The evolution of e-commerce to social commerce
by Jonathan Wong, email@example.com. Posted on October 7, 2012, Sunday
GeekZen.com — Niching the online market
GeekZen.com is a relatively new face in the Malaysian online retail market place but what makes it stand out is that the products that it carries isn’t your easy to find, run of the mill products.
Boasting a wide array of quirky gadgets like the Boombotix Speakers and ‘The Prop’, GeekZen is no doubt making its own niche by targeting the quirky side of Malaysian online consumerism.
Reuben Yap, founder of GeekZen explained that, “Broadband penetration has increased a lot and people are getting more comfortable with purchasing online.
Companies like AirAsia I think have gone a long way in building this confidence.
“Although blogs that sold stuff have always existed, social media such as Facebook pages have made it easier for online retailers to reach their customers and reduced the barrier of entry by making it easy for anyone to start up a reasonably compelling site.” Yap further added that, “Also with the advent of social media, there is now a need for more customer interaction since now feedback is published for all to see.
I think the place that has seen one of the biggest changes is games.
Platforms such as Steam have totally revolutionised the way people buy games and I can say that piracy rates is a lot lower than it used to be.
The key is to make it easy and affordable.
Yap admitted that being a ‘baby’ in the industry, its difficult to gauge GeekZen against the other players but admitted that though big players like Lazada.com.my have made signifi cant inroads, there has been an uptick in interest in online retailers with Rakuten and Newegg opening local Malaysia shops.
“The online retailing scene is definitely maturing.” Yap further explained that among the advantages of online retail was the ability for targeted marketing.
He said that online retailing allowed much more finetuned advertising campaigns that could home in on demographics like age group, gender, geographical location and even language.
“It also reduces the overall cost of advertising since you can also pay for CPC (cost-per-click) whereby only if someone visits your page, do you have to pay. Compare this with traditional media that has broad-spectrum tools where you can only have rough control on your demographics although a potentially wider reach.” Yap mentioned that for online retailers, physical media although remaining important, it definitely played a smaller role especially since it could not actually ‘click a link’ on a physical ad.
“I think the most important differentiator of online advertising and traditional marketing is the ability to see statistics on conversions, sources of traffic and how people behave on your site such as via Google Analytics.
These tools give insights into consumer behaviour and the effectiveness of an advertising campaign in much more detail than traditional ad media,” he added.
However Yap also explained that online retailing had its own drawbacks in the sense that the lack of a salesman to talk up the product and convince customers to buy the product.
This was where he stated that the importance of site design and layout was crucial as the ease of navigation, description of the product, clear screenshot, and creatively made videos go a long way to making the sale.
Yet this was still lacking in Malaysia’s online retail stores as the scene here tends to compete on price and contain uninspired product image/descriptions.
Among the other drawbacks was the fear of Internet safety but Yap felt that the change was slowly manifesting itself as the public had already more or less come to grips with purchasing online as shown by statistics.
The remaining thing now would be to further build customer trust by offering a generous return policy like Zappos said Yap.
“This is where I am sad to say that the ‘Asian Mentality’ has lead to many retailers being rather wary of offering generous return policies for fear of being taken advantage of.
For example, returned products that are replaced with counterfeit goods or products damaged by customers due to their own misuse are common though thankfully still remain minority,” Yap stated.
On the next phase of the e-commerce evolution chain, many speculate that the next major step was towards mobile commerce as in the ability to access these online stores using one’s smartphone and so forth but Yap elaborated that despite the emphasis on mobile retail, it might not be as compelling as it was hyped up to be, at least not on mobile phones.
“There’s only so much you can explain in such a small screen space.
I have yet to come across an online retailer that implements this creatively.
“Tablet apps might be more compelling whereby instead of just a site, you have an app much like Mac’s App Store or Google’s Play Store except you have your wares there. Having an application gives more freedom of display and a more seamless purchasing experience as opposed to a website.” The other issue being faced by the online retailers included logistics.
He commented that one of the main problems was that the postal services were still rather uncompetitive especially for larger packages.
“Unlike the United Kingdom or the US where the cost of shipping is rather low and fast, Malaysia still has some way to go especially reaching regions such as Sarawak and Sabah.
“Granted it has improved a lot but there is some way to go especially with the rate of tracking updates.
The lack of API (application programme interface) for Pos Laju makes it hard for online retailers to integrate tracking and rates into their sites,” Yap added.
There was also a lack of local Malaysian quality web/ media developers as the ones in the market at the moment generally charged ‘ridiculous’ prices with very varied work quality.
Despite the issues being faced in the industry, the lower overheads and cost of entry, the absence of the need to maintain a shop front as well as the ability to work from home with minimum staff, Yap believed that the online retail industry in Malaysia was only starting to take traction and would no doubt grow even further as time went by.