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Popular Australian Product Categories In Southeast Asia

Katrina B. & Benedict L

What Could Make Australian Products Popular In Southeast Asian eCommerce?

 

Southeast Asia is an attractive market for Australian businesses. As a group, the Association of Southeast Asian Nations (ASEAN) is one of Australia’s top three trading partners. It represents around 15 per cent of the country’s total trade, according to a report1 prepared by Australia’s government.

With the rise of eCommerce, Australian businesses today have a new channel for entering this market. Research firm Forrester Analytics predicts2 that the region’s online retail sector will grow to US$52.6 billion by 2023 from US$18.7 billion in 2018.

A report3 by Google and Temasek shows similar optimism—it predicts that Southeast Asia’s internet economy will exceed $240 billion by 2025. Much of the growth will come from Indonesia, the region’s largest economy.

Google and Temasek's 2018 Southeast Asia eCommerce Market Size growth estimates for Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam

Source: e-Conomy SEA 2018 report by Google and Temasek

Given Southeast Asia’s robust eCommerce sector, even small and medium Australian businesses have a chance to build a significant following in the region.

It can be difficult to know where to start, though. That’s why we’ve developed this series on popular Australian product categories in Southeast Asia.

While there isn’t comprehensive information on which Australian brands are performing well in Southeast Asian eCommerce markets, specifically, you can consider these five things when deciding to market your products to this region:

  1. Popular Australian retail brands in SEA
  2. SEA consumers’ impressions of the ‘Made in Australia’ brand
  3. A market for premium, authentic products
  4. Top Australian product categories in SEA eCommerce
  5. Challenges and strategies for Australian businesses

1. Popular Australian retail brands in SEA

On a list4 of global Australian brands that have gained popularity in the Philippines, the country’s embassy included apparel brands Cotton On and Rip Curl, as well as footwear label Hoster.

Nutrition and wellness brands Swisse, BioIsland, Blackmores, along with beauty product maker Eaoron, appear to be popular in some Southeast Asian countries as well. That’s based on the bestseller list of an Australian wholesale shop on Lazada Malaysia5. The same brands also feature prominently on Airfrov6, a Singaporean app that lets locals request products for travellers to bring home.

If you’re unfamiliar with the Southeast Asian market, it would be good to benchmark your products and eCommerce marketing strategies against these brands, and understand what makes them click in the region.

In the fashion segment of this series, we’ll discuss the features that make the aforementioned apparel and footwear brands popular in Southeast Asia, and what eCommerce businesses can learn from them. You can also read our deep-dive into the eCommerce opportunities for Australian health & beauty products in the region.

 

Australia’s products generally have a good reputation in Southeast Asian countries. Team up with a flexible, end-to-end eCommerce logistics partner like Janio for all your logistics needs into this up and coming region! Reach out to us for a quote today!

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2. SEA consumers’ impressions of the ‘made in Australia’ brand

Popular Australian Product Categories in SEA_Infographics - SEA Impressions of Aussie products

Southeast Asians, such as customers in the Philippines, generally have a good opinion of the ‘made in Australia’ label. They equate it with being clean, green and safe7, especially when it comes to cosmetics and toiletries products.

Southeast Asians also share Australians’ preference for basics along with fashionability8”, according to Cotton On, one of the more popular Aussie fashion brands in the region. This is partly owing to similarities in climate and topography. Both places, for example, enjoy the sunshine for a large part of the year. Both also feature plenty of seaside cities and towns, giving rise to laid-back coastal lifestyles.

Through photos, videos, and text, you can educate your customers on what your own Australian brand means. This is called ‘rich content’, which Austrade defines7 as “high-definition pictures from multiple angles, in-depth product descriptions, and user reviews”. As we discussed in our article on Thai eCommerce consumers, L’Oreal Thailand applied this strategy to increase sales by 30 per cent.

Possible topics for rich content you could use may be about nature and sustainability, as is the case with Olive Oil Skin Care Co (see next point). It may be the appeal of the surfing lifestyle, as with Rip Curl.

