Tag: E-commerce

Singapore—The latest ‘e-Conomy SEA report’ from Google, Temasek, and Bain & Company has been recently released and highlights that in 2024, the digital economy will reach $263b in Gross Merchandise Value (GMV), a 15% increase over last year. Revenues have also grown 14% and are projected to reach $89b in 2024. The report suggests that the digital economy can achieve both profitability and growth in tandem, marking a significant step towards achieving sustainable economic value.

Why SEA is primed for AI-powered acceleration

Southeast Asia is quickly becoming a global center for AI innovation and adoption. With substantial investments in AI infrastructure and a dynamic ecosystem of startups and developers, the region is on track to harness AI’s transformative potential across a wide range of industries. 

In the first half of 2024 alone, SEA attracted over $30b in AI infrastructure investments. Additionally, consumer interest in AI solutions is surging, with AI-related searches increasing 11-fold in the past four years. The region’s young, growing population, high levels of digital literacy, and widespread smartphone usage make it an ideal market for AI-powered products and services. 

From AI-driven travel planners to generative AI-based fraud detection, AI is delivering value across SEA’s digital economy, with applications spanning various industries. Pro-innovation policies that encourage AI growth and responsible governance will further expand opportunities within the region’s digital economy.

From transport, e-commerce, and online travel–these are the sector redefining SEA’s digital economy

After years of investment and development, leading players in the region’s digital economy are now progressing toward profitability while maintaining strong double-digit growth in both gross merchandise value (GMV) and revenue. Continued growth is expected to be driven by deeper digital engagement among users, effective monetisation strategies, and the recovery of sectors affected by the pandemic. E-commerce has also regained momentum, fueled by the rise of video commerce.

E-commerce, projected to reach $159b in GMV by 2024, is now primarily driven by existing customers, who contribute up to 70% of its growth. This marks a shift from previous years when first-time shoppers were the main drivers. Established players are reinvesting to boost GMV and defend their market share, as international competitors disrupt the market. Revenue is expected to increase 13% year-on-year (YoY) to $35b in 2024.

Meanwhile, video commerce has rapidly grown to account for 20% of e-commerce GMV, a significant jump from less than 5% in 2022. This trend is reshaping the e-commerce landscape in Southeast Asia, transforming the consumer shopping experience. From live shopping events to content created by influencers, video has become an essential component of online shopping.

Food delivery is also gaining traction as dining-out habits stabilize and new monetization avenues, such as in-app advertisements and subscriptions, emerge. Revenue in this sector is forecasted to rise by 54% YoY to $1.7b in 2024, while GMV is set to grow by 7% to $19b. Platforms are experimenting with strategies for future profitability, such as improving restaurant visibility and using AI to optimize operations.

In another industry seeing growth, the transport sector has surpassed pre-COVID levels, with revenue expected to grow by 36% YoY to $1.5b, driven by increased demand and strategic pricing. GMV is projected to rise by 18% to $9b. Despite inflationary pressures, consumer demand remains strong due to the expansion of established players into second-tier cities and rural areas, along with aggressive promotions by new entrants seeking user growth.

Online travel is outpacing the broader digital economy in terms of Gross Travel Bookings (GTB) growth, fueled by intra-regional travel within Asia-Pacific. Higher airfares and a growing preference for luxury travel options are expected to push GTB to $46b in 2024, a 21% YoY increase, while revenue is set to grow 18% to $20b. While direct booking channels remain dominant, online travel agencies continue to successfully monetise their core services as well as adjacent offerings, such as financing and insurance.

Meanwhile, online media is on track for significant growth, with GMV projected to rise to $30b, an 11% YoY increase. Video-on-demand and gaming are key drivers, with SEA developers gaining recognition in casual gaming and hyperlocal content. Advertising remains a reliable revenue stream, while hybrid models incorporating in-app purchases, subscriptions, and ads are becoming increasingly popular to cater to diverse player segments. The rise of gaming influencers has fueled a thriving creator ecosystem, with livestreaming becoming a key tool for facilitating real-time interaction between sellers and consumers.

Lastly, Digital Financial Services (DFS) are expanding rapidly, with revenue expected to grow by 22%, from $22b in 2022 to $33b in 2024. Digital payments and lending, which make up more than 90% of DFS revenue, are the primary growth drivers. E-wallets have become widespread, partnering with major payment card networks, while QR code usage continues to rise. 

