There
is no stemming the digital tide. 2016 saw digital advertising revenues overtake
TV ad spends, with revenues for the former surpassing the latter.
Ride
this bus or get thrown under: the cultural and commercial imperative to go
‘live’ and be connected has engulfed commerce. And businesses both big and
small, whether e-tailers or brick and mortar, have done well to heed this.
As
digitization continues its, albeit belated, onward march in Pakistan, it is
worth considering how big brands are
leveraging e-commerce, and its concomitant channels of digital marketing,
to bolster brand presence and generate revenue.
On
the marketplace front, Daraz has emerged a key portal, housing brands both
humble and huge, offering them a medium to optimize e-commerce prospects and
drive conversions.
Unilever and Daraz on their mutual
embrace of ecommerce
Unilever
launched Pakistan’s first FMCG ecommerce solution with Daraz back in
2014. Then, ecommerce was merely in
gestation phase. Four years later, Pakistani ecommerce has come of age and
stands on firm ground. Yes, it is still young, much like the predominating
demographic it serves in Pakistan.
With
30 million active internet users in Pakistan, brands are redoubling their
attention to ecommerce.
Daraz
Account Manager, Maheen Yousuf, who has
worked closely with brands in the FMCG space, insists that “major players like Unilever recognize that
e-commerce is a future-proof investment.”
Assistant
Manager Ecommerce at Unilever Nauman Lakhani speaks about the brand’s
leveraging of ecommerce on Daraz. “If
businesses do not begin to create an online presence for themselves today then
they run the risk of being left behind in a highly competitive digitizing
landscape. As consumers place higher value on convenience and accessibility
against the backdrop of busier and accelerated lifestyles, they’re turning to
online shopping.
That’s
where Daraz and a host of leading, heavyweight FMCG players enter.
Which categories have the most
potential for digital success?
Nielsen’s research (The Future of Grocery E-Commerce, Digital Technology and Changing
Shopping Preferences Around The World, April 2015) about digital shopping
identified two barriers and two enablers that help identify categories that are
well-positioned for e-commerce success.
Stock-up
categories like personal care and household products are prime inventory, while
immediate use items like fresh and frozen foods, condiments and beverages will
be slower in adoption.
Data
from Daraz bears this out, with Unilever’s highest-sellers for 2017 being Surf Excel washing
powder 1Kg, and FREE Lux Peach & Cream 150 gm with Peach
and Cream trio pack.
Online
grocery sales have been boosted by continued progress in mobile adoption and
broadband penetration, particularly in developing regions like Pakistan.
Zooming out and speaking of the broader region,
Asia-Pacific consistently ranks above the global average for adoption of
online retailing options. Ordering online for home delivery is the most
commonly preferred retailing option in the region.
Why is online shopping for FMCGs so
prevalent in Asia-Pacific compared with the rest of the world?
A
few factors come into play. First, Pakistan and its neighbours to the north,
east and beyond comprise a rapidly urbanizing region, with a high population
density making the home delivery model economically scaleable. Paired with low
labor costs, one has the necessary ingredients for an ecommerce boom in place.
Additionally, growing smartphone ownership and usage have created significant
mobile commerce opportunities.
Willingness
to use digital retailing options in the future is highest in the developing
markets in the Asia-Pacific (60% on average), Latin America (60%) and
Africa/Middle East regions (59%), and trails in Europe (45%) and North America
(52%).
In
the consumer packaged goods industry, change has been more evolutionary than
revolutionary, but digital is redefining what it means to “go” shopping. And
Daraz is on the frontlines of this evolution. Shoppers are growing accustomed
to the benefits of digital in other retail categories and now expect them in
the realm of grocery as well. Savvy brands and retailers like Unilever and
Daraz, respectively, are winning by leveraging technology to enhance the
shopping experience and satisfy consumers’ evolving desires.
What is the relationship between
offline and online shaping up to be like?
This
is an aspect of e-commerce that is often glossed over and misunderstood. In
Nouman’s words, “Some businesses worry
that they could lose the importance of their physical channels, but in reality
having an online presence adds to revenue instead of cannibalizing already
existing business channels.”
Indeed,
the Nielsen study corroborates this claim, claiming that a ‘bricks versus
clicks’ approach is not a relevant paradigm anymore. Bricks-and-clicks is the
current and future retail reality.
And
with an established e-commerce platform like Daraz available to the likes of
major multinationals like Unilever, the clicks- and additions to cart many of
those clicks invariably bring- are here to stay.
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