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TOP 8 Industry Trends that we think matter

Asia is dominated by horizontal eCommerce players and it is crucial for market players to find their niche. Marketplaces are transforming in 2018 by moving towards offline distribution and focus more on own labels. Artificial intelligence, machine learning, new technology possibilities in image / voice search and mobile payments will affect the industry and open new opportunities in eCommerce.

1. Hyper-Local & Hyper-Vertical Marketplaces
2. AI & Machine Learning
3. B2B Marketplaces Will Boom
4. Amazon Australia on the Rise
5. eCommerce Goes Offline
6. Own Labels From Marketplaces
7. Mobile Checkout vs. Desktop Checkout
8. Image & Voice Search Will Change SEO/SEA

The following TOP 8 Industry Trends can help guide your business strategy in 2018.

1. Hyper-Local & Hyper-Vertical Marketplaces

Until 2008, marketplaces grew very fast on a global scale offering products from category A to Z. These broad marketplaces are classified as horizontal ones. Certainly, the landscape has changed  as more players took a more industry-specific approach offering a niche product / service. These players are called vertical marketplaces. The future of vertical marketplaces will continue transforming towards more hyper-vertical and hyper-local marketplaces. The customer target groups will be narrower and more specified. GoJek for instance, is the Indonesian version of Uber and is beating the big player in the 260 million population market.

2. AI & Machine Learning

The level of trust surrounding marketplaces has significantly improved by artificial intelligence and machine learning. More players are using it to improve their customer service. Carousell, for instance, wants to integrate machine learning into every aspect of their business – especially in user experience and security. Likewise, marketplaces will strongly invest in their AI and machine learning technology and start testing the new functionalities.

3. B2B Marketplaces Will Boom

According to Forbes, the market worth of B2B eCommerce will be $6.7 trillion by 2020 with China as the front runner. Alibaba already has a larger trade volume than Amazon and eBay combined and will focus now even more on B2B markets. Furthermore, Forbes also predicts B2B marketplaces will be worth more than the more common B2C overall market value in the next decade. B2C marketplaces are far less complex than B2B marketplaces as prices are fixed, quantities are low and shipment is easier. In 2018, businesses will trade more online with each other and will look for more industry related B2B marketplaces to find their best business partner.

4. Marketplaces on the Rise in Australia 

Amazon is the number one entry point in the U.S for product search. It is also, the most common marketplace globally. Amazon Australia had an interesting impact in Australia’s retail market.   Australia was ranked #9 in traffic to but is #5 per capita which puts pressure on Amazon to gain significant market share in Australia.  As a result, Amazon has focused on expanding their presence in all categories.  Moving in a significant direction, Amazon renewed its Whole Foods trademark in Australia, causing concern for Coles and Woolworths.

5. eCommerce Goes Offline

It feels paradoxical that on the one hand, traditional offline retailers are pushing to move their business online and yet pure online players are starting to launch physical stores parallel to their eCommerce business. Max Bittner, Lazada Group CEO, hinted at the possibility for offline stores in Indonesia. Love Bonito, a pure eCommerce player already has an offline store in Singapore., one of China’s biggest eCommerce players, launched 7Fresh in China intending to play a significant role in the grocery market. JD has been offering fresh food online since 2012 given the fact that in China premium grocery was offered mainly online. With this move, JD wants to change the offline buyer experience with the newest technology. One example of this is with magic mirrors which sense customers picking up products and automatically giving relevant information.

6. Marketplaces and Their Own Labels

Southeast Asia’s eCommerce market is slowly maturing, and consequently players are exploring new and different revenue sources.  Lazada, for instance, offers display ads and programmatic product ads to its customers. It is generally expected that in 2018 Lazada will launch pay-per-click search ads following Shopee’s launch of PPC search ads.  Similarly, we are seeing more marketplaces and eCommerce platforms follow Amazon’s expansion into private label brands. This move is strategically useful for market players looking to increase their margins.  Especially, as they know exactly which products sell best in which region, given the fact that marketplaces have sufficient collected data from 3rd party brands.

7. Mobile Checkout vs. Desktop Checkout

Mobile checkout was once the biggest challenge for mobile eCommerce players and will become the greatest asset in 2018. Technology has simplified the way of payment on mobile significantly. Using the fingerprint and facial recognition from Apple and similar technology functions from Google and Samsung, mobile checkout will become the preferred method of payment.

China’s “Singles’ Day” in 2017 hit over $25 billion sales and 90% of that revenue was made through mobile purchases. Alibaba’s payment platform “AliPay” was the preferred mobile payment form.

We think it is noteworthy that PayPal is already partnering with Samsung Pay, Apple Pay, VISA, Mastercard, Facebook and Android Pay to help consumers in their mobile checkout experience. This positions them as the preferable payment method on mobile devices.

8. Image and Voice Search Will Change SEO/SEA

Amazon’s Alexa, Google Home, Microsoft’s Cortana etc. Voice search is an exciting new landscape for  eCommerce.  As the technology becomes more accepted it will be interesting to see how eCommerce businesses in Asia will make use of it.  Especially, as the answer for a voice question can be just ONE result which means that 2nd place will be the new last.

For eCommerce, the biggest implications will revolve around in-depth product information being optimised with voice search and making inventory available in real-time. A good example is the US Walmart which made it easy to order thousands of items by voice search through Google Home.  As a result more businesses will surely follow. Voice search is challenging territory for businesses in Asia and certainly, this new way of reaching searchers will play a big role in Asia this year.

Finally, the only way to search for products is through typing in a search bar (marketplace / search engine). This will change significantly through 2020 where experts predict that image and voice search will make up 50% of all searches.

Technology providers from giants like Microsoft down to small start-ups are working on image search integration and eCommerce businesses can be richly rewarded if they start to invest in this new technology. Consumers will be able to just take a picture or screenshot an object and then search for that exact product or an alternative. Not only will this allow businesses to reach new levels of ROI.  It will also allow them to enter new markets easier as language will become less of a barrier – a valuable function in Southeast Asia.

Pinterest is a great example for visual search technology. The company has invested heavily in this technology in order to turn the mobile device into a search engine for products.


Anna Trybocka