Thursday, July 28, 2011

When blogshops get physical

The desired outcome for many blogshop owners is to own physical retail shops.  Blogshop sites are just a startup mechanism to help them realize this. 

This article shows how online shops end up offline... and how offline stores can add an online presence to complement the business.

Particular note should go to the KissJane model, an oflline aggregator for blogshops so that online retailers can have physical rack space to show their products.  This is the current area of growth as there are now a handful of similar concept stores in Singapore and KL.

From: http://sgentrepreneurs.com/retail/2011/07/29/when-blogshops-get-physical/


When blogshops get physical

July 29, 2011 by Terence LEE
Generation Blogshop has come of age. While hundreds, if not thousands of garishly designed and brashly-colored blogshops have arrived and died, many online retailers have done well enough to venture into brick and mortar stores.
Tracyeinny, founded by cousins Jeannie Pang (check out SGE’s first interview with her) and Pamela Goi, can be considered a true online-to-retail pioneer. When they moved into their first storefront in Pearl’s Hill Terrace at the request of fans in 2009, the location was a ghost town.
“The place was dead, really.” says Jeannie. All they could rely on was their business savvy, and a whole horde of loyal fans.
The co-founders felt it was worth the risk however, since profits were already at a healthy level. And even if their offline operations bled, their existing business would not be badly affected.
In the end, such worries proved unwarranted since their fans flocked to the store like bees to honey.
About a year on, they outgrew their premises and the time came for them to move. While the rental cost was cheap, they could not renovate their store since the lease was renewed every six months, making tenancy uncertain.
“The landlords begged us to stay and even offered to cut our rent,” she says.
But sentimentality did not prevail. In 2010, they moved to their current location in China Town Square. Although a sleepy town at times, the workplace crowds hover in at lunchtime.
Jeannie says that their move into physical stores has paid off handsomely, with profit margins doubling ever since. They accumulated about $1 million in sales from January to May 2011, and expect revenue to hit about $4 million by year’s end, especially since they will be opening a new outlet at Junction 8 in August the same year.
That’s not too bad actually, considering that they were only generating about $600,000 in annual sales before they got physical.
They’ve even managed to do it without passing any costs to their shoppers, since they have the sales volume. It’s only a matter of ordering more of a particular item to pump up profits and meet the demand.
While the women at Tracyeinny certainly did their homework and minimized their risks, a new game changer has arrived to shake things up in the Singapore scene. Their pitch: An offline blogshop aggregator that lowers the cost and decreases the pain for blogshops who want to venture into the retail space.
Meet Ng Chong Kee (left) and Jason Low (right), who co-founded KissJane in 2010. And yes, the company was started by two manly men in their mid-thirties.
Photo: KissJane
“We want a plain Jane to come to our store and transform into someone you want to kiss,” says CK cheekily.
While he himself did not start a blogshop, he was intimate with the scene, having worked as a wholesaler supplying fashion items to various online retailers.
“I’ve observed the whole trend since the beginning, how they’ve evolved from their LifeJournal days and even changed the way they took their pictures,” he says, sort of like a daddy who watched his daughters grow up.
He was also at the sidelines too when the blogshop scene experienced growing-up pains — in a failed business that was Best of Blogshops.
BoB’s business model was considered innovative. They rented retail space at Far East Plaza, and in turn charged blogshops about $600 a month for putting clothes on their racks. On the surface, the business did splendidly, expanding to three units in the same shopping mall.
But everything crumbled in a flash. The business suddenly closed down and the owners disappeared without returning the deposits and upfront rentals. No one knew what became of them.
That’s when CK had the idea of starting the company. The business model would be a reincarnation of Best of Blogshops: KissJane now charges between $1,000 to $1,500 a rack per month, for a commitment of one year, as well as around 15% for the brand’s sales to fund the company’s marketing efforts.
He went to childhood friend Jason’s office, pitched the idea to him, and they agreed on the spot to start the business together. Both were determined to set things right.
“A couple of the blogshops that are now under us were badly burnt by Best of Blogshops. But we convinced them that we’re proper businessmen and won them over,” says CK.
He adds: “So we’re like a caretaker for them. If they do well, we do well. We’re here to help them with our management skills while they focus on doing what they do best — creating a style that people want to buy.”