It’s worth noting that a generational shift in investor behaviour is reshaping the wealth management landscape, a trend that is likely to persist as more merchants accept digital payments, risk assessment improves, and consumers increasingly seek online solutions for insurance and wealth management.

Increase in investor confidence in SEA’s long-term potential

Despite the ongoing challenges in the funding landscape, investors have demonstrated cautious optimism, channelling nearly 50% of their investments into emerging sectors. Although the exit environment remains difficult, early-stage companies in Southeast Asia have made substantial strides toward profitability. There is also a growing emphasis on fostering cross-border collaborations and improving IPO regulations to enhance capital market conditions.

Last year, the report highlighted four key factors to revitalise the funding landscape: realistic entry valuations, proven monetisation models, a clear path to profitability, and reliable exit strategies. While the first three have been successfully achieved, creating dependable exit pathways is still a work in progress due to the continued challenges in capital markets.

Singapore continues leading SEA’s increased appetite in AI products, services

Singapore’s digital economy has shown impressive resilience and is expected to reach $29b in GMV by 2024, marking a 13% increase from 2023. E-commerce has bounced back, growing from $8b in GMV in 2023 to $9b in 2024, while sectors like online media and travel have experienced double-digit growth, driven by strong infrastructure and pro-business policies.

Singapore ranks among the top 10 countries globally in terms of interest in AI-related topics, with sectors such as education, marketing, and travel leading AI search trends. There is a high demand for mobile apps featuring AI capabilities, including content creation tools, photo editing apps, and AI-powered virtual assistants. 

AI has also played a pivotal role in boosting Singapore’s tourism industry, enabling chatbots to provide personalised recommendations, analyse visitor data to optimise marketing strategies, and enhance visitor experiences through interactive exhibits and customised guides.

To meet the growing demand for AI infrastructure, investments in AI-ready data centers reached $9b in Singapore during the first half of 2024, second only to Malaysia, which attracted $15b in similar investments.

Digital Financial Services (DFS) have also become a key driver of growth, with digital payments and wealth management leading the way. Singapore’s status as a regional financial hub has drawn substantial venture capital and private equity investment. To stay competitive, the Singapore Exchange (SGX) has introduced initiatives to improve exit options and attract investor capital and IPOs. Singapore’s favourable business environment, political stability, and tax incentives have further strengthened its position as a leading economic hub.

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For Sapna Chadha, vice president for Southeast Asia and South Asia Frontier at Google, Southeast Asia’s digital economy is rapidly evolving as businesses adopt innovative strategies to achieve profitability, fostering a more sustainable and resilient ecosystem. 

“The rise of video commerce is supercharging e-commerce growth, with live shopping and creator-led content reshaping how people discover and buy products. Southeast Asia is emerging as a global hub for AI innovation and adoption. With significant investments in AI infrastructure and a thriving ecosystem of startups and developers, the region is poised to unlock the transformative power of AI across various sectors,” she said.

Meanwhile, Fock Wai Hoong, head of Southeast Asia at Temasek remarked how it is encouraging that SEA’s digital businesses are now focusing on achieving the appropriate balance between growth and profitability.

“Investors have also started looking for the next wave of growth by investing in nascent sectors such as software and services as well as AI, demonstrating confidence in the long-term potential of SEA’s digital economy. Temasek remains committed to deploying catalytic capital to the region’s digital economy to achieve sustainable and inclusive growth so that every generation prospers,” he said.

Lastly, Florian Hoppe, partner at Bain & Company stated that Southeast Asia’s digital economy continues to do well, with continued double-digit GMV and revenue growth and a surge in profitability across sectors led by key players. He also remarked how the region is also attracting significant AI investment, with over $30b committed to AI infrastructure in the first half of 2024.

“To fully harness the transformative potential of Generative AI, businesses must advance beyond experimentation and invest in foundational elements—aligning AI initiatives with core business objectives to address real-world problems and create tangible value, strengthen AI talent, and building scalable, adaptable infrastructure for sustained growth,” he said.

China – JD Global Sales, JD.com’s international e-commerce division serving Chinese consumers worldwide, announced it has extended its services to Malaysia and Thailand. 

