Could Southeast Asia be Your Next Overseas Ecommerce Market

Could Southeast Asia be Your Next Overseas Ecommerce Market?

With new internet users coming online all the time, and a young population with lofty consumer ambitions that local retailers can’t satisfy, Southeast Asia holds plenty of promise for online retailers.

Southeast Asia consists of five dominant countries including Thailand, Malaysia, Indonesia, Vietnam and the Philippines, each boasting a large population and a vibrant economy. It’s also made up of some much smaller but very wealthy territories such as Singapore and Brunei. Much of this region already has an established ecommerce sector, but it’s the scale of its growth that’s creating so much interest from domestic ecommerce retailers.

The opportunity

Every month, nearly four million people go online for the first time in Southeast Asia, adding to the 350 million existing internet users. There’s also an increasingly urban population with incomes that are steadily rising, meaning many consumers have money to spend but are unable to find domestic retailers that can meet their needs. That makes cross-border ecommerce an increasingly common solution.

The majority of people in Southeast Asia access the internet from their smartphones rather than computers. Therefore, a mobile-first strategy essential for any online retailer intent on cracking this potentially lucrative market. Social media is also a significant influence, with many businesses using social ecommerce as a sales channel they can access relatively easily and cheaply.

The challenge

Although the Southeast Asian ecommerce market looks extremely promising for UK retailers that are looking to expand overseas, there are also plenty of challenges they’d have to overcome to make the move a success.

Some of the countries that make up the region have low levels of participation in the formal banking system, making online transactions difficult. In some parts of the region, people also lack the formal ID necessary to become part of the banking system. In other areas around the world that are underbanked, fintech has provided mobile-friendly solutions such as bank transfer apps and digital wallets, but these are still underused solutions in Southeast Asia.

The logistics could also prove to be a challenge for smaller firms. As yet, there is no reliable, low-cost logistical infrastructure in place across the region, so companies have to rely on a patchwork of local providers. For that reason, you’d have to seriously consider how you’d deliver your products to consumers before giving your overseas expansion the green light.

The important role played by messaging apps

To successfully enter the Southeast Asian ecommerce market, domestic firms will also have to change the way they market their products. Rather than relying on online content and search engines, Southeast Asian consumers predominantly use ecommerce apps, which fuse social media, messaging apps and shopping, to browse online and buy.

An example is LINE, a Japanese messaging app that’s incredibly popular in Southeast Asia, which combines the messaging facilities you’d expect from WhatsApp with mobile payments, music streaming and shopping tools. This type of app gives Western retailers a unique opportunity to engage with Southeast Asian consumers in ways that would not be so successful in their domestic markets. This presents a content challenge for businesses entering the region, but also a huge opportunity for those that can get it right.

Ultimately, it’s the customer experience that will determine whether your ecommerce marketing efforts are a success. Gamified and user-generated content typically performs well in the Southeast Asian market and customers must be served in a language they’re comfortable with. As more and more online retailers flood into this extremely promising market, it’ll be those that understand and meet the demands of local consumers and cater to their specific needs that get ahead.

Moving into the Southeast Asia ecommerce market?

At Linguistica International, we provide a leading range of professional translation, transcreation and copywriting services so you can speak your customers’ language, wherever they are. Call 02392 987 765 or email today to discuss your requirements with our team.

The Impact of Culture on Buying Behaviour

The Impact of Culture on Buying Behaviour

Language is not the only factor you need to take into account when expanding your business into overseas markets. As we all know, culture has a huge influence on our thought processes, but recent research has shown that it also affects our buying behaviour.

Our culture shapes how we perceive the world around us, our place in it and how we make decisions. Add all that together and it’s sure to play a big role in how we consume goods and services. In some cases, that could manifest in an obvious way. For example, some cultures are prohibited from consuming certain products such as alcohol and meat, while cultural preferences may determine styles of clothing and the household products we buy.

However, in other cases, it’s much more subtle. Inherent cultural biases influence elements of shopping, such as trust, social interaction and time orientation (whether a culture tends to focus on the past, present or future), and this can alter our buying behaviour.

Which cultural elements influence buying behaviour?

Culture is something that consumers are rarely aware of, but it influences what feels right, normal and desirable to them. To be successful overseas, retailers must be aware when they are asking consumers to swim against their cultural tide and understand the changes they can make to bring their product or service back within their consumers’ comfort zones.

The following cultural elements may impact buying behaviour:

  • Masculinity vs. femininity – Masculine cultures are more competitive, and material rewards for success are expected. Feminine cultures have a preference for cooperation, modesty and quality of life.
  • The power distance index (PDI) – How does a society handle inequalities among people? People in societies with a large degree of power distance accept a hierarchical order, while those with low power distance strive to equalise the distribution of power.
  • Individualism vs. collectivism – Cultures that exhibit individualism are expected to take care of only themselves and their immediate families. Collectivism represents a preference for a tightly knit society where relatives or members of particular groups look after each other.
  • Uncertainty avoidance index (UAI) – This is the degree to which a society feels uncomfortable with uncertainty and ambiguity. Cultures with a strong UAI maintain rigid codes of belief and behaviour, while weak-UAI societies have a more relaxed attitude to new ideas.
  • Long-term vs. short-term orientation – Societies that score low prefer to maintain time-honoured traditions and norms, while those with higher scores welcome modern education to prepare for the future.
  • Indulgence vs. restraint – Indulgent societies allow the free gratification of basic human drives related to enjoyment and having fun. Restrained societies suppress the gratification of needs and regulate it with strict social norms.

You can read more about the six dimensions of national culture here.

How does culture impact buying behaviour?

Researchers have conducted some intriguing studies on how cultural elements impact the buying decisions of consumers. For example, a study by the University of Hong Kong found that the Asian cultural emphasis on saving face meant that even low-income consumers buy luxury brands.

Another study explored the tendency of consumers in Western and Asian markets to make impulse purchases. It found that ageing was a factor that was likely to reduce the propensity to make impulse purchases in Asian consumers, but it had no effect on Western consumers. Instead, it was cultural elements such as risk avoidance that were more likely to reduce impulse buying in Western markets.

What impact does culture have on your marketing campaigns?

It’s extremely difficult to adopt the mindset of a completely different culture, particularly if the goal of a brand manager is to persuade a new audience to change its buying behaviour. For that reason, really making the effort to understand the cultural frameworks that are at play is imperative before launching a product or service into a new market.

While academic research can play its part, it can be hugely challenging to translate academic research into actionable insights for your brand. Instead, working with a professional localisation and translation team can help. As natives of the overseas markets you’re trying to target, they will instinctively know the right and wrong ways to get your brand’s message across.

Localised marketing with a global impact

At Linguistica International, our native translation and transcreation experts will help you create marketing messages that appeal to the cultural sensitivities of customers in your target markets. Call 02392 987 765 or email to discuss your project with our team.