Jason says that it’s a win-win situation for both players, since it lowers the barrier to entry for blogshops who want to dip their toes into retail space, while at the same time helping to defray the storeowner’s rental costs.
And with a presence in two prime locations, KissJane also helps them reach out to a “million footsteps on a monthly basis” and target consumers who don’t shop online.
The plan seems to be working out, as all the blogshops have not lost their investment so far and have made tidy sums throughout the last year. KissJane has broken even seven months after starting on October 23 with an initial investment of about $200,000, which includes rental costs,renovations, and initial deposit.
Demand for their racks are strong, with about 160 brands on the waiting list, although not many will make the final cut. They have a few criteria when considering whether to accept a blogshop: Being in operation for around one to two years, considerable social media presence, and passion in what they do.
Currently, 23 blogshops are already represented in their outlets, including popular names like Tracyeinny, Missy Pixie, Love & Bravery, VainGloriousYou, and MomoTeapots, all of which own their own physical stores.
True to form, KissJane brands itself as a “kaleidoscopic shopping experience”, with the promise of a faster turnaround of new designs compared to traditional fashion retailers, which often go by the four seasons.
CK whips out a calculator and began crunching numbers: With as much as four wardrobe changes a month, the fickle fashionista can expect 18,000 designs a year, color variations included.
“We don’t carry inventory either; the blogshops carry their own items,” he says.
While retailers like Tracyeinny and KissJane seem to be doing well, not everyone is sold on the idea of opening a physical storefront.
Photo: Vincent and Yvonne
Husband-and-wife team Vincent Goh and Tan Yi Fong is sticking to their online-only guns. Ministry of Retail, their first store with a potent online reach of about 11,000 Facebook fans, focuses on Korean fashion, while newly-minted Creme and Co stocks executive wear. The couple started working on their business less than two years ago.
While the couple declined to reveal sales figures, they’ve apparently done well for themselves: Yvonne was recently featured in Singapore tabloid The New Paper as one of the five top-earning recent graduates for Nanyang Technological University. Her salary: A cool S$12,000 a month.
For them, the huge cost involved is the main deterrence to going offline. Setting up a physical store requires a lot of cash for expenses such as rental, renovation, manpower and inventory.
“We have friends who own a number of retail outlets. They seem pretty busy and are always running around,” says Vincent.
Going into retail is more risky too. Locations that bring massive human traffic have exorbitant rental costs, while areas with low rental have low traffic. They would also have to fuss about renovation expenses and inventory management — which create extra work that they don’t need since in their current business model they would only purchase items from the suppliers after the orders come in, resulting in no need for storage.
Unforseen circumstances can wreck havoc too: “What if a similar epidemic like SARS comes again? Many retail stores closed down or went bankrupt during that period so we shouldn’t overlook the downside,” Vincent warns.
But what about shoppers who feel uncomfortable buying online, and prefer to touch and feel the real product? Addressing that, Yi Fong says that they have put in place an exchange policy that allows shoppers to return their purchases in exchange for another product or even web credits should they be dissatisfied in any way. That lessens the risk of wasting money on an unusable product.
“It’s something that’s common overseas, but not in Singapore,” she adds.
Whatever their approach, none of these retailers believe in exclusively sticking to one platform. In fact, all three businesses do bat on both teams in some ways. At the end of the day, the important thing is to strike the right balance and find an approach that suits them best.
While Ministry of Retail is primarily an online business, they do organise offline events to engage their customers. Recently, they held a party for Creme & Co customers to check out the new collection.
“Customers feel safer shopping at an online store if they can put a face to it. Physical interactions are still needed to foster relationships after all,” says Yi Fong.
For the guys at KissJane, who aspire to promote Singapore blogshops to an international audience, an online store (which also aggregates the best blogshops) is on the cards. Jason says that the new platform will allow them to test foreign markets and get a sense of their tastes and preferences.
“The brands trust our judgement but we want to careful in the process of our brand building. Our online presence will allow us to feel the ground with the countries we are targeting.”
They hope that by the time they set up their first brick and mortar operation overseas, legions of rabid KissJane fans would be waiting at the doorsteps.

