, Instagram and most recently, TikTok.
Locad’s research identified video as a pressing factor, with half or up to 50 percent of Southeast Asian consumers surveyed indicating that a video they watched has affected their buying decision.
Video shopping or video content to promote products and services is becoming popular worldwide. It has been gaining ground in the Philippines, with the popularity of live selling, unboxing and tutorial video content that D2C brands leverage on, either on their web sites, or on their social-networking portals.
Based on 2022 estimates of Locad, customers will not only focus on fast delivery, but also opt for online retailers who have a dependable return policy. The firm is gearing up for this emerging trend by spearheading linkages with other brands which can make delivery more efficient, reliable and secure.
As the Asian region and the Philippines slowly inch back to the new normal, the rising e-commerce industry will confront challenges like supply-chain issues and consumers’ more demanding expectations. Nevertheless, brands that have a D2C strategy can position themselves strongly to thrive in their markets.