Consumers in both countries will now have access to JD.com’s extensive offerings, with added benefits for this year’s Singles Day (Double 11) shopping festival, including convenient free shipping options.

JD.com’s global sales business focuses on serving overseas Chinese consumers with a wide selection of high-quality branded products, including electronics, small appliances, home goods, apparel, beauty products, books, food, and more.

With this, Malaysian customers can enjoy free shipping on orders over RMB 399, with coverage for up to 6 kg by sea and 2 kg by air. In Thailand, free shipping is available on orders over RMB 199 by land, covering up to 2 kg. These options apply to self-operated (1P) products ordered through JD.com’s app.

This expansion follows JD Global Sales’ recent enhancements to shipping options, which introduced free delivery for consumers in the US, Japan, and Singapore in August. During Singles Day, U.S. customers will benefit from free economy sea shipping for small item orders of over RMB 888, with coverage up to 10 kg. 

Additionally, expedited free air shipping is available for select products such as phones, tablets, and computers in the U.S., Japan, and Singapore, with delivery as fast as four days.

Jakarta, Indonesia – E-commerce company Bukalapak has addressed reports of an alleged acquisition by Temu on the local e-commerce player. It is worth mentioning that various reports have stated that Bukalapak’s share price increased by over 22% in the past 5 days, from 120 rupiah on Oct 2, 2024, to 147 rupiah per share on October 8 over alleged acquisition talks.

In a letter to the Indonesian Stock Exchange (IDX) reviewed by MARKETECH APAC, Bukalapak stated that they are not aware of any information regarding its acquisition plans by TEMU.

“The increase in share price on October 7th, 2024 reflects the market’s reaction to unverified information regarding the Company’s acquisition plans, which has not been confirmed by the company’s management. Market speculation is beyond the company’s control,” wrote Cut Fika Lutfi, corporate secretary at Temu.

Bukalapak has advised public shareholders and investors to observe official disclosure of information by the company before making any investment decisions on the company.

It is worth mentioning that this news follows the Indonesian government mandate to ban Temu in the country in a bid to safeguard the standing of local SMEs in the country.

Jakarta, Indonesia – Popular Chinese e-commerce app Temu has been blocked from entering from Indonesia, according to a statement from Fiki Satari, Special Staff to the Minister for Creative Economy Empowerment at the Ministry–and confirmed by the country’s Ministry of Cooperatives and SMEs.

According to the ministry, should Temu enter the country, it will result in jeopardising sustainability of MSME players in the country.

“If Temu enters, it will greatly threaten local MSMEs. This application from China allows direct transactions between factories in China and consumers in Indonesia, which has the potential to kill small businesses here,” Fiki said in a statement.

Fiki explained that Temu’s business model enables goods to be sold directly from factories to consumers, eliminating the need for intermediaries like sellers, resellers, dropshippers, or affiliates. Furthermore, the platform offers subsidies, which significantly lowers product prices.

“They have entered the US and European markets, and are now expanding into Southeast Asia, including Thailand and Malaysia. Therefore, we must remain vigilant and ensure Temu does not enter Indonesia,” he added.

It is worth noting that since September 2022, Temu has tried to register its trademark in Indonesia three times. On July 22, 2024, they again applied for registration at the Directorate General of Intellectual Property Rights (DJKI), Ministry of Law and Human Rights.

“Temu App has tried to register trademarks, designs, and others with the DJKI. However, they have not been able to enter because there are already companies from Indonesia that have similar names and business categories. Even so, we must remain vigilant and continue to monitor,” Fiki explained.

Fiki hopes that various relevant agencies, including the Ministry of Law and Human Rights, the Ministry of Trade, the Ministry of Communication and Information, along with other stakeholders, will collaborate to prevent the entry of the Temu marketplace into Indonesia.

Singapore – TikTok, Instagram, and WhatsApp shops are preferred by Southeast Asian (SEA) consumers due to convenience, a new report from martech company Netcore Cloud recently revealed. 

While TikTok shop use is in the lead, Instagram and WhatsApp shops show a rise in consumer preference with 90% of respondents applauding its convenience.

In addition, 70% of chief executive officers plan on augmenting product personalisation through generative artificial intelligence (Gen AI) investments. The initiative is in response to the rising demand for personalised shopping experiences. According to the report, consumers want their product recommendations to be more relevant.

