top of page

Gain Competitive Edge for Your E-Commerce Business With Data Analytics

Updated: Feb 12, 2020

Gain Competitive Edge for Your E-Commerce Business With Data Analytics


The Electronic Transactions Development Agency or ETDA recently reported that electronic commerce has enjoyed continuous growth at 8 to 10% per year as more consumers are turning to online purchases. Other reasons for this growth includes government’s promotion of national e-payment system for secured online payment as well as the growth in private logistic businesses that provides fast delivery services. All these factors are the bedrock of e-commerce ecosystem that supports its continous growth. However, from 2017 - 2018, the revenue of one of the biggest e-commerce companies such as Shoppee reported increased loss at 193%, while Lazada reported increased loss as high as 365%. The losses are due to heavy spending on marketing in order to acquire new customers on their platform and increase market share.

Traditional marketing of e-commerce businesses

For any e-commerce businesses to achieve success, the number of buyers and sellers on the platform is very important. If buyers continuously return to use the platform, the e-commerce business will be able to earn revenue from advertisements or transaction fees. Similarly, the increase in numbers of sellers or suppliers will bring in various products and services that can help in attracting buyers on the platform. If the platform can achieve this while having good user experience in terms of product search, payment and delivery, buyers will certainly be impressed and are likely to return.

During the past 2-3 years, many e-commerce companies have done intensive marketing initiatives in order to build a strong customer base. Here are some examples of marketing tactics to acquire new customers:

1. Promotion and discount offers discounts or cash back to attract first time customers and special monthly discount to encourage continued use. The e-commerce company, partner or manufacturer will be responsible for these costs. Giving discounts to first time users is a good idea, but companies need to be careful about users who keeps registering for the first time just to get the discount without continued use. On the other hand, giving monthly discount too many times would make customers buy products only when there’s a discount. This is a high cost for companies in the long run and usually the same group of customers are the ones coming back for available discount.

2. Influencers is another tactic used other than using famous people as a brand ambassador or presenter such as Shoppee using Nadech and Yaya or Grab using BNK48. Brands are now using social influencers with followers on Facebook, Instagram, and YouTube. These influencers create interesting content and viral videos for the brand or offer special privileges to the followers. By using these influencers for affiliate marketing, brands can assess the performance of their marketing better than using general presenters.

3.Partnership between organizations allows for the promotion of new cross products and services, and each company can access new customer base and customer data from their new partners. There have been partnerships between e-commerce companies with different banks such as KBank with Grab and Line with SCB. Both parties benefit from the partnership in terms of having more products and services to offer, accessing larger customer base, and the potential to develop future products together.

How big data analytics support the growth of e-commerce sector

Other than marketing tactics mentioned above, e-commerce companies are now analyzing data to support the development of new products and services. With massive amounts of data and the complexity of data sets, big data analytics have the capability to analyze information collected from the digital platform such as customer’s personal information, behaviors in using websites and applications, frequently viewed items, video viewing, and payment information. Based on big data analytics results, marketers can begin to identify customer segmentation according to purchasing history and usage, which can lead to more personalization and product recommendation that can upsell or cross-sell products and in turn increase spending per person. Data analytics results can also be used for digital marketing via Facebook Ads for retargeting or finding other customers with similar profiles as current customers (lookalike).

Unfortunately, e-commerce business’s data is limited since they are collected from their own platform. This means the data is one-dimensional, it only contains usage on the platform and cannot pinpoint to customers’ actual behaviors or interests. Without understanding customers’ profile completely and their needs in real time, data collected from individual platform is not enough to be used as a guide to effective development of new products and services. That is why different companies are combining database from other sources with data collected from their current platform for analysis in order to create products and services that matches customers’ interests as well as for acquiring new customers to the platform.

As mentioned above, creating a partnership is one of the examples of how both organizations can benefit from each other such as a partnership between banks and e-commerce business (KBank with Grab and SCB with Get, Lazada). Once a partnership starts, each organization can share their database and both can benefit from it. First, the e-commerce business will have more convenient online payment feature that helps merchants grow their stores and increase customer loyalty on the platform, a positive outcome for e-commerce business in the long term. On the other hand, bank enjoys new users from e-commerce. Consequently, banks can develop new products such as giving out loans to small retail store owners, restaurant owners, and drivers. Without having new customer database from this sector, banks would not be able to conduct a risk assessment for this group of customers because they don't have enough information.

If we look at the bigger picture, the customer journey from wanting a product to researching about it starts before they even enter our platform. They may have considered their options by researching on Google or looking around other brand’s websites for comparison before they make a decision to enter our platform. Having data about customers’ search behavior, what they compare, and how long it takes them to make decisions before entering our platform will help companies understand customer’s thinking and decision-making process. This complex and in-depth understanding is really helpful for digital marketing in different channels. Since we are living in an age where products are very similar to each other and are offered in different channels, having the ability to reach customers faster and offer the right product at the right time will give a competitive edge to the business.

Once a business understand customer lifestyles and needs at different points of time, targeted marketing or the ability to offer products that customers are interested in at the right time can be achieved. Any advertisements going to the customer will not only create brand awareness and offer promotions to everyone, but it will become more personalized and tailored to the specific customer. This means that the increased accuracy that these data can offer will improve the performance of marketing initiatives and worth the rising cost of investment. Customers will also benefit from targeted marketing since they will no longer be bothered by irrelevant advertisements and can enjoy the online world without unnecessary interruption.

Customer retention can be improved

Furthermore, having other sources of data could help in terms of customer retention. Big data analytics can be the key in forecasting the type of customers most likely to leave or change to competitors’ platform based on abnormal behaviors such as more frequent visits to competitors’ platform or less usage on the companies’ platform. The sooner we can identify these customers, the more time we have in retention by offering special promotions or products that might interest them.

As the business value of e-commerce rises, it creates an intense competition in the industry for gaining market share and growing customer base. Relying on traditional marketing is very expensive and ineffective in the digital age, but big data analytics can provide the crucial data that allows companies to understand and find the right customers more effectively. Having in-depth data about each customers will greatly increased the return on investment of the company, improve their competitiveness in the market, and become a big player in the e-commerce industry in the long term.



bottom of page