E-commerce brands in the Philippines and Southeast Asia are growing their Direct-to-Consumer (D2C) presence by opening their own web stores. As these businesses build on their existing marketplace to take control of customer journeys, the number of web stores in the country is expected to increase by 56 percent this year.
This is just one of the key business trends reported by Locad, the leading Asian logistics platform that enables businesses to build, expand, and sustain their e-commerce operations.
This identified trend is supported by data from e-commerce data platform Storeleads:the Southeast Asian market has witnessed a monumental surge in the volume of web stores in Woocommerce and Shopify amounting to a 50 percent and 61 percent growth respectively from 2019 to 2021.
Locad CEO and co-founder Constantin Robertz elaborates why this trend is set to take full swing this year and the benefits of going D2C for e-commerce brands.
“E-commerce has pushed the playing field wide open for the ‘rise of the many,’ with new brands popping up, offering strong product value in all categories, challenging incumbents,” he says. “For brands that get it right, a direct-to-consumer approach is a transformational opportunity offering higher margins, more customer insights, and a better control over the brand experience.”
Search volumes on merchant-and-seller related queries are continuously rising to up to 18 times versus 2017. This apparent rise on topics involving online selling, according to Locad’s report, can also be attributed to the boost in D2C brands joining the e-commerce bandwagon.
Traditional brands dive into the D2C market as owners are beginning to see their web store as a vital sales channel to boost their growth, on top of their marketplace stores. Locad notes that the D2C strategy can sharpen a brand’s competitive edge given the surge of new sellers into the digital space.
In detail, recorded web stores in Shopify in 2019 were only 3,341, but the platform saw a notable increase from 2020 and 2021 in web store tally with 7,792 to 8,562 respectively.
The number of Woocommerce web stores followed the same trend as it more than doubled in the last three years with a record of 6,287 in 2019, rising to 9,554 in 2020, and then ending in 12,731 in 2021
More and more established and traditional retailers are expected to slowly grow their D2C channels to gain leverage over their competitors. Even though foot traffic is expected to slowly increase with the easing of the COVID-19 restrictions, Locad envisions that many retailers would still pursue the digital D2C path to build their brand and increasingly draw in online shopping patrons.
Locad adds that the pandemic has allowed people to grow accustomed to mainly buying online. D2C brands satisfied their customers and retained their loyalty because the delivered product aligned with the perceptions created.
On another end, the pandemic also tested most brands’ growth capacity with reduced consumer expansion due to loss of jobs or income. To counter this, companies ventured outside of their local markets and went global with e-commerce platforms like Locad making this endeavor a better experience.
Another solution that brands took was expanding their reach to adjacent categories. Product diversification has allowed more D2C brands to sustain their business, despite a potential industry downturn or aggressive competitors.
With social media entering the e-commerce space, video content that drives online traffic will play a crucial role in consumer spending. It has dominated social media platforms such as Facebook, YouTube, Instagram, and most recently, Tiktok. According to networking giant Cisco, videos composed 81 percent of online traffic in 2021.