“As the Southeast Asian e-commerce market grows, personalisation and innovation remain critical for brands aiming to differentiate themselves. Gen AI is at the forefront of this transformation, empowering brands to create more immersive, tailored consumer experiences. This report outlines essential strategies for marketers to stay competitive and capture the opportunities presented by this dynamic market,” Saket Kumar Jha, chief revenue officer of emerging markets at Netcore Cloud, said.

Hong Kong – Alternative payment solutions are the preferred payment method for e-commerce purchases in Hong Kong (China SAR), collectively accounting for 41.7% share in 2023, according to data and analytics company GlobalData.

The report reveal that e-commerce market in Hong Kong grew by 10.5% in 2023 to reach HKD160.3b(US$20.5b), as increasing number of consumers shifted from offline to online purchases. The e-commerce market is estimated to grow by 13% to reach HKD181b ($23.1b) in 2024.

Amongst the various tools used for e-commerce purchases, alternative payments are the most preferred. They collectively accounted for 41.7% share in 2023, a trend that is prevalent in many Asian markets. This is mainly owing to factors such as simplicity, speed, and convenience.

Moreover, alternative payment solutions are followed by payment cards, which accounted for 38.6% of the total e-commerce transaction value in 2023. This can be attributed to convenience, pricing benefits such as cashback, discounts, and reward points as well as instalment payment options available with these cards.

Alternative payment solutions are followed by payment cards, which accounted for 38.6% of the total e-commerce transaction value in 2023. This can be attributed to convenience, pricing benefits such as cashback, discounts, and reward points as well as instalment payment options available with these cards.

Ravi Sharma, lead banking and payments analyst at GlobalData, said, “The e-commerce sales in Hong Kong have been growing at a robust pace, supported by the rising internet and smartphone penetration, robust online payment infrastructure, coupled with increasing consumer confidence in online transactions.”

Ravi added, “Hong Kong’s e-commerce landscape continues its upward trajectory, poised for substantial growth between 2024 and 2028, with an anticipated compound annual growth rate of 9% in transaction value to reach HKD 255.7b (US$32.7b) in 2028. Alternative payment solutions are expected to continue their growth and lead e-commerce payments in Hong Kong.”

According to the Office of Communications Authority, 96.9% of the households had broadband internet connection as of April 2024. Furthermore, online shopping festivals such as Black Friday, Cyber Monday, and Singles’ Day have also contributed to the overall growth of e-commerce in Hong Kong.

The retail industry is primed to continue its growth trajectory, with the global consumer class (comprising of consumers spending US$12 or more per day) reaching 4 billion in the previous year, and 5 billion people by 2031. In Asia-Pacific, the retail e-commerce market size is expected to grow by 8% CAGR from 2023 to 2028. These numbers reflect a growing appetite around consumer spending, but are retailers able to keep up? 

With the latest technology trends diving into how consumers’ lives continue to merge with the digital realm, personalised experiences are beginning to see even stronger demand, with 90% of businesses acknowledging that these experiences play a pivotal role in increased sales and even repeat business. However, figures show that only 35% of marketers say their customers have personalised experiences, illustrating a gap between perceptions and reality.

Personalisation – How Challenging Is It, Really? 

For retailers to even begin looking towards personalised experiences, they need valuable data and insights which they can tap into to develop their marketing strategies. However, the concrete data they require from their customers are stored in existing silos such as social media platforms or respective e-commerce sites, leaving the wider pool of retailers with a fragmented view of a customer’s behaviour, and in turn, inaccurate data.

Imagine a tailor creating a suit without considering the client’s budget, the suit’s purpose, skin conditions, or the climate it will face. This is akin to businesses ignoring key consumer insights. Without understanding these crucial factors, they struggle to offer truly customised solutions. Relying solely on partial data leads to misguided marketing strategies and product offerings that miss the mark, resulting in wasted resources and lost opportunities. Just as a perfectly tailored suit requires more than a good fit, businesses need a holistic view of their customers to deliver truly personalised experiences that resonate and satisfy.

