Southeast Asia’s reputation as a shopping paradise has been established in part by the malls in the region that many know by name — from Mid Valley Megamall in Kuala Lumpur, Siam Center in Thailand and Marina Square in Singapore to the various SM Supermalls in the Philippines.
In fact, they were my first few destinations when I moved to the region toward the end of last year from Hangzhou, China. Up until then, I spent a good part of the last decade at Alibaba Group building up the biggest online platform for fashion, at a virtual mall you might have heard of but not visited: Tmall.
When I arrived in Singapore, I visited the malls to shop for new household items and feast at the legendary food courts here. With the year-round tropical heat in most parts of the region, especially in the cities, it is not surprising to see why malls offering cool, air-conditioned environments are popular haunts. In many ways, the rise of malls tracks the growing affluence of a nation and as Southeast Asia’s middle class grew, so did the malls in size, stature and vibrancy.
With malls, consumers come face-to-face with brands and retailers, and provide opportunities for brands to develop a direct relationship with their customers, who have come to expect a premium shopping experience, as well as peace-of-mind about product authenticity when they step inside a branded store.
The Shift Online
But in the last decade, Southeast Asia has seen a digitalization of its economies, and with it, the arrival and acceleration of e-commerce activities in the region that reshaped the retail landscape. Unlike in the West, where e-commerce platforms have competed aggressively with off-line merchants, retailers and malls, those in Southeast Asia are instead partnering with brands, retailers and malls to provide them with opportunities and resources, including technological capabilities, solutions and logistics support to go online, giving rise to virtual malls of a very unique nature.
Just last month, Singapore’s Marina Square onboarded 30 of its tenants onto LazMall, our premium b-t-c virtual mall and the largest online mall of its kind in the region. In Thailand, Bangkok’s landmark shopping mall Siam Center helped 40 of its tenants set up virtual stores on LazMall in May. More are taking on this journey. This trend is not only inevitable, it is necessary for the survival and future of brands and businesses. A physical store has limitations and this has become increasingly obvious in the current pandemic, which has seen consumers stay indoors.
Those with the foresight to move online have been able to remain operational, as online platforms help businesses to scale and expand easily, to reach customers across an entire country or even beyond national borders. In most Southeast Asian nations (except for Singapore and Malaysia), more than half of the population lives in rural areas and may not be able to frequent malls. But even if they do, there is also a limit to how many stores they can visit within the mall before they are worn out from all the walking.
Even the largest malls in Southeast Asia can only house up to 1,000 stores. Online, consumers can simply browse an entire platform at their fingertips and know immediately if there is stock, rather than searching each physical store one by one. And if they didn’t know this before, they slowly discovered it in the last few month. For consumers, e-commerce offers access to the broadest range of brands and assortment to anyone, anywhere. Another advantage of a virtual mall for brands and businesses is the convenient management of a product’s life cycle, meaning that off-season stocks or any oversupply will have an online channel to complement off-line sales.
In March, the cancelation of IT Show, a popular tech consumer fair, drew resignation from popular brands who were stuck with inventory that they had no traditional way to sell to consumers, until Lazada re-created the sale online, and helped brands move products in preparation for the upcoming stay-at-home measures across the country. This helped benefit consumers too, because they can now get great deals for these items as brands adjust their inventories, instead of holding the items past their product life cycle. More importantly — and this goes back to the relationship that brands have built with their customers over time — virtual shopping platforms offer businesses the opportunity to stay connected with their customers and to engage them in more innovative ways. If the last decade was about getting people to shop online, the next one will be about ensuring they stay online.
A report by Facebook and Bain & Co. cited the lack of brand loyalty amongst Southeast Asian consumers, which makes it more critical for brands and businesses to increase engagement and improve stickiness. In the same way that physical malls have become branded destinations promising an entertaining and premium shopping experience for consumers, online platforms have also evolved — especially in Southeast Asia — into more than just a place to shop.
Shopping the Virtual Mall
Shopper-tainment has played a major role in recreating some of the tactile experience of shopping.
For example, livestreaming technology that enables sellers, brand promoters and social influencers to introduce products and educate viewers about how to use them are like that salesperson recommending to you which foundation looks most natural on you at a cosmetic counter in a department store. Shows that are livestreamed during shopping festivals or mega campaigns are like the concerts or shows you see held at malls. Sometimes there are also livestreamed game shows or educational sessions on how to keep fit, eat well and stay healthy, especially during lockdown periods during the pandemic.
The next step in getting people to stay online is building trust. People want to know they are getting what they ordered. With technology and more rigorous systems in place by e-commerce platforms, it is also possible to have the same assurance of product authenticity shopping for, say, Coach bags online as it would be shopping inside a Coach store in a mall. When we launched LazMall in September 2018, it was to provide this assurance, along with a virtual mall experience that was similar to a physical one and offering the best of both worlds to our customers.
Mindful that consumers are conscious about authenticity, the platform has always been rigorous and stringent with the type of seller or brand we allow onboard, much as a mall owner or developer would be in contracting tenants.
A Staying Trend
By the end of this year, Southeast Asia will have 310 million digital consumers, a number previously forecast for 2025, according to Bain & Co. Virtual malls and online shopping will be here to stay, becoming as integral to the lives of Southeast Asians as physical malls are — adding more options for brands to build loyalty and for consumers to enjoy a fuller, more abundant, more satisfying shopping experience.