Insight around the world (IRM53)
Director, Marketing & Communications, Borderfree
Singapore is the market that comes out on top for cross-border ecommerce, according to a study by Borderfree. It has a thriving economy, households with high disposable income and is a nation where shoppers are familiar with global brands. All of these factors are vital to an international take-off and for a market to embrace the retailer’s brand. Buying online from foreign retailers is ingrained in Singapore’s shopping culture, with more than 50% of their online shopping being cross-border. Borderfree ranks Singapore as the fifth largest market by sales volume, with shoppers spending an average of £142 per order with retailers on the Borderfree platform in 2014.
Along with English being one of Singapore’s four main languages, a bricks-and-mortar presence within the city-state from top fashion retailers like Jimmy Choo, Coast and Karen Millen has helped to bolster brand familiarity with UK retailers.
Singapore’s retail ecommerce spending stands at £2.8bn, with half of all traffic coming from mobile devices. Much to the appreciation of savvy Singaporean consumers looking for more bang for their buck, most goods are imported duty-free with only those items with a value of more than 400 Singapore dollars (£193) subject to the 7% Goods & Services Tax.
Key to successfully targeting the Singapore market is understanding its demographics and shoppers’ unique preferences. Data in Borderfree’s report paints a picture of the average online Singaporean shopper and how they like to shop: 87% of the population use the internet and smartphone use is among the highest in Asia at 82%; Three hours and three minutes is the average time per day a Singaporean spends using the internet with peak shopping hours between 10pm and 12am local time; Expenses for personal appearance-related purchases top out at £2,255 per year; The 20-64 year old population has 2.7 credit cards per adult with 80% preferring credit as a payment method.
As UK retailers look to take advantage of the global ecommerce market, Singapore is without a doubt a key target market which is set up to support our brands.
Global BrandZ Valuation Director, Millward Brown
In the tenth annual BrandZ Top 100 Most Valuable Global Brands ranking by WPP and Millward Brown, the most valuable retail brands lack physical stores. Chinese e-tailer Alibaba shot into the top spot of the retail ranking after its IPO, overtaking Amazon and adding its $66.4bn brand value to the sector. Retail is now one of the fastest growth categories alongside technology.
Amazon, the no.2 retail brand, saw a -3% decline in its brand value to $62.3bn but remains more valuable than Walmart, which it overtook in 2013. Walmart, no.3 in the retail ranking, is worth $35.2bn and has 11,000 stores worldwide.
Discount retailers, with their value and quality offers have shown strong growth in recent years. Aldi (no.8), grew its brand by 22% to $11.7bn and Lidl (no.20), was up 27% to $6bn. Advertising focusing on promoting quality produce equal to the major multiples has helped the discounters’ value proposition and resulted in a shift in the balance of power. The major supermarkets no longer dominate the retail ranking.
The top ten most valuable retail brands globally in 2015 are: Alibaba; Amazon; Walmart; The Home Depot; Ikea; eBay; Woolworths; Aldi; Costco; Lowe’s.
In addition to no.1 brand Alibaba, another Chinese ecommerce site ranks within the top retail listings. JD.com processed 689 million orders in 2014 to enter the ranking at no. 16. The ability of Chinese brands to build brands overseas as well as at home is a common theme across many categories in this year’s ranking. According to The Economist Intelligence Unit, China is expected to overtake the US as the world’s largest overall retail market within five years.
As retailers continue to fight off fierce price competition and operate in a category undergoing radical transformation, there’s an underlying urgency to remain relevant to shoppers. Adopting a shopper-first attitude is not enough; retailers also need to create meaningful and differentiated brands if they want to find a path to growth.
e-commerce expert, PostNord
During the first quarter of the year, consumers in the Nordic region spent approximately SEK 36.5bn (£2.85bn) online. This corresponds to an increase of around SEK 2.5bn (£190m) – and a rise of 7% – compared with the same period last year, according to PostNord’s report E-Commerce in the Nordic Region.
Across the region, people are increasingly shopping online. The Danes surpassed the Norwegians as the population that shops online the most (76% and 75%, respectively), but the percentage also increased slightly in Sweden and Norway.
However, while the development of ecommerce continues to move forward it is crucial that deliveries meet consumers’ demands. Almost half of all people in the Nordic region consider it very important to be able to choose the delivery method of their purchases. Recipient power is valued highest in Denmark, where over one third of online shoppers consider it very important to be able to choose how an item will be delivered.
In Denmark and Sweden, about one third of online shoppers expect their purchase to be delivered within three days. In Norway, 25% expect the same delivery time, and in Finland, 33% of shoppers are open to waiting up to five days.
The most popular option for all shoppers is to collect their purchase from their partner outlet. In Sweden, Norway and Finland, about half of all consumers want to pick up the item themselves. But in Denmark, where home deliveries are more common, only one fifth want to go to a service point themselves. Generally speaking, interest in home deliveries in the evening is low in all countries.
The UK, US, Germany and China still top the list of countries from which people in the Nordic region shop from abroad with clothes and shoes being the most popular items purchased. Sweden is still the leading country for shopping from abroad. However, Swedes do not shop very much from their neighbouring countries.
Frank van den Berg,
Managing Director, Salesupply UK
In terms of demographics the Brazilian market is attractive, it is large, has a growing middle class and has long had a promise of further future growth. With more than 100 million people classified as c-class or above Brazil is the 8th largest market in the world when measured in GDP. The rule of thumb when investing in Brazil are: three-year horizon; US$3m budget; three times product cost.
It takes an average company three years to get in the black. The set-up takes time and is expensive. Examples of what is required prior to opening for business are good tax advice, administrative support, a good lawyer and partners to manage logistical processes such as importing.
A US$3m spend is a realistic (minimum) figure over 3 years and is based upon a) the minimum cost of entering the Brazilian market, b) running an organisation with a minimal staff and c) a reasonable marketing budget. Depending on how fast you get traction in the market, you will be able to estimate how deep your pockets need to be.
The sales price (price point) of your product sale is key. Stability of the sales price depends on competition, including other market entries. Due to cost (import, transport...) the cost price of your product is likely to double or triple.
The World Bank Group agrees that Brazil is not an easy country for market entrants. According to its survey of 189 countries, Brazil ranks:
z 120th in terms of overall ease of doing business;
z 167th in terms of starting up a business;
z 177th in terms of paying taxes;
z 35th in terms of protecting minority investors;
z 123rd in terms of trading across borders;
z 118th in terms of enforcing contracts.
Brazil is notorious for bureaucracy, cost of doing business and dependency on ‘relationships’ when trying to do business. This does not mean it can’t be done, but it means that seizing opportunities is not for the fainthearted. Foreign companies can succeed and when they do the prize is sizeable.