Thursday, July 21, 2011

Report on eCommerce 2010

 Here's a recent press release by Visa which conducted a study on e-commerce in the Asia region.  The study was done by Nielsen, and below are some news that carried the story.

Basically, it shows that online shopping is growing and there's a lot of potential in the future.  Fashion and shoes have become a major category, together with airline tickets. It seems that shopping on foreign websites is HUGE, and the reason is that people are going online to get things they cannot find locally.  This backs up what I have been getting from my interviews. 

It must be noted that this study is really driven by an interest in online payment and credit card purchases.  It does not take into account the number of people out there who want to do online shopping but do not have credit cards, ie blogshop customers.


 From: http://www.visa-asia.com/ap/sea/mediacenter/pressrelease/includes/uploads/nr_ecommerce_monitor_overview.pdf

 N E W  S   R  E  L E A S E

Visa Survey Finds Nine in Ten Have Shopped
Online Over the Past Year

Respondents from six key eCommerce markets reported spending an average of
US$2,086 online on travel, share trading and electrical appliances
SINGAPORE, 4 January 2011 – Consumers in six rapidly growing eCommerce markets are
taking to online shopping in a big way, according to the 2010 Visa eCommerce Consumer
Monitor
1
. Almost nine in ten (87 percent) of the survey respondents across the six markets polled
said they had purchased products and services online in the past year. 
The survey asked 3,156 regular Internet users from mainland China, India, Indonesia, Malaysia,
Taiwan and Thailand about their online shopping habits and motivations.
Online shopping was most popular among respondents from mainland China and Taiwan where
almost all those surveyed (98 percent and 97 percent respectively) said they had shopped online
in the past twelve months. Purchasing online was also common practice for respondents from
India with 89 percent saying they had shopped online over the past year. 
The survey found that respondents across the six markets spent the most on travel, paying an
average of US$550 over the last 12 months for airline tickets, accommodation and travel agent
services. Other major spend categories included share trading (average of US$320), electrical
appliances and white goods (average of US$166), banking and financial services (average of
US$92) and computer hardware (average of US$75).  
Respondents across the six markets reported spending an average of US$2,086 over a period of
a year. Online shoppers from Taiwan reported spending almost double the survey average
(US$4,041), while shoppers from mainland China (US$2,557) and Malaysia (US$2,006) also
spent above the median.  
Paul Jung, Head of eCommerce, International, Visa, said: “China in particular continues to
attract attention of many eCommerce retailers because of the growing number of affluent
consumers who are going online to shop.”
                                              
1
 The Visa e-Commerce Consumer Monitor:  In August and September 2010, The Nielsen Company conducted 3,156
online interviews on behalf of Visa with regular internet users (those who accessed the internet at least once an week)
aged 18 and older from six markets (Mainland China, India, Indonesia, Malaysia, Taiwan and Thailand) in an effort to
measure their online usage behaviors. All figures in this survey are based on amounts as reported by respondents. Industry research shows that the number of internet users in China climbed to 420 million in
2010, a nine percent increase from the year before
2
. According to a report by China’s Ministry of
Commerce, Chinese consumers spent US$38 billion online in 2009, double the amount spent in
2008
3
.
“Going online to book airline tickets, purchase financial services or electrical appliances is
growing to be as common as paying a visit to the nearest mall or supermarket. In fact, many
shoppers who buy online feel it’s more convenient to shop on the internet than go to an actual
store because they can compare prices easily and shop at a time that’s convenient to them from
the comfort of home,” said Jung
According to the Visa survey, convenience dominates as the key motivator for shopping online
followed by bargain hunting. Respondents said they shopped online because it allowed them to
shop at any time (83 percent), to find and compare products easily (81 percent), and compare
prices to save money (81 percent). Seventy-four percent said they shopped online to avoid going
to the store.
When asked about their online shopping experience over the last 12 months, 76 percent of
respondents said they were satisfied with the ease of the online payment process and 72
percent said they were satisfied with the speed of their online transaction.
 Average Amount Spent Online in the Past 12 Months
Source: 2010 Visa eCommerce Consumer Monitor
1 Taiwan US$4,041
2 Mainland
China
US$2,557
3 Malaysia US$2,006
4 Thailand US$1,763
5 Indonesia US$1,572
6 India US$1,547
Regional Average  US$2,086
###
                                              
2
 China Internet Network Information Centre, The 26
th
 Survey Report, 15 July 2010,
http://www.cnnic.cn/uploadfiles/pdf/2010/8/24/93145.pdf
3
 Ministry of Commerce, China, China eCommerce Report 2010, http://www.caijing.com.cn/2010-08-31/110509514.htmlAbout Visa: Visa is a global payments technology company that connects consumers,
businesses, financial institutions and governments in more than 200 countries and territories to
fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most
advanced processing networks—VisaNet—that is capable of handling more than 20,000
transaction messages a second, with fraud protection for consumers and guaranteed payment for
merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for
consumers. Visa’s innovations, however, enable its financial institution customers to offer
consumers more choices: pay now with debit, ahead of time with prepaid or later with credit
products. For more information, visit www.corporate.visa.com
About Visa eCommerce Consumer Monitor:  The Visa eCommerce Consumer Monitor tracks
online spending trends of internet consumers in six key markets in Asia Pacific. The Monitor also
asks respondents about drivers and barriers to spending online, and their future intention to make
purchases on the internet. The findings from this Monitor offer important insights into consumer
online spending behaviour and are part of Visa’s commitment to providing information that help
economies grow.  The fieldwork for this data was conducted in August and September 2010.


