How to create frictionless Customer Experience
Keynote Speech for Future Internet Summit 2021
South East Asia is a rising region in terms of E-commerce with 2 main players (Shopee / Lazada) in the 6 main E-commerce markets with a total of 500 million potential consumers.
How does the online shopping experience in South-East Asia differ from Western shopping experiences?
Challenges of South-East Asia Markets
Despite of Singapore as modern hub with an urban population and high purchasing power, the situation of other South-East Asian countries looks different.
1. Thousand islands or a lack of centers
Countries like Philippines and Indonesia with thousands of islands make logistic and penetration out of the main island and urban centers very difficult. Furthermore countries like Vietnam (and partly Philippines) have 2 major urban areas in which both sellers and buyers are present and often demand products from the other center, which in case of Vietnam is almost 2.000 km apart.
2. Tier 1 cities vs. provincial cities or rural areas
Shopping behavior and purchasing power differs widely from Tier 1 cities and the ones in provinces or rural areas. In countries like Vietnam and Thailand a large part of the population lives outside the metropoles and needs to be reached in order to win the market.
E-commerce versus shops versus Social Commerce
In countries like Vietnam, 80% of the retail market is still dominated by traditional Mum & Pap shops while only less than 5% is online and the rest by national or international retail chains. This huge preference to shop and personal purchases makes it difficult for E-commerce to win the trust of customer especially in terms of quality, returns and refunds.
Another E-commerce competitor is Social Commerce the direct sales of small shops or private people of goods via social media (e.g. Facebook or local platforms like Zalo, Line, etc.). Social Commerce has still a lot of advantages in terms of Point to Point delivery, replacement, refunds, repairs etc. in which bigger E-commerce players try to catch up to replicate these more frictionless customer journeys.
Key Takeaways from the Keynote speech:
Successful E-commerce players need to avoid following traps in South-East Asia:
Focus mainly on APP & technology
Do not control the CX of your partners (shops, 3PLs, service center, etc.)
1 size fit all offer for all regions / age groups
Not enough feedback collection points
Do not pay attention to shop competition (M&P, shopping centers, retail chains)
Underestimate social commerce and its advantages & market share
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For the full video please click this link.