Thailand's Future Shopper 2023: Divergence and Disruption of the Status Quo

Online shopping is not a trend anymore; it is the norm.

As Thai shoppers become more comfortable with online shopping, variety-seeking behaviour comes into play and their online shopping journey no longer converges on major platforms.

Compared to last year, marketplaces, social media, search engines, and YouTube all saw a significant decline in influencing the shopper journey as consumers shifted more towards brand websites and are more daring to explore other niche channels. This is a tendency of individuals to seek out new or different options or experiences as they become more comfortable with online shopping.

Unlike in previous years, consumers' online spending is highly fragmented and spreads out across multiple platforms, with the vast majority of online platforms receiving less than 20% of total consumer spending.

These are key findings from the Thai edition of Future Shopper 2023 report by Wunderman Thompson that reflects on the Divergence and Disruption of the Status Quo.

In Thailand, this global commerce study was conducted with a total of 1,014 respondents nationwide. Divided into 47% male and 52% female and 60% who reside in Bangkok and 40% in provinces, the respondents range in age from 16 to 55+ years old to cover all key demographic cohorts—baby boomers, Gen X, Gen Y, and Gen Z.

Data show that digital comfort has reached a saturation point, and despite the removal of Covid restrictions, which means that people have the freedom to go out and shop more in-store, digital usage remains strong.

At the same time, expectations and priorities of online shopping vary between generations: younger generations are more likely to prioritize variety and instant gratification whereas older generations are more likely to prioritize deals and good value.

A majority (60% - 70%) said more than 50% of each stage of their journey (inspiration, search, and purchase) happened online, of which the status quo is diverging and being disrupted.

INSPIRATION: Motivate ME!

Marketplaces still lead inspiration, but a decline in inspiration from marketplaces is seen alongside that from social media, YouTube, and search engines. With 76% of the respondents agreeing that they had encountered products or reviews on marketplaces that were suspected to be fake, these channels still have credibility issues, which may have led many consumers to look for inspiration elsewhere, including comparison sites, brand websites, and in-store.

SEARCH: Convince Me!

In the search stage, major players from last year saw a significant decline while more of "niche" platforms grew strong such as price comparison websites, branded websites, and in-store.

In fact, 2023 saw consumers searching for information on brand websites almost as much as on social media channels! Search is the stage where online is the most important with over 20% of consumers saying that they spent 91% up to 100% of their search online. However, consumers choose different channels to search based on the types of products they are interested in: marketplaces dominate in clothing and household products whereas health and pharmaceutical products are largely searched in-store and financial products are mostly searched by means of search engines.

PURCHASE: Take My Money!

The number of consumers who spend more than 90% of their total spending online grew by 300% in 2023 and consumers who spend between 1,000 and 35,000 baht saw roughly 5% - 10% increase in comparison to last year.

The groups that are most comfortable spending more than 30,000 baht on a product online are younger millennials (25 – 34 years old) and Gen X (45 – 54 years old). Marketplaces still dominate purchases, but their appeal is declining.

Despite a decline for Shopee, growth was seen in other marketplaces such as Lazada, retailer sites like 7-Eleven Online as well as department stores, brand websites, and niche channels like gaming and Metaverse.

Noteworthily, consumers bought more frequently from brand websites than social media in 2023! This can be attributed to consumer preference for clear incentives, high-quality information, and accurate product description as the most important aspect in their purchase decision.

In addition, free delivery and better price are the most important factors in choosing to buy directly from a brand online as opposed to other channels. Overall, KOLs are most influential in driving purchases (28%), followed by family (17%), while the power of streamers in influencing purchases has declined significantly from 17% to just 4%.

Social media plays an important role in online shopping. The number of consumers who have purchased on social platforms grew from 62% last year to 80% this year.

Facebook continues to lead despite a significant decline from 61% to 38% while TikTok solidly gained ground from 8.11% to 29.8% as a purchase channel. Live shopping events on social media remain an effective method to drive conversions with 73% of all respondents saying that they have purchased an item after watching a live shopping event. However, live shopping does not drive social media loyalty. The study found that the main drivers for consumers to purchase more frequently on social media platforms are exclusive offers, pleasurable experiences, and fast delivery.