From:http://www.retailasiaonline.com/magazine/archive/2011/mag2011-02_story07.html


Magazines Archives - 2011 Feb

More Asia-Pacific consumers are shopping online, says Visa.Story 7 - E-commerce
More consumers across the Asia- Pacific region are turning to online shopping, with China, Taiwan and India leading the region, a new report by Visa International stated. Close to nine out of 10 respondents from six markets across Asia revealed in the latest edition of the Visa eCommerce Consumer Monitor that they had shopped online in the past 12 months.
Speaking with Retail Asia, Paul Jung, Visa’s head of eCommerce, International, pointed out that for the 2010 study the group identified the six markets, namely China, India, Taiwan, Malaysia, Thailand and Indonesia, as “emerging markets in terms of online spend”.
“They are still considered under-penetrated and haven’t even reached their potential yet,” Jung stated, adding with the exception of Taiwan.
“Out of the six markets, China, Taiwan and India came out with the most respondents who were shopping online. Ninetyeight per cent of respondents in China shopped online over the past 12 months, followed by Taiwan with 97%, [while] the average spend came to about US$2,086, across the six markets,” Jung elaborated.
The report also noted that Taiwan nearly doubled the median spend in online shopping with US$4,041, while China beat the average with US$2,557, followed by Malaysia with US$2,006.
He pointed out that it was interesting that of the six markets surveyed, 87% of respondents shopped online in the past 12 months, where about 10 years earlier in developed markets, only about 57% of Internet users engaged in online shopping.
“The cycle of people converting from Internet users to online shoppers is getting shorter,” Jung continued, adding that respondents were also increasingly opening up to cross-border online shopping.
“Across the six markets, one in three, about 32%, responded that they shopped overseas, and the most popular category in shopping overseas was clothing and shoes, which accounted for about 25% of those who shopped overseas,” he said.
Another trend Jung noted was the growing segment of online-savvy shoppers who are looking out for the best deals. “If consumers are very experienced in shopping online, they’ll take more risks and actually look at the prices and go to merchants less known who offer more competitive prices,” he explained.
The convenience of online shopping and the technological evolution, such as mobile devices especially with smartphones, is also driving the e-commerce growth in the region, said Jung, and retailers need to keep their eyes and ears open on such trends and stay ahead by understanding consumers.
He also added that while most of the cross-border shopping sees Asian consumers e-shopping in the US and the UK, there is a huge potential for Asian merchants to reverse this trend, so that they sell more to overseas markets.
“The Asia-Pacific region is an export-oriented market and economy. E-commerce is going to happen, and everybody is expecting it to happen … but one of the biggest barriers for the online merchants here is the language,” Jung stated.
And while security remains the No.1 concern for shoppers regardless of their level of experience in online shopping, Jung revealed that the company has launched platforms such as the Verified By Visa programme to add an extra level of security to customers across the region.
“Security has always been one of Visa’s top priorities and I think it should also be a top priority for any retailer, because once you lose that trust, it is very difficult to bring the shoppers back,” he continued.
Although the region is just “scratching the surface of payment”, Jung remains optimistic that the next 12 months will see the e-commerce sector continue to grow. “On the average, 81% of respondents said that they intend to shop online in the next 12 months, and I think that’s a very good response. In the Asia-Pacific, as of June 2010, 825 million people have access to the Internet. That’s approximately 40% of the global Internet users. So it just shows you the potential growth in Asia,” he said.
To view other stories, get a copy of Retail Asia. To subscribe, please download the subscription form from http://www.retailasiaonline.com/subscription.html




From: http://techcentral.my/news/story.aspx?file=/2011/3/23/it_news/20110323161307&sec=it_news


Many Malaysians buying from overseas sites

KUALA LUMPUR: Many Malaysians on the Internet are shopping overseas. A consumer survey shows that one in three websurfers here are patronising international retail sites.
And the reason they prefer to buy from overseas merchants? It's because they get a wider selection of items, the products or services they want are not available locally, prices are lower, and/or they get better discounts from the foreign vendors.
The 2010 Visa eCommerce Consumer Monitor surveyed 558 Malaysian websurfers from August to September last year. It found that 36% of the respondents had shopped at an overseas website in the past 12 months.
Websites in the United States were the most popular for these shoppers; 31% of the respondents who shopped overseas said they had bought from these sites at least once in that period.
Most of the shoppers bought clothing and shoes (23%) while the others bought airline tickets (21%) and books (20%).
According to Visa Malaysia country manager Stuart Tomlinson, the increased Internet penetration in the country is fuelling the growing popularity of online shopping among Malaysians.
"An Internet-savvy nation will see more of its people, especially those keeping up with the latest fashion trends, turn to shopping at overseas retail websites," he said.
The survey also revealed that three quarters of the respondents were confident that their payments online were secure.
"We know that online shoppers consider payment security an important factor when transacting over the Web," Tomlinson said.
"Visa provides its cardholders an added layer of security with its Verified by Visa online authentication platform."


