According to HSBC (Hong Kong and Shanghai Banking Corporation) Malaysia, digital change is rapidly forcing Asian businesses such as retailers to re-think their strategies.
Mahbub Ur Rahman, head of Commercial Banking, HSCB Malaysia, said that Asian companies that have set the global pace in ecommerce retailing must adopt fresh wave of digital change if they are to hold on to cost-conscious customers who are more mobile than ever-before.
“The digital trend isn’t just about establishing brand presence and pushing products online,” said Mahbub. “A successful digital strategy must involve daily social media engagement that delivers interesting and relevant content to customers and will need buy-in from senior management, dedicated staff, creativity, and the investment of time and resources.”
He said that consumers at all income-levels were increasingly willing to purchase a “wide range of products exclusively online and with mobile shopping’s rapid growth, the challenge for retailers is how to enhance customer experience for a brand’s most loyal followers and bring new buyers into the fold while minimising the risks associated with an ever-more international supply chain.”
“It’s a shift that could even force retailers which have so far eschewed e-commerce to re-think their strategies,” said Mahbub.
He added that there were still a few brands at the very high-end that have not yet catered to an “online audience at all out of fear of brand dilution. Others share their brand story through an online presence, but do not encourage or even enable consumers to make a purchase online. While this strategy may still be working for a select group, it is less likely to be viable in future.”
Big Data spending
“In a report by International Data Corporation (IDC), Big Data analytics spending in Malaysia in 2018 is expected to reach US$80 million,” said Mahbub.
“In terms of growth rates from 2013 to 2018, Big Data spending is growing at a much faster rate than the overall IT spending growth rate in Malaysia,” he said. “What this demonstrates is that the Big Data journey is gaining momentum and is expected to accelerate and contribute more to the overall Malaysia IT spending in the coming years.”
“IDC also predicted that with the numerous 3rd Platform Technologies available such as cloud, big data/analytics, social and mobile, it will be even more important for organisations to take advantage of the opportunities that will come from transitioning to these 3rd Platform of Technologies in order to stay competitive,” said Mahbub.
He said working with a local creative and digital partner in each market can be the difference between a successful entrance into a new market and one that falls flat or, even worse, creates a negative perception of the brand.
The key will be in the capture of data needed to better understand customers, products and user experiences over digital platforms, he added.
Mahbub said smaller firms will typically benefit from using digital dashboards to get a snapshot of their entire online business presence, while larger companies should consider Big Data analytics to streamline information flow and generate insight on customer behaviour and buying trends. “Digital tools used properly can improve customer service and enhance brand loyalty.”
On the other hand, while what works well for one company might not work for another, there are a few best practice rules that the digital domain demands be put in place, regardless of a retailer’s size, he said n
“Payment preferences and cash management suddenly become much more important to understand and to analyse, given the increased potential for cross-border shopping adding a new layer of complexity to already internationally-oriented supply chains,” said Mahbub.
“Retailers need to know in real-time the costs and risks associated with every component of these operations, particularly the smaller and regional brand owners which may need to set up cross-border capable supply chain infrastructure for the first time,” he said.
Mahbub said supply chain settlement was “typically done in a variety of global currencies, but the right financial partner can tailor systems for retailers to track their money in real-time and its value in a single currency, regardless of what currency they have been paid in.”
Companies with a presence in multiple countries will benefit from efficient foreign exchange solutions with cross-border capabilities as managing capital and liquidity more effectively is vital, no matter how big or small the company, he said.
“The market dynamics have undoubtedly changed, but the basic principles of retail remain the same,” said Mahbub. “Brands must identify potential customers, engage them and ultimately complete a sale. The retailers best equipped to succeed will need to use technology to better understand their product sales cycles and how to maximise margins made thinner by rampant e-commerce competition. Only then will they retain the customers they have and reach the customers they really want.”
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