Tag Archives: Consumer
There is a little-watched and relatively obscure set of indicators produced by Thomson Reuters and Ipsos, called the primary consumer sentiment indexes. These provide a standardized approach to measuring consumer sentiment across a number of countries, and provide timely insight into consumer trends globally.
With the release of the May data this week I thought it would be good to take a quick look at the key trends in global consumer confidence (I have aggregated these indexes using GDP weights to provide a global as well as EM vs. DM view). Basically, global consumer sentiment has held up surprisingly well, which is a positive sign.
The key takeaways on the global consumer sentiment picture are:
-The global aggregate index of consumer sentiment strengthened in May.
-Global consumer sentiment held up well through the global equity market correction and actually strengthened vs. weakening seen in the manufacturing PMI.
-EM consumer confidence has been outperforming DM.
-Overall it supports a bullish global growth outlook.
1. Global Consumer Confidence vs. PMI and Global Equities: The May round of the Thomson Reuters/Ipsos consumer sentiment indexes (which I have aggregated based on IMF calculated PPP adjusted GDP weights), shows that globally the consumer is still doing well and if anything is going from strength to strength.
Interestingly, the global consumer confidence index held up well and actually strengthened through the global equity market correction and bucked the trend seen in the manufacturing PMI. So to my mind it is a nod to the underlying strength in the global economy.
2. Consumer Sentiment – EM vs. DM: Looking at the split between emerging vs. developed economies, the same picture of an apparent structurally different level (EM generally stronger) continued, but in terms of the signal, EM has continued its strengthening trend and in the month of May outperformed DM.
This one is also key as there has been some doubt around emerging markets as EM equities have seen substantial volatility and a reversal of previously hot fund flows.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
SINGAPORE/BANGKOK (Reuters) – When diaper maker DSG International (Thailand) wants to know what its customers are thinking, it often turns to Lazada, an e-commerce firm majority-owned by Alibaba Group Holding (BABA.N).
“From (their) data, we know mothers sometimes browse at night, so we can offer flash sales when we know customers are browsing,” says Ambrose Chan, the Thai company’s CEO.
Southeast Asia is the world’s fastest-growing internet market, home to 600 million consumers from Vietnam to Indonesia via Singapore, many of them tech- and social media-savvy. They are rapidly spending more time and money online. A Nielsen study in 2015 estimated Southeast Asia’s middle-class will hit 400 million by 2020, doubling from 2012.
Gross merchandise value of ecommerce in Southeast Asia will balloon to $ 65.5 billion by 2021, from $ 14.3 billion last year, predicts consultancy Frost & Sullivan.
Research firm Euromonitor forecasts internet retailing in Indonesia, for example, will more than double to $ 6.2 billion by 2021, and Thailand will increase 85 percent to $ 2.8 billion.
(For a graphic on Southeast Asia internet sales click reut.rs/2l3qULe)
Consumer goods firms, such as Unilever (UNc.AS) and Japanese cosmetics firm Shiseido (4911.T), say the e-commerce boom allows them to push deeper into markets that can otherwise be difficult to understand and tough to penetrate due to poor retail networks and infrastructure.
“Data from Lazada has been used to position certain products where consumer preferences are different. For example, Thai customers like to buy diapers in special cartons, while Malaysians prefer multiple packs,” says Chan.
To reach more customers and get a better handle on their online behavior, consumer goods companies are forging partnerships with e-commerce firms like Lazada and fashion website Zalora.
A customer who clicked on a 50 milliliter product may instead buy a smaller 30 ml product, said Pranay Mehra, vice president, digital and e-commerce at Shiseido Asia Pacific, noting that data and online selling experience can help firms bundle offers, decide on packaging and distribution, and influence where to set up a physical presence.
“This data is very powerful and very insightful, if used properly,” Mehra added.
Unilever, whose products range from Hellmann’s mayonnaise to Dove soap, said it is seeing more demand from rural consumers in developing markets like Indonesia and Vietnam.
“With all our e-commerce partners, we’re using data to help us find innovative solutions to unlock key barriers of high cost delivery and poor credit card penetration in remote areas,” said Anusha Babbar, e-commerce director at Unilever Southeast Asia and Australasia.
The conglomerate, which works with the likes of Singapore online grocer RedMart, Indonesia’s Blibli and Vietnam’s Tiki, said it introduced its St Ives skincare brand on Lazada after seeing a trend towards natural products and shopper search data.
DATA AND LOGISTICS
“Traditional retailers will struggle to see customer behavior,” said Lazada Thailand’s CEO, Alessandro Piscini. “We can tell if a customer is pregnant from their search behavior.”
Lazada, he said, plans to use data science to help its merchants customize offers for specific customer groups based on age, gender and other preferences.
Zalora, which sells clothing and accessories online in markets including Singapore, Malaysia and Indonesia, said it was working on ad-hoc projects with some brands to help them understand their customers based on data.
Lazada and Zalora are among the few e-commerce platforms that operate in multiple Southeast Asian countries. But the region is becoming a new battleground as Amazon (AMZN.O) and JD.com (JD.O) make beachheads in Singapore and Thailand.
Lazada Thailand will focus on partnering with fast-moving consumer goods companies to maintain its lead, Piscini said, and is expanding its logistics footprint across a region that has poor roads, clogged cities and thousands of often remote islands.
To be sure, online still contributes a tiny portion to consumer goods companies’ sales, but some local firms are going beyond partnerships and investing in their own e-commerce capabilities.
Thailand’s top consumer goods manufacturer Saha Group (SPI.BK) (SPC.BK) has seen online sales of some of its brands rise tenfold since it began a partnership with Lazada in June, but online still represents just 1-2 percent of total sales.
Saha is using e-commerce data to customize offerings.
“We now make real-time offerings to customers. Before, promotions would be seasonal,” Chairman Boonsithi Chokwatana told Reuters.
The company, whose products include instant noodles, toothpaste and laundry detergent, is investing 2 billion baht ($ 60 million) in logistics to support its e-commerce ambitions, including a 21-storey warehouse and a big data team, he said.
Reporting by Aradhana Aravindan in SINGAPORE and Chayut Setboonsarng in BANGKOJK; Editing by Ian Geoghegan