 Online travel and fashion draws Malaysians
AvantiKumar | March 31, 2011
Stuart Tomlinson, Country Manager, Malaysia, Visa. 
PHOTO - Stuart Tomlinson, Country Manager, Malaysia, Visa

KUALA LUMPUR, 31 MARCH 2011 - One in three Malaysians shop on overseas sites for clothes and travel, according to the 2010 Visa eCommerce Consumer Monitor.
"US-based retail websites are most popular with Malaysian consumers shopping overseas," said global payments technology provider Visa's Malaysia country manager, Stuart Tomlinson. "Of the 558 people surveyed in Malaysia in the third quarter of last year, more than one in three (36 per cent) said they had shopped on overseas websites in the past 12 months. Clothes and shoes (23 per cent) were the most popular items purchased followed by airline tickets (21 per cent) and books (20 per cent)."
Tomlinson said three quarters of respondents (74 per cent) who had shopped at an overseas website said that they were driven to these sites because the products and services they wanted were not available locally. "A wider selection of goods, (39 per cent), lower prices (33 per cent) and better discounts (31 per cent) were cited as reasons for turning to overseas websites."
"Online shopping is growing in popularity and we expect that increased internet penetration and an internet savvy population are factors that will see more people, especially those interested in keeping up with the latest fashion trends, turn to shopping on overseas retail websites," he said.
He said the research indicated that most Malaysian internet users (74 per cent of respondents) have confidence with the payment security they experienced during their last online purchase experience. "We know that online shoppers consider payment security an important factor when transacting online. Visa provides cardholders with an added layer of security with Verified by Visa and a one-time password service. Consumers in Malaysia can make online purchases with their Visa card with the assurance that their data will be processed securely, regardless of whether they shop on local or overseas websites."
"According to the survey, US-based websites commanded the largest share of cross-border business among internet shoppers in Malaysia," said Tomlinson. "Thirty-one per cent of respondents who had shopped on an overseas website in the past twelve months said they had made a purchase from a US-based website at least once."
The Visa eCommerce Consumer Monitor tracks quarterly online spending trends of internet consumers in six countries and territories in Asia Pacific. The Monitor also asks respondents about drivers and barriers to spending online, and their future intention to make purchases on the internet.

Wednesday, July 13, 2011

Online shopping statistics in Singapore in 2010 study by Paypal

Paypal's study on online shopping in Singapore in 2010.

From: http://www.mediabuzz.com.sg/asian-emarketing-latest-issue/1247-paypals-first-comprehensive-study-on-online-and-mobile-shopping-in-singapore


PayPal’s First Comprehensive Study on Online and Mobile Shopping in Singapore

E-mailPrint
Conducted by Nielsen in January and February 2011, the wide-ranging PayPal Online and Mobile Shopping Insights Study sampled 407 Singapore shoppers for their online and mobile shopping transactions over the past 12 months, exploring potential growth and respective trends in Singapore.
It is PayPal’s first ever comprehensive consumer survey in the country to measure local attitudes and behaviours when shopping online and on mobile devices.
The research confirms that online shopping is increasingly gaining popularity in tech-savvy Singapore, which is no surprise, but what is amazing is how fast it has grown. According to PayPal’s study, the size of the Singapore online shopping market reached S$1.1 billion in 2010 and is forecast to reach S$4.4 billion in 2015. Even though 1.2 million Singaporean online shoppers (above the age of 18 years old) had an average spend per head of S$1,492 over the past year, two-thirds of the online shopping spend (S$730 million) came from the middle income and above groups in Singapore.
The study also reveals the unique preferences of Singaporean online shoppers and the business implications for local retailers, strengthening Singaporeans’ reputation as being one of Asia Pacific’s most affluent and sophisticated online shoppers.
Contrary to popular belief that Singaporeans shop online primarily on overseas websites, a significant portion of online retail purchases are domestic as online shoppers spend nearly 40% (approximately S$420 million) on local websites. Even when Singaporean online shoppers do buy from overseas websites, they cite “unavailability” (58%) and “greater choice” (48%) as more important reasons than “less expensive” (44%), “better discounts” (42%) or “strong Singapore dollar” (35%). Therefore, local merchants can benefit from the growth in domestic online spending as well as offer a wider choice and selection of goods (instead of competing on price) to get a larger slice of the online shopping market.
Elias Ghanem, PayPal’s General Manager for South East Asia and India, said, “With the online shopping market growing so quickly and breaking through the billion dollar mark, Singaporeans are clearly finding great value and a wide range of products and services on the Web, be it on domestic or overseas websites. The study results prove to local merchants that they should embrace a multi-channel approach for both in-store and online retail experience, with mobile as an emerging platform, in order to be wherever their customers are.”

