Amazon or Alibaba? Make it both

Brands looking to succeed in Asia’s fertile ecommerce landscape need to test and learn now across the leading platforms while the market is still growing, said Lucy McCabe, president of OgilvyRED Asia-Pacific.

With Amazon’s arrival into Singapore last year, McCabe says brands are too focused on the battle between the US company and its rival Alibaba, which is counterproductive for those that wish to grow their ecommerce presence.

“When I’m asked ‘is Amazon going to win or is Alibaba’, I think actually there are two different types of behaviours they are catering to,” she told Campaign Asia-Pacific. “Amazon are great at the data-driven experience, making it exactly right for me. They’re also interested in different areas like content. Alibaba is much more a social interaction play, just look at their Brand Day activations.”

Lucy McCabe

Picking between them as a brand, McCabe said, is the wrong way to look at it.

“Brands shouldn’t necessarily see this as a choice. It’s not like a brand would have to choose between which supermarkets to be in; you need to be in all of them. You need to sell where consumers are shopping.”

McCabe was speaking following an Ogilvy event highlighting the potential of ecommerce in sectors that are yet to really embrace it, such as FMCG. She said she understood the current reluctance to invest but there are solutions that are lower risk than others.

Source: Ogilvy

“Where it’s still a small percentage of sales, it’s a real challenge for brand teams to justify the resources to really get into this,” she explained. “But that’s where marketplace platforms [like Tmall and Lazada] can work. It’s really low cost of entry, you don’t have to invest in setting up your own ecommerce platform, and you can have control of your brand in that environment.”

As for Ogilvy, McCabe said the agency can help mitigate the risk further for brands with its e-partner services solution, because it is offering the service “partly on a commission-on-sales based model”.

“We are partly paid based on what we sell, so we’ve got skin in the game with you,” she said. "We recognise this is early days [for your brand in ecommerce], so we’re also accepting some of the risk, which is pretty unique in the market.”

But the potential of ecommerce in Asia is plain for all to see, and as always, first-mover advantage could mean real success, she added.

“If you exceed your offline market share in online, over the next three to five years that will be growing your overall market share as the channel becomes more significant,” she said.