REVEALED: How Thailand’s Retail Giants Dominate the App Market

Thais are increasingly working longer hours.

According to a survey conducted by the United Bank of Switzerland, Bangkok has the world’s 5th longest working week, with an average of more than 42.5 hours.

Longer hours means more time away from family and friends, which is perhaps one reason why smartphone use is so high in Thailand, and indeed why digital has become such a prevalent means of communication.

Indeed, compared with their regional neighbours, Thai consumers are digitally savvy:

They know how to evaluate online and offline deals, understand payment and delivery methods, and recognize the differences among online platforms. Of the consumers who are digitally connected and go online, 95% have smartphones. Thai consumers also spend more time online – 3 hours per day on average, compared with 2 hours per day spent by their regional peers. Consumers aged 20 to 39 make the most online purchases.(Source: bcg.com)

Among Southeast Asian markets, Thailand (79 percent) has the second largest mobile traffic after Indonesia (87 percent) (Source: techinasia.com). This has presented a huge opportunity for retail brands to engage and communicate with consumers through smartphones and tablets.

Social networking, messaging, ride hailing and gaming apps generally dominate time in-app, but retail apps are growing in popularity and have fast become a part of everyday mobile life.

Why?

Because smart brick and mortar brands are beginning to understand how to bridge the gap between online and offline shopping, and are connecting with their customers via an omni-channel experience that engages the consumer wherever they go.

Conversely, ecommerce stores have become smarter at leveraging offline marketing activities to increase brand awareness and drive higher app-install rates.

In-app and website-based shopping is the primary model for companies like Lazada and Ali-Express, and for auction sites and C2C marketplaces like Chillando, Kaidee, and Shoppee, so one would expect these apps to be dominant in the shopping category of the app stores.

But in recent years, the landscape has changed: Brands like Uniqlo, Central Mall Group, Ikea, King Power, Oriental Princess, even Watsons, are regular features in the 20 shopping apps on the app stores, and often in the overall rankings, too.

top 20 shopping apps thailand
(Source: similarweb)

This tells us that Thais aren’t just shopping on mobile through online marketplaces, but also shopping, browsing and interacting through the apps of brick and mortar stores. Traditionally “offline” retail brands are continuing the conversation, in-app.

Online buying isn’t just an urban phenomenon either: urban (27.2%), suburban (21.6%), and rural (20.8%) consumers alike shop online because it makes a wide variety of products available to consumers with limited access to stores. (Source: bcg.com)

The normal ecommerce model isn’t suited to every product vertical though.

For example: fresh foods and everyday convenience items are usually items that consumers need to receive quickly, creating opportunities for on-demand delivery services like Line Man to emerge.

And then there are more personal items like make-up, or big electrical purchases like fridges, TVs and computers, which people generally want to view in-store and speak with an expert about.

However, this doesn’t prevent companies selling such products from taking advantage of the mobile retail space. Indeed, the impressive App Store rankings of Oriental Princess and Watsons are testament to that.

But perhaps one of the best examples of a traditionally “offline” retail store connecting with its customers through an app is 7-Eleven.

The digitisation of the brand’s ever-popular stamp collection scheme in the form of 7-Eleven’s M-Stamp mobile campaign has resulted in millions of happy customers engaging with the brand both in and out of the store.

The 7-Eleven app topped the overall App Store charts after first launching the campaign, and has remained a staple top 20 feature on both iOS and Android since.

7-eleven-app-thailand

You see: ecommerce is just one area of potential for a retail app.

Traditional retail brands who feel they are locked into an offline model should look closer at the possibilities of consumer engagement through gamification and mobile incentives, which can be delivered through rewards, points, vouchers and special “mobile only” offers to redeem in store.

Moreover, selecting the appropriate category for your brand could give you an advantage.

For example, 7-Eleven could arguably fit into either ‘shopping’ or ‘lifestyle’, but the brand chose ‘lifestyle’ because it isn’t selling items through its app, but rather engaging users through rewards that lead them back to their brick and mortar stores.

There is more to mobile retail than just ecommerce.

3 Keys to Retail App Success

1. Offer a Range of Payment Options

One key to retail app success in Thailand is to offer a broad range of payment solutions. And here’s why…

Credit card payment is the most popular payment solution in Thailand, but is still below the 9% average for the ASEAN region. Because of this companies need to offer convenient alternatives.

For example, 81 percent of ecommerce companies currently offer a bank transfer option like ATM transfer.

