How Technology Reshapes the Luxury and Fashion Industry – 3rd Southeast Asia Retail Expansion Summit
aCommerce Indonesia had the pleasure of sharing their ecommerce expertise at the 3rd SEA Retail Expansion Summit on October 21-22 in Jakarta. The annual event gathers over 100 retailers/brands in a two-day conference to thoroughly discuss the latest trends, strategies, insights, and technologies. Attendees range from prominent industry leaders, retail owners, investors, architects, local public authorities, and service solution providers from across the region. Hadi Kuncoro, COO of aCommerce Indonesia, was invited as a keynote speaker.
With prior experience in both the retail and ecommerce industry, Kuncoro explained why now is the optimal time for brands who wish to expand their market to move online. Based on aCommerce white paper data, ecommerce shopping makes up only 1-2% of total retail sales in Southeast Asia. This compares with 16% in South Korea, 9% in the U.S. and 8% globally. Indonesia, as of now, has only penetrated 0.8% of the market in a country with 250 million people. The ecommerce market in Southeast Asia has enormous potential to grow in the coming three to four years.
Research conducted by many parties have predicted huge growth potential in Southeast Asia
Indonesia and Thailand will be the most attractive markets with greatest opportunity to boom
Which industries take up most of the “cake” in the Southeast Asian online market?
Fashion and apparel is the most popular, followed by electronics
Why is fashion so attractive?
According to Kuncoro, fashion symbolizes stratification in social life and helps express personality/self identity. People are either part of the trend or deemed “fashion victims” or outsiders. It’s an unspoken social competition. The fashion market is growing very fast in Indonesia because the middle class is increasing in size and more Indonesian female are trying online shopping. Find his presentation on Slideshare: “How Technology is Reshaping the Way Luxury and Fashion Industry Produces, Sells, and Operates“
So why online?
“Giving your business an online platform helps brands to acquire clients in an untapped market.“ – Hadi Kuncoro
Decisions to purchase can be made anytime, anywhere. Based on Hadi’s past experiences in Zalora and Saqina, the limited access and scarcity of shopping malls outside Java resulted in creating 60-70% online orders from the island. By providing alternatives to building offline stores, going online is the best example of filling a hole in the market. Brands can also try other channels such as marketplaces to test the ecommerce waters before using resources to build their own brand.com.
Looking at this huge opportunity, MatahariMall.com, an aCommerce client, built an online platform to complement their strong chain of offline stores (applying O2O – Online to Offline Model). Customers can order online and pick up their products offline at the nearest Matahari or Hypermart stores to their area.
It has been fairly clear that having an online presence will benefit an offline business greatly and not only for fashion or luxury brands. The problem now lies in moving online. There are many challenges, highlighted here, and leads to the crucial decision to choose the right partner who can manage the entire process end-to-end to continue growth of sales.
It is only a matter of time before competition in the online market will eventually boom as predicted by various research institutions above. We either start move now or we miss the train.