Some of the key findings for domestic and cross-border online shopping in Singapore:

  • Online shopping is more than just airline and hotel bookings. While the travel category is tops, it only accounted for S$307 million or 28% of the online shopping market in Singapore. Other key online shopping categories include: Fashion/Beauty (S$146 million, 13% share), Entertainment/Lifestyle (S$143 million, 13% share), IT/Electronics (S$117 million, 11% share), General Insurance (S$83 million, 8% share), and Gifts/Collectibles (S$75 million, 7% share).
  • Singaporean online shoppers buy different items between domestic and overseas websites. Movies/events tickets (S$36 million) and general insurance (S$36 million) are top categories for domestic online shopping, while books (S$41 million) and movies/music/video games (S$24 million) are top categories for cross-border online shopping. In addition, online shoppers buy nearly double the amount of clothing (S$84 million) and travel packages (S$38 million) on overseas websites compared to domestic sites.
  • Enhancing security can boost online spending, especially for the high income group. Slightly more than 4 out of 10 say that current credit/debit card security measures for online transactions are inadequate and half believe they are taking a risk every time they transact online with their credit/debit cards. Yet, increasing safety measures would convince nearly 6 out of 10 to spend more online. In fact, the high income group was the most concerned about security measures (57%), but are the most willing to increase their online shopping if safety is improved (65%).

In addition, these were the key findings for m-commerce and mobile shopping:

  • Mobile shopping is in its infancy stage. Over 364,000 Singaporean online shoppers spent S$43 million on their mobile devices last year, approximately 4% of the online shopping market. Mobile shoppers bought low-priced items like movie tickets, fashion items and mobile apps, leading to an average spend per head of S$119 over the past year.
  • Growth potential for mobile shopping is significant. 4 out of 10 online shoppers in Singapore are willing to make a purchase on their mobile phones. More importantly, nearly 6 out of 10 of the high income group would be interested to do so, and they accounted for more than half of the mobile spend last year. In addition to more Singaporean online shoppers interested in buying on their mobile devices, they would like to buy higher-priced items like IT/electronics, general insurance and collectibles, boosting the potential size of the mobile shopping market.
  • Convenient, safe, and fast mobile shopping experience will be critical for mass adoption. The top three barriers to mobile shopping are small screen size (55%), security concerns (52%) and slow mobile Internet connection (42%).
Based on the online and mobile shopping study results, Elias concluded, “The strong call-to-action for local merchants is to quickly adopt a multi-channel retail strategy, provide greater choice in their online product offerings and offer more secure online payment options. In order to sell to mobile shoppers, they should choose a safer mobile payment method that can be completed in as few clicks as possible.”

Malaysian Online Spending 2010 Study by Paypal

Paypal did a study on Malaysian online spending, via the Lowyat website:


 22 April 2011 01:13 PM

Think you're addicted to online shopping? Don't worry, you're not alone. According to PayPal's first ever "Online and Mobile Shopping Insights" study in Malaysia, Malaysians are groaning to be sophisticated and affluent online shoppers. The study which was conducted by The Nielsen Company, the size of the Malaysian online shopping market reached RM1.8billion in 2010 and by 2014, it will grow to a staggering RM5billion. The survey also showed that there were 1.1 million Malaysian online shoppers last year (above the age of 18) with an average spend per head of an interesting RM2,461 and no surprises they come from the middle income and above groups in Malaysia.

“With the online shopping market growing so quickly and nearly reaching the two billion Ringgit mark, Malaysians are finding great value in buying products and services via the Web as part of their daily lives,” said Elias Ghanem, PayPal’s Managing Director and General Manager for South East Asia and India. “In addition, Malaysians prefer to shop on local websites and are looking online for a wider range of higher-quality goods, not just the lowest price. So domestic retailers have a chance to compete with overseas websites and should set up their online stores now to capture a slice of the RM1.8 billion online shopping market.”

Hit the jump for a more detailed breakdown of the findings from the study
PayPal Online and Mobile Shopping Insights Study - Malaysia 2011
A Quick Snapshot

About the study
The PayPal Online and Mobile Shopping Insights Study – Malaysia 2011 is the company’s first ever comprehensive consumer survey in the country to measure local attitudes and behaviours when shopping online and on mobile devices.

Conducted by The Nielsen Company in January and February 2011, the wide-ranging study sampled 400 Malaysia online shoppers aged 18 and above, for their online and mobile shopping transactions in the past 12 months, including a breakdown of specific demographics, such as personal income level, and also explores the potential growth of the online shopping market and the upcoming mobile shopping trends in Malaysia.

What the study shows
The study reveals some interesting local trends that strengthen Malaysians’ reputation of being one of Asia Pacific’s most affluent and sophisticated online shoppers.