In the competitive retail landscape, where standard data is widely accessible, retailers must differentiate themselves by offering exceptional consumer experiences and personalisation through deeper insights. Failing to do so risks leaving consumers feeling undervalued, dissatisfied, and disengaged, while competitors who prioritise up-to-date customer data will excel and dominate market share.

The Band-Aid Solution At Present 

To grasp any form of insights about consumers, retailers at present typically turn to first-party, second-party, and third-party data. First-party data, collected directly from customers, is highly accurate and compliant with privacy regulations like GDPR and CCPA, making it a reliable source. However, its scope is limited to the existing audience database, and it can become outdated if not regularly refreshed. Second-party data, shared between trusted partners, provides additional perspectives but may not perfectly align with a company’s specific needs and can also suffer from data staleness. Third-party data, quite commonly used, is often viewed as a cost-effective method for expanding audience reach, is collected from a wide array of sources across the digital landscape, including websites and social media platforms.

However, third-party data is fraught with challenges. It often contains incomplete or outdated information, making it less reliable for strategic decision-making. Additionally, it raises significant privacy concerns, as it is typically gathered without direct consent from the individuals, making it far less accurate and trustworthy than first-party and second-party data.

The Gold Standard of Data Collection

For the uninitiated, zero-party data, a term that has gained traction in recent times, is defined as information shared directly by customers, with transparency and knowledge on how their data will be used. Differentiating this from first- to third-party data, zero-party data is intentionally shared by customers themselves, delivering unmatched precision and relevance in grasping their needs, preferences, and expectations. 

Consider Lily, a fashion enthusiast who visits an online apparel site to cart out new outfits. By sharing past shopping information, and current style preferences with the site, Lily gives the company valuable insights into her interests – a prime example of zero-party data.

On a grander scale, businesses that utilise zero-party data will be able to foster healthier and more positive relationships with their customers, increasing their brand loyalty and building trust. 

Holistic Identity – What Is It? 

The Holistic Identity concept is designed to return data ownership from centralised platforms back to individuals, allowing them to securely manage, store, and share their information. This approach empowers individuals to control what they share and with whom, ensuring a unified and accurate representation of themselves are shared.

For e-commerce businesses, these solutions also streamline onboarding by enabling efficient identity verification and data sharing with a. single click, providing customers with a frictionless experience. This approach allows companies to gain deeper insights into their customers, enabling personalised product recommendations and marketing, which enhances satisfaction and loyalty.

Businesses that adopt Holistic Identity technologies into their technology stack reduce their liability by gathering only necessary customer data through zero-knowledge proof methodology, minimising the risk of data breaches, and ensure compliance with privacy regulations. 

The Future and Beyond

In today’s competitive and rapidly evolving market, businesses must be proactive in meeting consumer demands for personalisation and privacy. By leveraging zero-party data through Holistic Identity, businesses can unlock new opportunities, craft highly effective marketing strategies, and build stronger brand loyalty—all while ensuring strict adherence to privacy regulations. Embracing these advanced technologies is not just an option; it’s essential for retailers aiming to pivot effectively and lay the groundwork for sustainable, long-term growth.

This thought leadership is written by Glenn Gore, Chief Executive Officer at Affinidi

Singapore – AnyMind Group, a BPaaS company for marketing, e-commerce and digital transformation, has today announced the launch of a new feature on its platform for publishers, AnyManager, that taps on AI to enable online publishers to generate short-form videos from existing content on their websites. 

With the new feature on AnyManager, publishers can use AI to automatically extract article content and handle the entire video production process, and resulting videos can be delivered on a publisher’s own site through AnyManager Video. The new feature also supports social media formats and text-to-speech functionality, allowing publishers to distribute videos on their social media platforms.

By automating tasks traditionally performed by humans, publishers are able to create more content to adapt to changing media consumption patterns, without the need for production costs or too much additional human labor. Publishers can also have new means to reach a broader set of audiences on social media. 

This new feature is part of the recently launched AnyManager Video Player, a no-code video player that enables the distribution of video content and advertising on websites through a single ad tag implementation. AnyManager Video is already deployed globally and adopted by various publishers across Asia.

Hitoshi Maruyama, managing director of publisher growth at AnyMind Group, said, “We are constantly developing and integrating the latest technology into our platform to provide solutions that enhance publisher profitability. By utilising the newly launched AnyManager Video Player, efficient video ad generation and distribution is now even more accessible and possible. These enhanced video capabilities will continue to support the growth of publishers.”