You could also focus on quality and market expertise—characteristics that have propelled healthcare brand Blackmores to success in the region. The company, which sells vitamins and dietary supplements, claims at least a 40 per cent share9 in Thailand. It’s also performing well in Malaysia, Singapore, and Indonesia.

3. A market for premium, authentic products

An Australian government report on ASEAN opportunities1 states: “ASEAN ‘urbanites’ of the future will be younger, with more discretionary spending power and a greater demand for premium products.”

Research by the Hong Kong Trade Development Council10 (HKTDC) supports this, noting that middle-class Southeast Asian consumers tend to be willing to pay more for products from brands they trust. This presents an opportunity for Australian eCommerce businesses to capitalize on the positive perceptions of the ‘made in Australia label’ by selling unique, authentic, and premium products.

This demand is fuelled by a growing middle class. In Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, 50 million people11 will join the middle class by 2022, according to Bain & Company and Facebook, which collaborated in a study12. These increasingly affluent consumers will contribute to Southeast Asia’s $300 billion middle-class disposable income.

The study also found that demand for high-end products is growing in Southeast Asia. You’ll be glad to know their research also revealed that brands across the region have found greater success in fulfilling this demand by selling products online, more than when selling in brick-and-mortar outlets.

That means Australian businesses don’t necessarily need physical outlets in the region to capture the market for premium products.

Niche businesses selling unique, authentic, and premium items can learn a lesson from Sydney-based Olive Oil Skin Care Co, an all-natural skincare brand. When it launched a shopfront on Alibaba’s Tmall Global13, it emphasized that its products were entirely made in Australia—from the olive grove where the main ingredient is sourced to the mixing and packaging. It leveraged the ‘made in Australia’ brand to highlight the sustainability and eco-friendliness of its methods. The high quality of the products also made it a hit.

With such characteristics, Olive Oil Skin Care Co also positioned itself as a premium skincare brand. That means targeting the affluent consumer class.

So don’t be afraid to sell your products at a premium if you can justify the price. This will mean targeting a narrower audience, not the mass market. You’ll need to emphasize the Australian journey that goes behind the making of your products, including the quality and source of the ingredients and the care that goes into the making of the items.

 

Looking for more eCommerce insights and shipping tips to get into Southeast Asia? Check out our guides below for more!

4. Top Australian product categories in SEA eCommerce

There are three Australian product categories that perform best among Southeast Asian eCommerce consumers:

  • Fashion
  • Health & beauty
  • Mom & baby

Social media drives online sales of fashion products in Southeast Asia, according to YStats14. This doesn’t come as a big surprise when you consider that the region’s social media penetration is at 55 per cent, compared to the global average of 42 per cent, according to HootSuite15. The rate varies by country—it’s as high as 75 per cent in Malaysia and 83 per cent in Singapore.

Consumers in the region also frequently turn to social media to hunt for promos and deals. They follow influencers, and even micro-influencers, for fashion inspiration.

Meanwhile, Thailand was the world’s largest social commerce market in 2017, according to an eCommerceIQ report cited by Austrade7. In Malaysia, one in three16 online shoppers uses social media. Almost a third (30 per cent17) of eCommerce sales in Indonesia are made through social media, blog shops, and messaging apps.

With their focus on visuals and trending posts, social media sites like Instagram and Facebook are great platforms for posting product images and information.

They also come with private messaging features that allow buyers and sellers to converse and negotiate directly with each other.

Such features are important because conversational commerce plays a key role in eCommerce conversion in Southeast Asia. This is especially true in Thailand, which is said18 to be the top country in Asia Pacific where people send the most messages to businesses on Facebook Messenger.

Look beyond Facebook Messenger when choosing conversational commerce options, though. Hootsuite’s report shows that Line dominates in Thailand, while WhatsApp is preferred by Indonesians.

Meanwhile, if you’re selling health & beauty products, take a look at each SEA country’s population age instead of doing a collective sweep of the region. For instance, Thailand’s population is ageing19, with a median age of 37.7 years. Compare this with Singapore’s 34.6 years, Malaysia’s 28.5 years, Indonesia’s 30.2 years, Vietnam’s 30.5 years, and the Philippines’ 23.5 years.

