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All that glitters: Shopping festivals fleeting e-commerce boom, finds survey
E-commerce companies need to develop a mobile app strategy to increase customer engagement and move away from overreliance on GMV through shopping festivals, a recent survey cautions.
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Illustration of an e-commerce app (JP/Donny Fernando)
I
ndonesia’s e-commerce companies are having to work harder to maintain sales figures, although frequent shopping festivals have racked up purchases, says a recently published survey.
The "Why We Buy" survey by online advertising company Criteo, published Tuesday, indicates that shopping festivals are not the only draw for customers.
Pauline Lemaire, Criteo's account strategy director for Southeast Asia, Taiwan and Hong Kong, said that relying on shopping festivals was not profitable in the long run, although the resulting sharp increase in sales was good in terms of gross merchandise value (GMV).
However, e-commerce companies “are also faced with a real challenge to differentiate themselves,” Pauline told The Jakarta Post by email after the survey's Jakarta launch.
“Our [survey] has shown that lowering prices is not the only way to win consumers’ hearts. Other considerations include ensuring the best value for money and a wide product selection,” she said.
Amid the rapid growth in the digital economy, economists and market analysts around the world are calling for businesses to focus on profit and loss and not just GMV – the traditional North Star metric (NSM) for a start-up's core value.
GMV measures total volume in sales value of merchandise sold through e-commerce platforms, which primarily facilitate transactions rather than promote direct sales. On the other hand, e-commerce companies earn revenue as facilitators through service or advertising fees.