In the futuristic sci-fi thriller Minority Report, Tom Cruise’s character walks through a shopping mall equipped with retinal scanners that immediately serve up holographic advertisements tailored to his personal needs and tastes. It’s intrusive, unnerving, yet feels incredibly believable. That day has finally come, beginning in e-commerce.

With the explosive growth of Large Language Models (LLMs), AI has become the buzzword of the decade, promising revolutionary changes across industries. Nowhere is this more evident than in the realm of e-commerce, where AI holds the tantalising promise of hyper-personalised experiences that can dramatically boost customer satisfaction and loyalty. However, as we stand on the precipice of this AI-driven revolution, it’s crucial to recognise that beneath the hype lies a landscape fraught with hidden challenges and ethical considerations.

The potential is undeniably exciting. It offers unprecedented capabilities to analyse vast amounts of customer data, identify patterns and preferences, and deliver highly tailored experiences. Through sophisticated data analysis and predictive modelling, AI can anticipate customer needs and behaviours with uncanny accuracy. This allows for real-time personalisation of content, recommendations, and even user interfaces, creating a seamless and engaging customer journey.

Natural language processing, another key AI capability, is revolutionising customer interactions through chatbots and voice assistants, making brand engagement more conversational and intuitive. AI’s ability to optimise pricing based on individual customer value and willingness to pay opens up new avenues for dynamic pricing strategies. Moreover, AI-powered sentiment analysis can gauge customer emotions, enabling brands to provide appropriate responses and experiences that resonate on a deeper level.

An Overview of AI in E-Commerce

AI plays a crucial role in enhancing personalisation across various e-commerce domains, including traditional e-commerce, social commerce, retail media, and q-commerce. In e-commerce, AI-powered recommendation systems analyse vast amounts of customer data, such as browsing history, purchase patterns, and demographic information, to provide highly personalised product recommendations that are tailored to each individual’s preferences. This not only improves the customer experience but also drives increased sales and loyalty. 

In the realm of social commerce, AI algorithms enable brands to create engaging and personalised shopping experiences by analysing user behaviour on social media platforms. By understanding individual preferences and interests, AI can deliver targeted content, product recommendations, and personalised promotions that resonate with each customer, fostering deeper connections and driving conversions.

Retail media, which refers to the use of a retailer’s owned media assets to deliver advertising, also benefits from AI-powered personalisation. AI algorithms can analyse customer data across multiple touchpoints, including the retailer’s website, mobile app, and in-store interactions, to deliver personalised ad experiences that are more relevant and effective for both the customer and the advertiser.

In the emerging field of q-commerce, or quick commerce, AI plays a crucial role in enhancing personalisation. By leveraging real-time data on customer location, purchase history, and immediate needs, AI can provide hyper-personalized product recommendations and seamless checkout experiences, ensuring that customers receive the right products at the right time, ultimately improving satisfaction and driving repeat business.

These applications paint a picture of a future where marketing becomes an almost magical experience, anticipating our desires before we even articulate them. However, this rosy vision comes with a significant caveat: the ethical implications of such powerful personalisation tools are profound and cannot be ignored.

Understanding Hyper-Personalisation Perils

The collection and use of vast amounts of personal data, essential for AI-driven personalisation, raise serious concerns about privacy and data security. The potential for this data to be misused, either through breaches or unethical practices, is a real and present danger. Moreover, the opacity of many AI algorithms creates a “black box” problem, where neither consumers nor regulators fully understand how decisions are being made about them.

There’s also the risk of creating filter bubbles, where AI-driven personalisation narrows the range of experiences and information presented to consumers, potentially reinforcing biases and limiting exposure to diverse perspectives. The use of AI in dynamic pricing, while potentially beneficial for businesses, raises questions about fairness and could lead to price discrimination.

Given these challenges, it’s clear that the path forward for AI in marketing must be one of responsible innovation. We need to strike a delicate balance between leveraging the powerful capabilities of AI and upholding ethical standards that protect consumer rights and maintain public trust.