You can thus tap into a demand for anti-ageing products in Thailand and Singapore.

With four million births20 in the region per year, there’s also a growing ‘mom’ demographic among Southeast Asian online shoppers. Sales of products for babies and children are expected to reach US$280 million in Indonesia and US$141 million in Thailand by 2020, according to a Euromonitor report cited by eCommerceIQ21.

Keep in mind that many moms in Southeast Asia obtain information and recommendations from websites and chat groups dedicated to parenting22. It’s thus important to build credibility around your brand or your online store through various online channels. By doing so, you can gain consumers’ trust, even though you’re not a major player in the market.

HKTDC also notes a growing demand for natural and hypoallergenic baby products. This is another opportunity for you to leverage the ‘made in Australia’ brand of natural and safe ingredients.

 

5. Challenges and strategies for Australian businesses

As a new entrant into the Southeast Asian market, you can adopt a few strategies to help your online shop succeed.

  • Leverage the ‘made in Australia’ brand. You can educate your audience on the uniquely Australian characteristics of your product. This may be the lifestyle it represents or the process of creating it.
  • Identify marketplaces with country-specific sections. Lazada Indonesia, for example, is launching an ‘Australia Pavilion’ page.
  • Understand that customs regulations differ per country. There’s no eCommerce regulation standard yet, although the ASEAN is working on it. So your best bet is to work with a logistics partner who knows the ins and outs of eCommerce shipping and customs clearance to different SEA countries.
  • Adopt popular Australian brands’ best practices. This includes creating ‘rich’ content that accurately describes and shows your product.
  • Use social media and messaging platforms for selling. In Southeast Asia, these apps aren’t just for communicating with friends. They’re widely used by businesses and consumers to talk to each other.
  • Narrow your niche. Consider, for example, targeting affluent consumers concerned about natural ingredients, or mothers looking for hypoallergenic products.

 

Continue to do due diligence and reach out to your local trade bureaus for help with expanding into Southeast Asia. With enough preparation and the right international shipping and eCommerce logistics partners, you can prepare your online shop for a successful launch in the Southeast Asian market.

 

Looking for tips on getting your products through customs clearance in most Southeast Asian countries? Look no further than our downloadable B2C customs clearance guide!

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Looking to ship throughout Southeast Asia? Contact us to find out how.

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Want to find out more about Australian products’ potential in Southeast Asia?

Find out in our article series below:

References:

  1. Austrade: Insights for Australian Business
  2. Forrester: Online Retail In Southeast Asia Is Expected To Reach $53 Billion By 2023
  3. e-Conomy SEA 2018: Southeast Asia’s internet economy hits an inflection point
  4. Australian Embassy: Australian companies and brands contribute to dynamic Philippine trade and economy
  5. Lazada: Australia Kaylie Wholesale 
  6. Airfrov
  7. Austrade: Cosmetics and toiletries to the Philippines
  8. Cotton On Group
  9. Austrade: E-Commerce in Thailand
  10. Austrade: Blackmores Case Studies
  11. Hong Kong Means Business: Accessing the ASEAN Consumer Market: Baby and Maternity Products (Recent Developments and Trends)
  12. Bain: Understanding Southeast Asia’s Emerging Middle Class
  13. Facebook: How Southeast Asia’s emerging middle class is embracing the digital world
  14. Small Business Secrets: Olive Oil Skincare oils up the Asian market
  15. Ystats: Rapid Growth for the Fashion E-Commerce Market in Southeast Asia
  16. HootSuite/We Are Social: Digital in Southeast Asia 2018
  17. eCommerceIQ: BeautyIQ: How Social Commerce Works in Southeast Asia 
  18. Bain: Can Southeast Asia Live Up to Its E-commerce Potential?
  19. Kasikornbank
  20. World Population Review: Median Age
  21. Asia One: CBME South East Asia Launches 1st Baby Products Industry Summit as Baby Market Grows in Sophistication
  22. eCommerceIQ: Winning Over Moms: The most sought after demographic online
  23. DKSH: Five winning e-commerce plays for baby care brands in South East Asia
2389 意見

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