MORE SHOPPING, HIGHER EXPECTATIONS: A Call for Better Online Shopping Experience

Increased online shopping comes with greater expectations. In addition to free or cheaper shipping, shoppers expect faster delivery and the convenience to get their orders delivered anywhere they are located.

Overall, a majority of 42% expect delivery within a few days. While the number of consumers who expect delivery within 12 hours has grown by about 30%. In fact, 30% of Gen Z expects delivery within 1 hour! The categories in which consumers are willing to wait for the longest (more than 2 days) are automotive, luxury, second-hand products, clothing, and toys.

Despite fragmentation across the journey, Shopee and other marketplaces still provide the best online shopping experience across all metrics, especially in terms of the best prices and easiness to find the product the customers are looking for.

The second-best experience overall is found with retailers, whose strengths lie in strong customer service and in-stock availability of items that the customers want. Brand websites are strong in terms of access to brands that the shoppers want while social media are strong in consumer-relevant content and product reviews and advice. Moreover, findings from the study suggest that better experience leads to higher loyalty.

In addition, online shoppers expect convenience and a variety of payment options. They also want a more innovative and more entertaining shopping experience as online shopping has evolved from an act of functional necessity into an emotionally driven "retail therapy"—a form of enjoyable pastime. Therefore, consumers of today's time want new, tech-driven shopping that provides them with a more entertaining experience.

KEY TAKEAWAYS & RECOMMENDATIONS

1.          The Status Quo is Being Challenged – Brands must strive to be omnichannel, not just on major platforms but also on niche platforms like price-comparison sites, retailers, and other marketplaces.

2.          Consumers Want to Spend More Online, But They Also Demand More – Brands must meet increasing consumer demands: offering the best deals, expanding product choices, highlighting product uniqueness, and ensuring faster product delivery.

3.          Maximize Your Brand's Home – Brands must ensure their websites offer an appealing, user-friendly experience with clear product information. Additionally, consider offering exclusive deals or promotions for direct website purchases.

4.          The Online Shopping Journey Has to be Fun – Identify touchpoints in the online shopper journey and create joyful experiences: gamify shopping, entertain with AI chatbots, encourage shareable purchases, incentivize reviews, and digitize your brand for gaming.

5.       The Online Shopping Journey Has to be Personalized –  Brands need to have a clear CX strategy that is centred around delighting consumers at every stage of the shopping journey - from being inspired by a YouTube video to searching for the best deals on price comparison sites to delivering their orders. Brands need to understand what makes consumers tick and how expectations and priorities differ between generations.

Drakon Sirakovit, Chief Strategy Officer at Wunderman Thompson Thailand, said, "In such a fragmented retail landscape today, it is not only advantageous but imperative for brands and retailers to provide seamless shopping experience across all channels, including marketplaces, social media, search engines, and in-store. Success can arise from a well-balanced combination of reasonable price, great service, and experience designed on all channels and devices to build growth and retain customers. Brands and retailers need to examine how ready they are for future consumers. Clues to future consumer insights come in the guise of data available today. Are D2C brands spending their resources right to fully address expectations of online shoppers?"

Parattajariya Jalayanateja, Managing Director, added, "As suggested by the findings, online shopping has already become the norm. Consumers are more comfortable with it and they are taking different online customer journeys. One of the most important conclusions from this study regarding brand experience, no matter online only or online offline, is that every touchpoint makes an impression, good or bad, and can lead to loyalty or trigger a departure from the brand. It is therefore important for brands to make sure that their customer experience is well-designed based on genuine consumer insights from the start to the end of the journey.  At Wunderman Thompson, we highly prioritize end-to-end customer journeys in addition to our long-established strength in creative communication.  Our Mirum CX team is specialized in customer experience and customer journey design. With one-stop capabilities under one roof, we offer everything from customer segmentation research and analysis through to strategic communication planning and full journey design for a seamless offline and online experience that will help brands deliver great experiences and click with the consumers."