Transparency and Responsible Use

Transparency should be at the forefront of this approach. Companies need to clearly communicate what data they’re collecting and how it’s being used. Privacy policies should be easy to understand, not buried in legal jargon. Customers should have control over their data, including the right to access, correct, and delete it. Robust consent processes and clear opt-out mechanisms for personalised marketing are essential.

Data minimisation is another crucial principle. Companies should only collect data necessary for specific, stated purposes and implement retention policies to delete unnecessary information. This not only respects consumer privacy but also reduces the risk and potential impact of data breaches.

Algorithmic transparency, while challenging to implement fully, should be a goal. Where possible, companies should provide explanations of how their AI systems make decisions. Regular audits of AI systems for bias and fairness are crucial to ensure that personalisation doesn’t turn into discrimination.

Ethical considerations need to be baked into the AI development process from the start, not added as an afterthought. This includes establishing clear ethical guidelines for AI use in marketing and ensuring diverse teams are involved in AI development to mitigate bias.

Don’t Lose the Human

Human oversight remains crucial. While AI can make rapid decisions, human supervision and review processes are necessary to catch errors, address nuanced situations, and ensure alignment with brand values and ethical standards.

Strong data security practices are non-negotiable. As AI systems handle increasingly sensitive customer information, regular updates and testing of security protocols are essential to protect against evolving threats.

Accountability needs to be clear and concrete. Organisations should assign clear responsibility for AI systems and establish processes for addressing AI-related issues or complaints. Regular ethical impact assessments can help companies understand and mitigate the broader societal impacts of their AI systems.

Education is key, both internally and externally. Staff need to be kept updated on AI ethics and best practices, while customers should be educated about how AI is used in marketing. This transparency can help build trust and enable consumers to make informed choices about their engagement with AI-driven marketing.

Collaboration with regulators and industry bodies is essential to develop appropriate guidelines and standards. As the AI landscape evolves rapidly, ongoing dialogue between businesses, policymakers, and consumer advocates is crucial to ensure that regulations keep pace with technological advancements.

The Way Forward

While the challenges are significant, there’s reason for optimism. The conversation around ethical AI is gaining momentum, with more companies recognising that responsible AI practices are not just ethically necessary but also good for business in the long run. Consumers are becoming more aware and demanding of their digital rights, pushing companies towards more transparent and ethical practices.

The future of AI in marketing is not a binary choice between innovation and ethics – it’s about finding ways to pursue both simultaneously. By embracing transparent and responsible AI practices, companies can unlock the full potential of personalised marketing while building and maintaining the trust of their customers.

As we move forward, it’s crucial to remember that the goal of AI in marketing should not just be to sell more effectively, but to create genuine value for consumers. When implemented ethically and responsibly, AI has the potential to create marketing experiences that are not just personalised, but truly personal – experiences that respect individual preferences, protect privacy, and contribute positively to people’s lives.

The path ahead is challenging, but it’s also filled with opportunity. By navigating this path thoughtfully and ethically, we can harness the power of AI to create a future of marketing that is both innovative and responsible, serving the needs of businesses and consumers alike. The journey towards ethical AI in marketing is not just a technological challenge, but a human one – and it’s a journey we must undertake together.

This thought leadership is written by David Ko, Managing Director at Ruder Finn Interactive Asia, the digital arm of Ruder Finn Asia.

MARKETECH APAC is leading the conversation on the future of e-commerce marketing strategies this 2024 and beyond with the E-Commerce Marketing in the Philippines 2024 conference on August 14, 2024 at Crowne Plaza Manila Galleria. Join us and become an integral part of a dynamic community committed to pushing the boundaries of innovation and fostering unparalleled growth in the e-commerce domain.

Data from a recent IAB research recently indicates that around 99% of APAC marketers intend to increase their retail media spend this year and retailers have finally realised they are sitting on an untapped goldmine. 

As customers adopt online shopping as the norm, marketers recognise the need to provide a personalised shopping experience and retailers are increasingly monetising access to ad spending across their websites and in-store activity.

Chemist Warehouse, an Australian pharmacy chain, recently aimed to become one of the largest advertising businesses in the country through sponsored ads on their site and in-store out-of-home screens. For a company whose traditional modus operandi was cost-effective access to pharmaceutical goods, advertising across their network now accounts for 20% of their sales. 

