According to Edge by Ascential’s™ Ecommerce Performance Index report (E^I), the Asia-Pacific region is experiencing rapid growth in consumer spend on electronics (CE). Forecasts predict an average of 9.4% year-on-year growth through 2023 and that ecommerce will become the dominant sales channel in the CE space during that time.
The Chinese and Indian markets are expected to grow the fastest at 11.3% and 10.7% respectively, while Japan is projected to see 4% growth year-on-year. Of the three, China is by far the biggest market – continuous and rapid urbanization means that one billion people will live in Chinese cities by 2030.
According to Edge by Ascential forecasts, ecommerce will account for 90% of all CE sales in China by 2023, while the digitally addressable population in India is expected to more than double during this time, ensuring rapid ecommerce growth there too. Brands that want to capitalise on these trends must ensure that their online presence is strong.
The analysis looked at the smartphones, headphones and ovens product categories between January 28 and March 21, 2019, for China, Japan and India.
Edge by Ascential’s E^I provides brands with the crucial intelligence needed to establish and benchmark their ecommerce strategy.
E^I utilizes proven methods to calculate brand performance against key ecommerce metrics, including product availability, pricing & promotions, ratings & reviews and image presence.
E^I highlights the strengths and weaknesses of different brand strategies through online retail platforms, and identifies which brands are ahead or behind expected category performance, along with holistic category view of market performance.
The metrics analysed by E^I are:
AVAILABILITY - Measures the supply/output of stock into the supply chain, highlights missing products and flags discontinued items for removal, ensuring the entire portfolio is consistently available on all online channels.
PRICE & PROMOTIONS – Identifies which products are underperforming due to price point and monitors the impact of promotions.
RATINGS AND REVIEWS - Identifies the volume of reviews at the product level to reflect consumer engagement, and SKU level ratings to reflect product and service quality.
IMAGE - Ensures that a primary image is available for each SKU.
Understanding the trends
How should brands manage their ecommerce portfolios and build their ecommerce strategies to take advantage of these trends? The E^I analysis can help you to identify the strategies that work in ecommerce.
For example, in the smartphone market on JD.com, both Apple and Samsung scored high in E^I despite above average prices, thanks to a high number of reviews for both brands, while Oppo, Viva and Huawei all performed poorly. On TMall, however, Xiaomi and Oppo were the best performers due to lower prices, high numbers of reviews and more promotional activity. Apple managed to bring its high consumer engagement rates to Tmall as well, but its E^I score suffered due to high prices, low promotional activity and availability issues.
Focusing on customer engagement
The burgeoning Indian market is another example that illustrates the importance of scoring highly in ratings and reviews. The CE market is dominated by Walmart-controlled Flipkart, and two of the international powerhouses control the headphones market there. Motorola and Sony landed the highest E^I scores in the Indian headphone category due to high customer engagement and lower prices compared to the other players. International brands, particularly Apple and Bose, suffered from availability issues. Based on the E^I analysis, Bose should reconsider its market strategy due to a combination of high prices, low promotion and poor consumer engagement performance. Indian brands, meanwhile, should focus on increasing customer engagement.
“E^I makes all the difference to a brand because it helps them understand their online performance against competitors across the key retailers, and to make the appropriate portfolio and pricing strategy to increase their online presence,” said Edge Ecommerce Consulting Director Jill Meng.
If you’re interested in learning how Edge can help grow your e-commerce sales, please contact our consultant team at firstname.lastname@example.org and +86 21 52993930 ext 812.