Additionally, Thailand ranks second in the region (next to Vietnam) for offline payment methods such as over-the-counter service at 7-Eleven stores – 46 percent of ecommerce companies offer this option. (Source: techinasia.com)

popular-online-payment-solutions-thailand
(Source: iPrice – State of eCommerce SE Asia 2017)

While many consumers may want to purchase in-app and have their items delivered, 30 percent of the country remains unbanked and using over-the-counter payment services for goods bought online. (Source: mckinsey.com)

This is good news for traditional brick and mortar brands that want to engage with their customers via an app but don’t want to sell directly on mobile.

Instead, these brands can offer incentives for users to visit the store, such as enabling users to reserve exclusive items, or redeem a digital voucher on purchases over a certain amount.

2. Smart Promotion & Target Marketing

Knowing when to market to your users is essential in increasing sales.

For example: knowing when your app users are most active, and targeting promotions to coincide with this activity, will drive engagement and higher ROI.

Interestingly, iPrice reports that ecommerce merchants in Thailand see an uplift of up to 15% in conversion rates on a Wednesday.

Compare this with weekends, when conversion rates can dip as much as 30%. This may be because on weekends consumers are more likely to be visiting malls and making purchases at brick and mortar stores.

online-shopping-statistics-thailand

This might be bad news for ecommerce apps that rely on in-app purchases, but it’s good news for brands with a high street branch.

By using push notifications, in-app messaging and location-aware technology such as Bluetooth beacons, high street brands can communicate with users through the app and encourage them to visit the store to take advantage of special offers, flash promotions or to redeem points. Smart data collection can help personalise these communications based on historical activity.

Timing is everything, so they say. And according to the data, Thais do most of their online shopping at 3pm. Thais also like to shop at 11am, and are partial it seems to a late night stint at 10pm.

This data is gold dust for the savvy marketer, who will use it to better promote new products, flash sales and seasonal/holiday promotions.

online-shopping-trends-thailand-days

Market-level insights are a great starting point, but certain consumer segments behave differently, so optimising based on your own first-hand behavioural data is a must.

Leading marketing teams are increasingly using mobile marketing automation platforms to trigger personalised messages at the optimal time for each user, based on that customer’s unique usage habits.

3. Drive Higher Conversion Rates Through an Omni Channel Experience

Mobile traffic outstrips that of desktop in Thailand, but website conversion rates still reign over mobile. In fact, desktop traffic converts at more than double that of mobile traffic.

Thais also buy bigger on desktop, with a desktop basket worth an average of $47 vs. $39 on mobile.

This data demonstrates the importance of developing an omni-channel experience that maximises revenue by taking advantage of all potential points of sale to achieve the highest overall conversion rate possible.

This omni-channel experience should include a user-friendly desktop experience, a mobile responsive version of the website – accessible via phone and tablet – and an app that is permanently accessible on the user’s home screen.

Each platform should interact: For example, if a user adds something to the cart in-app, the item should be visible in the desktop cart if the user changes platform and logs in from a computer.

Brands that invest in a cross platform experience may see a correlation between high desktop traffic and App Store ranking. There may be two reasons for this:

1. eCommerce websites that encourage users to download and install their app (often using exclusive mobile-only incentives to drive high adoption) will be driving more qualified traffic to their App Store listing page, which in turn may result in a high click-to-install rate, which is a ranking factor on app stores.

2. Driving a high volume of traffic to your app store listing page and retaining high install rates will naturally lead to more ratings and reviews.

If these metrics are consistently positive, you ‘ll see organic installs increase further, given their influence on both the search ranking algorithms of the app stores and the install conversion rates of browsing users.

top-retail-apps-thailand
(Source: iPrice Map of eCommerce-Thailand)

 

Important Takeaway Bites…

  • Thai consumers are mobile savvy, and smart brands are joining them on mobile, and in app, to be part of the conversation.
  • Retail apps aren’t just for ecommerce websites. The majority of popular brick and mortar stores can leverage the power of mobile to better engage with their customers, increase brand awareness, drive higher customer loyalty and increase revenue.
  • Ecommerce stores/apps must offer a broad range of payment options that caters for the unbanked population and provides the ability to pay offline in stores like 7-Eleven.
  • By leveraging the use of smart data, you can better understand when your users are most likely to engage with your promotional activity and make a purchase.
  • To maximise conversion rates, brands should create an omni-channel experience that provides an interconnected mobile and desktop infrastructure. A user should be able to browse in app, add to cart on mobile, and checkout on desktop, without having to take the same action more than once.
  • Encouraging mobile website visitors to try your app by incentivising an install might lead to higher rankings on both the Apple and Google app stores – due to a higher click-to-install rate and a higher likelihood of positive ratings and reviews.

Appsynth works with big brands to create retail apps that massively increase brand awareness, customer retention and overall revenue. If you want to gain more customers and increase your bottom line, contact us here.

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