Malaysians are spending more online each year
      The size of the Malaysian online shopping market was RM1.8 billion in 2010 and is expected to grow to RM5 billion by 2015.
      With 1.1 million online shoppers 18 years and above, Malaysians spent an average ofRM2,461 per person in 2010
      70% of the total online shopping spend came from the middle income and above[1]groups in Malaysia.
      Online shopping in Malaysia is becoming more mainstream and a bigger part of Malaysians’ daily lives as shown by the wide range of categories:
o   Travel = RM435 million (24% share)
o   Bill payments = RM329 million (18% share)
o   Entertainment and lifestyle = RM255 million (14% share)
o   IT and electronics = RM218 million (12% share)
o   General insurance = RM205 million (11% share)
o   Fashion and beauty = RM181 million (10% share)
o   Gifts and collectibles = RM68 million (4% share)

Malaysian shopaholics are buying more from local websites
      Malaysians are also contributing to the local economy with 45% of online shopping conducted on local websites (worth RM825 million).
      Malaysians are purchasing nearly 2.5 times as much airline tickets from local websites (RM173 million) vs. overseas websites (RM72 million).
      Financial products/services (RM78 million) and health/beauty products (RM29 million) are mainly local online purchases.
      Clothings/shoes/accessories are slightly larger for local (RM48 million) vs overseas (RM41 million) online purchases.

Malaysians shop on overseas websites for greater variety and higher quality of products, not just for lower prices
      35% of the online spend in Malaysia is with overseas merchants - worth RM627 million
      Malaysian online shoppers cite “unavailability” (65%), “greater choice” (55%) and “higher quality” (36%) as more important reasons than “less expensive” (35%), “better discounts” (32%) and “strong Malaysian Ringgit” (23%) when buying from overseas websites.
      Nearly twice as much spent on books from overseas (RM63 million) vs. local websites (RM36 million).
      Again, nearly twice as much spent on movie/music/game downloads from overseas (RM51 million) vs local websites (RM27 million).
      Malaysians’ favourite countries for overseas online shopping were the US, Singapore, UK, China and Hong Kong.

Safety and assurances are key features Malaysians want when shopping online
      Security is a top concern for online shoppers in Malaysia.
o   4 out of 10 Malaysian online shoppers said that current credit/debit card online security measures are inadequate.
o   Nearly 6 out of 10 believe they are taking a risk every time they transact online with their credit/debit cards.
      However, increasing safety measures would convince nearly 7 out of 10 to spend more online.
o   In fact, the middle income[2] group, which accounts for the largest share of the online shopping market (42%), is the most willing to increase their online shopping if safety is improved (72%).
      For cross-border shopping, assurances like secure online payment method (47%), protection for purchases (34%), and financial details not shared with merchants (31%) are more important than fastest way to receive item (21%) and cheapest payment method (17%).

Malaysians are keen to try out mobile shopping
      Over 254 thousand online shoppers spent RM100 million on their mobile devices last year, approximately 6% of the online shopping market value.
      The top activity for mobile shoppers was paying the bills on the go (22%), followed by buying low-priced items such as movie tickets (21%), books (15%) and movie/music/game downloads (14%) which led to an average mobile spend per head of RM388 in the past year.
      4 out of 10 online shoppers are willing to make a purchase on their mobile phones.
      The top three barriers to mobile shopping are small screen size (48%), slow mobile Internet connection (48%) and security concerns (37%).


[1] with personal earnings of RM4,001 and above
[2] with personal earnings of RM4,001 to RM8,000

Friday, July 8, 2011

Let's go 'social shopping'

As blogshops morph into Facebook stores and as owners leverage a range of social media tools into their online stores, it becomes very clear that blogshops appear to be a forerunner to the social shopping models that are flourishing now.

This article highlights the many variants of social shopping, including Facebook stores which are an emerging breed of blogshop models.

From: http://www.bbc.co.uk/news/technology-13712375

Let's go 'social shopping'


Bullring shopping centre in Birmingham  
Can the social experience of real shopping help improve web retail?
Offline retailers have long held that online shopping will never replace a visit to the shops because sitting at a computer clicking on links is just not as much fun as hanging out at the mall.

But a quick glimpse at any high street with its rows of closed-down signs, pound shops and charity outlets suggest that consumers don't entirely agree.

Now a new phenomenon - dubbed social shopping - threatens to incorporate the missing social element in online shopping and possibly destroy even more bricks and mortar stores.

Social shopping encompasses a range of ideas, from shopping within social networks, to shopping-specific search engines that use friends recommendations to group buying sites such as Groupon.

Groupon harnesses the power of the crowd to bring people daily deals that they may not even have known they wanted - from manicures to mountain biking.