However, accessing retail media networks (RMNs) fluidly and at scale, remains a sticking point for marketers. Unlike advertising across the open internet – which allows a brand to access ad space across news websites, blogs, broadcast video-on-demand and music streaming apps with ease – RMNs often close their ecosystem. This is known as a ‘walled garden’. 

And while the market may become saturated with an infinite number of RMNs, their timing and power have never been more evident. Google’s impending (be it at a snail’s pace) third-party cookie deprecation is providing an added boost for retail media networks – especially as most of their USPs lie not just in their ad space, but also their valuable customer data is available for advertising use. 

Singapore-owned Carousell Group, who have premium online e-commerce space including Carousell, OneShift and Revo Financial, seized the opportunity and launched its own Shopping Ads back in 2022; collaborating with brands to acquire new customers and increase sales. Now with 58 million registered users across Greater Southeast Asia, their value to brands is insurmountable. 

For any marketer navigating this minefield, they need a ‘Swiss army knife’ of solutions.

While there’s value in utilising an RMN’s rich data – nothing is stopping a brand from creating its own goldmine. Even before engaging with an RMN, brands should be collecting and collating their own customer data. This can be as simple as starting a loyalty program, creating a newsletter or email/SMS promotions, or tracking a user’s purchase journey through a site pixel. These strategies arm a brand with information known only to them about their core customer base – allowing the brand to build audience profiles and understand who their core customer is – without solely relying on an RMN to tell them. 

Better yet, the better breeds of RMN will combine their richly sourced and proprietary customer data with a marketer’s brand in a process known as “data clean-rooming”. These data cleanrooms are safe spaces where a RMN and a brand can share anonymized and aggregated shopper data with the brand within a secure environment. Here, both parties can collaborate and supercharge their data and build better customer insights. For example, by understanding patterns and preferences in this combined data will help brands understand their ‘repeat-shoppers’, ‘vertical-based shoppers’, and ‘lapsed shoppers’ between both data sets. 

Combining data in a cleanroom also helps brands understand the missing links in the customer journey. By securely sharing anonymised transaction data, the marketer can attribute specific marketing touchpoints (such as a purchase of their product through a RMN) to build out more accurate return on ad spend, customer loyalty and lifetime value. Combining data with a RMN removes a layer of fogginess that RMN’s walled gardens can, on their own, provide.

Given the walled garden state of RMNs, marketers should also look directly outside the RMN for retail solutions. Marketers should engage with providers that can provide a multi-retail solution that doesn’t require dozens of direct deals with retailers. Off-site media platforms like Criteo’s Retail Media solution have allowed brands – such as online shopping site Welcia.com in Japan – to gain access to valuable audience segments for effective targeting, as well as transparent reporting and closed-loop measurement through their own partnerships with leading retailers. 

In Australia, Circana’s recent partnership with omnichannel media-buying platform The Trade Desk allows brands to measure the incremental impact of their cross-funnel and cross-channel campaigns across multiple retailers at once. 

In a highly fragmented and ever-growing retail market, marketers should not lose sight of traditional media buying to drive brand equity. Focusing on closed-loop solutions and sales helps to understand the return on ad spend, customer journeys, and lifetime value. But as reporting remains unhomogenized across RMNs, and the ability to advertise on an RMN remains tedious, the art of building brand equity through the open internet and traditional media buying channels – as brands have always done – should not be lost.

As marketers learn to strike a healthy balance between traditional brand building and sales-driven activity backed by retail media – retail media networks are opening fascinating and accountable ways to prove the value of a brand’s media investment. It is still, however, developed in a walled garden environment. 

Brands should be selective of which RMN aligns best with their brand, and explore less-tedious multi-retail solutions, all while not losing focus of the traditional media spends that got brands to where they are.

This thought leadership is written by Sebastian Diaz, Head of Media Innovation at Bench Media

MARKETECH APAC is leading the conversation on the future of e-commerce marketing strategies this 2024 and beyond with the E-Commerce Marketing in Malaysia 2024 conference on July 25, 2024 at Sheraton Petaling Jaya and the E-Commerce Marketing in the Philippines 2024 conference on August 14, 2024 at Crowne Plaza Manila Galleria. Join us and become an integral part of a dynamic community committed to pushing the boundaries of innovation and fostering unparalleled growth in the e-commerce domain.