With a tap, a swipe or a shake, today’s consumers are redefining what it takes to succeed as an ecommerce player in Southeast Asia. Mobile is no longer just one of many platforms but possibly the apex selling channel for all e-retailers. This is highlighted by the widely cited paper from Google and Temasek, which estimated that more than 90% of Southeast Asia’s internet users are using smartphones as their primary device, with “an increasing trend of customers increasingly preferring to use mobile applications”, as corroborated in a Frost & Sullivan’s e-commerce study.
Given the undisputed popularity of mobile devices, has mobile usurped desktop as the leading platform in driving online purchases? Crunching our proprietary database containing traffic and transactional data from over 1,500 merchant partners across 7 lifestyle categories, we present to you our findings on ecommerce across 5 key economies in Southeast Asia (Singapore, Malaysia, the Philippines, Indonesia and Thailand). In the following sections, we present a comprehensive view of platform usage in the current ecommerce landscape and how we imagine that to evolve in the near future.
Total Traffic: Mobile VS Desktop as of Q2-2018 in Southeast Asia
Growth in Traffic: Mobile VS Desktop over 4 quarters from Q3-2017 to Q2-2018
Even with a commanding lead, recent growth in mobile app traffic shows no signs of deceleration. In fact, its growth continues to outpace that of desktop. The difference in growth rate is particularly pronounced during the year-end period in 2017, with mobile app growing at least three times more than desktop.
Our analysis attributed this relentless growth in mobile app traffic to a confluence of growth drivers that are shaping today’s ecommerce industry.
1.Growth in ecommerce sales continues to be lifted by the secular shift towards online consumption. We see double-digit growth in all online platforms and categories on a quarterly basis. The broad-based growth is particularly pronounced in Indonesia and Thailand, where ecommerce markets are predicted to expand apace by 44% and 25% respectively over the next two years, according to market research portal Statista.
2.Outstanding mobile app traffic volume reflects users’ higher engagement rates with their mobile devices. This is in part due to the innovations made in the mobile app space to appeal to the users. Notably, ecommerce giants have been creating mobile-app features to heighten stickiness of the platform beyond purchasing. Shopee Shake, which required a user to shake one’s mobile device as fast as possible, recorded a total of over 100,000 users within days of launch. Lazada’s ‘Slash It’ app feature, launched alongside ShopFest 9.9 Rewards Day in September 2018, had a social element whereby users were to invite their friends to help slash product prices.
We analysed our traffic data by the hour of a typical day and found that users are far more engaged with their smartphones regardless of the hour of the day, supporting the view of higher engagement rate on mobile devices amongst users.
Daily Traffic: Mobile VS Desktop on an hourly basis as of Q2-2018
The most compelling difference is typically observed at 11.00PM with close to 7 times difference in traffic volume between mobile app and desktop.
3.Marketing innovations by key ecommerce players also contribute to the secular growth in online sales. The congregation of shopping festivals, with their unique mix of limited offers and special deals, have been pivotal in attracting virtual footfall for many online retailers. In this region alone, we found that shopping days such as Singles’ Day, Black Friday, Cyber Monday and 12.12 accounted for the lion’s share of sales over the year-end period. Based on our data, revenue earned from one of these popular shopping days is roughly equivalent to three-quarters of a month’s revenue in 2017.
Our transactional data shows that mobile app alone accounted for three-quarters of orders made online*. Of the 5 countries covered in our database, Thailand displays the strongest preference towards making purchases via mobile app, followed by Indonesia and Philippines.
*ShopBack supports many mobile-app only merchants, including Grab and Shopee.
Volume of Orders: Mobile VS Desktop per country in Q2-2018
Consistent with what we see on the traffic front, mobile app purchases consistently exceeded that of desktop on a quarterly growth basis. The runaway growth in mobile is especially pronounced in Thailand for recent quarters.
Growth in Mobile Transactions: Per country over 4 quarters
Growth in Desktop Transactions: Per country over 4 quarters
With all these findings pointing to a mobile-first strategy to drive ecommerce growth in Southeast Asia, one may wonder if mobile is making desktop irrelevant in the ecommerce space. Grounded on evidence from our user interactions, we argue that desktop is and will remain an important channel for ecommerce merchants, especially those who are keen to drive higher-value purchases.
In fact, in terms of average basket size (average dollar value spent per order), we found that desktop purchases tend to be higher than that of mobile purchases. This finding is consistent across all countries, particularly in Philippines, Malaysia and Indonesia.
Overall Average Basket Size: Mobile VS Desktop per country over 4 quarters
First, we found that users generally perceived desktops to be safer and hence prefer to use their desktops when making large purchases. Over 60% of our users remarked that they practise omni-channel shopping— beginning their browsing journey on mobile and finally transacting on desktop— as they “feel safer” and prefer to pay on desktop. This is probably a manifestation of the prevalent perception gap in terms of cyber security amongst users.
One desktop screen is equivalent to at least 3 mobile screens
On this front, our further investigations also revealed an underlying advantage of desktop as an online platform. Namely, desktop’s larger screen size allows for more information and content to be displayed in a multitude of ways. This appeared to be another key reason that has helped shift customers’ preference towards making higher value purchases on desktop.
Assuming the same information content per square inch, a typical desktop can provide at least 3 times more information compared to a smartphone. It allows for a better user experience when deciding on more complex purchasing decisions such as general and personal insurance or travel bookings. We found that users tend to require more information for in-depth research and product comparison when making such purchases.
Conversion Efficiency for Travel Bookings: Mobile VS Desktop per country over 4 quarters from Q3-2017 to Q2-2018
The above graph showcases the conversion efficiency (orders delivered per unit traffic) of desktop and mobile app in Southeast Asia’s travel category. Desktop triumphed over mobile app at over 50% across the board in all countries. Even as the smartphone screens keep getting bigger over the years, they will never replace a desktop screen. That is the main value proposition of desktop which cannot be defeated by mobile.
Our studies also showed that desktop comes with a different application ecosystem that cements its advantage in content delivery. For instance, some users favour usage of browser extensions to enhance their shopping experiences on desktop. For the uninitiated, extensions are small software programs that customise the browsing experience and enable users to augment their browser’s functionalities to fit individual needs or preferences.
Though widespread in the US and UK, the usage of browser extensions are relatively nascent in Southeast Asia. 9 out of 10 of our users are not aware of what browser extensions are. Of those who use browser extensions, they appreciate how it makes their browsing journey a more pleasant one. Desktop can potentially utilise such tools to improve on user experience and stay relevant to them.
ShopBack's own browser extension is a case in point. The extension is designed to assist users throughout their online shopping journey on desktop.
More details can be found here: https://www.shopback.sg/cashback-buddy
Revisiting the key question that we set out to address: Is desktop dying in the age of mobile dominance in Southeast Asia’s ecommerce space? The short answer is no. Our analysis showed that while mobile continues to overtake desktop on the back of marketing and platform innovations, and consistently attract higher rates of user engagement, desktop remains an effective channel for ecommerce. Desktop remained well-positioned to capture the higher value transactions across categories.
ShopBack enhances shopping by providing up to 30% Cashback for 7M consumers to boost their purchasing power while providing cost-effective marketing for 1,500 merchant partners in seven countries.
This data release is based on the analysis of the anonymised data from Q3-2017 to Q2-2018 (July 2017 to June 2018) for 5 key economies in Southeast Asia — Singapore, Malaysia, the Philippines, Indonesia and Thailand.
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