It has a very simple business model - people sign up for offers and once the required number of people are registered, the deal is confirmed and a voucher is sent to your inbox.

The firm has five million users in the UK alone, and is said to be the fastest growing company ever.
It puts much of its growth down to web-based recommendations - people see a deal and spread it among their online friends but not everyone is convinced by its social credentials.

"There are a lot of myths about how social Groupon is. In the beginning many deals may have been spread via social networks but now it is primarily through a daily e-+mail," said Forrester analyst Sucharita Mulpuru, who has recently authored a report on social shopping.

Word-of-mouth may have helped catapult Groupon into the limelight but its quarter of a billion dollar marketing spend probably played an even bigger role, thinks Ms Mulpuru.

Social store As the world's largest social network Facebook is keen that people talk to retailers as well as their friends and it is trying to figure out how to make the most out of social shopping.

It boasts that half of the top 25 retailers use the site but the level of integration varies, from those who simply see it as a way to gain fans to "like" their brands to firms, such as clothing firm Asos, which are happy to allow users to make purchases from within the social network.

Asos is one of Facebook's biggest successes. It puts its full catalogue on the site and its fan page has 800,000 members.

Amazon uses the social network to offer product suggestions based on likes and favourites pulled from users' profile information.

Personalisation
Woman looks in the tweet mirror The Tweet Mirror invites your friends into the changing room
It has also introduced gift recommendations which let you know which of your friends have upcoming birthdays and suggests presents for them based on what they have shared with Amazon.

Ticketing firm TicketMaster offers anyone who has bought a ticket on its site the chance to share the purchase information with their Facebook friends. It claims to have increased its revenue as a result of this feature.

Meanwhile Levi's has what Facebook describes as a "social store front", offering users jeans that their friends may have liked and even using information to influence its supply chain. So if people in London are "liking" the skinny jeans most and people in Manchester are "liking" the bootcut style they can simply adjust their stock to match this.

And herein, for Ms Mulpuru, lies the real power of social shopping - as a tool for retailers.
"There is a ton of data that people share about themselves that the retailer can use to make more relevant offers. It is far more a personalisation tactic than about getting or retaining customers," she said.

Facebook's director of business development Christian Hernandez believes that Facebook can help users "connect to brands that they care about" and he reckons that among his Facebook friends there is plenty of chatter about shopping.

But Ms Mulpuru is not convinced it will become a shopping hub any time soon.

"TV didn't transform retail and neither will Facebook. At the end of the day no-one buys something as the result of a link. The truth is that large brands just have not experienced any sizable gains in direct sales from Facebook," she said.

"In spite of hundreds of thousands of developers having been given the opportunity to create useful shopping applications or to integrate commerce into Facebook, there has yet to be a blockbuster success," she added.

It hasn't stopped a raft of companies betting that social and shopping is a powerful combination.
Three former Yahoo executives have set up a dedicated social network aimed entirely at shoppers.
Dishwasher reviews?
 
Dubbed ChoozOn , the start-up is built entirely around shopping and personalised deals. It allows users to manage their various deals and discount services and upcoming apps for the iPhone and Android handsets will highlight nearby deals.

Users can sign up for loyalty programmes and if they share their shopping preferences and the brands and retailers they like best, the shops will fashion specific discounts for them.

Meanwhile UK start-up Shopow (Shopper Power) offers a shopping search engine that aggregates thousands of retailers and products across all areas of consumer goods. Like other price comparison sites it allow users to compare goods by criteria such as price, retailer, service and delivery, but it also integrates various social functions.

It will display reviews and deals that have already been collected around a product, as well as drawing in more personal views.

"Shopow is somewhere where you can interact with friends but also rate your recent purchases," explained co-founder Kevin Flood.

He thinks people are far more likely offer to useful feedback via such a site than on Facebook.
"While some deals are appropriate to share on Facebook, you wouldn't share your experiences with a dishwasher on there," he said.

The ability of retailers to engage directly with consumers is a very powerful one and some have taken bold steps in this direction.

In February, US fashion designer Derek Lam harnessed the power of the web when he asked eBayers to vote on which of 16 dresses should form his summer collection. More than 120,000 people voted and the five winners went on sale in May.

Not wanting to be left out, the high street too is embracing social media.

In March, London's largest shopping centre Westfield unveiled a tweet mirror that allowed shoppers to try on an outfit and share the image in real time with friends and followers on Twitter.

The mirror, brainchild of Dutch firm Nedap Retail, is already installed in dozens of shops in Belgium, France, Germany and Switzerland.

How many shoppers want to invite their online friends into the changing room is unclear but it offers a small glimpse of what offline retailers will have to do if it wants to persuade consumers away from their screens and back to the mall.