E-COMMERCE EAT PRAY SHOP: RAMADAN CASE STUDY. acommerce Insights Indonesia

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1 acommerce Insights Indonesia EAT PRAY SHOP: E-COMMERCE RAMADAN CASE STUDY Published July Corporate Marketing: Felicia Moursalien

2 2 Does Ramadan Boost E-Commerce in Indonesia? This is the question acommerce sought to answer this Ramadan With over 200 million Indonesians concluding the holy month of Ramadan with Eid celebrations on Monday, July 28, acommerce released a case study that analyzed the e-commerce data of five clients during Ramadan in Indonesia. We were interested in the implications of how 88% of the Indonesian population eliminating food and water from their daily life for religious reasons, 66.8 million of whom are online, would affect consumer behavior in e-commerce. Would consumerism decline during this holy month, or simply shift? Would the type of goods being purchased change? Are people spending more or less? Our sample set includes five diverse clients in both size and category such as beauty, Muslim wear, general (department store), sports and fashion. Given the range of e-commerce development of these various clients this case study is intended to provide a snapshot of consumer behavior and may not be indicative of the whole Indonesian e-commerce market at large. The data analyzes a data the period two weeks prior to Ramadan, June 7-20, and two weeks during Ramadan, June 28-July 11, and looked at the following data points: Peak shopping hours: When were Indonesians shopping online? Strongest performing shopping categories: What were they buying? Average basket size: How much was being spent? Below is a summary of our key learnings. Traffic stayed constant, but shifted earlier Overall traffic saw a marginal increase of 3% of visitors shopping during Ramadan, but the most important take away was that there was a major shift as to when they were shopping. This stems from the fact that the day starts and ends earlier. Instead of going to the office at 9am Indonesians start the day at 8am and leave around 5pm. See Figure 1. However, for clients with Ramadan targeted or conscious campaigns and products such as Muslim wear and Sports, these categories saw spikes in traffic of 29% and 18% respectively.

3 3 Indonesians eat, pray, shop shop shop 152% increase in traffic at 4am in all categories except fashion. Instead of waking up, praying, eating and then returning to bed, Indonesians are increasingly using the time to browse online. See Figure 2. There was a 400% increase in traffic at 4am and a 7x increase in orders for our Muslim wear category. But these gains are not only seen for religious related retail. Sports saw a 189% increase in traffic and 26% uptake in sales at 4am. Lunch time browsing boosted during Ramadan with 12% more than normal at 11am, suggesting Indonesian Muslims are turning to e-commerce and retail consumption instead of going to lunch. See Figure 1. 6pm is the lowest time for e-commerce as people head home, but during Ramadan that drop off was even steeper with a 19% decrease. During Ramadan Indonesians are leaving work earlier and gathering with friends and family to break the day long fast at 6:30pm. See Figure 1. The majority of shopping still takes place between 11am-2pm, but evening shopping hours were being shifted to early morning. See Figure 1. Religious related retail rules Muslim wear category saw its sales skyrocket during Ramadan. The night long dinners, socializing with families and people returning home out of the city capital means that the demand for traditional and conservative clothing ran strong. There was a 96% increase in transactions of Muslim wear and 84% increase in revenue after Ramadan started. And shoes. The majority of the sales in Sports rose in the shoes category. Provocative sells, but not during Ramadan Contrast this with modern female fashion, which saw a sharp decline in orders per day, suggesting that while Indonesia is a progressive Muslim nation, marketing provocative fashion during Ramadan needs to be done with care. We saw that the CTR for Ramadhan themed fashion (not necessarily including a hijab) but with long sleeves and little skin exposure performed stronger during this month. Indonesians find it distasteful to see bare legs and bikinis during Ramadan, Indonesian CEO Hadi Wenas said. A tisket, a tasket, a big sporty basket Ramadan is not like Christmas where gift giving is the norm. Nonetheless average basket sizes saw significant increases. People were buying in much bigger quantities. For example, our sports category saw average basket size increase by 67%. The more decadent spending is explained by the fact that prior to the start of Ramadan, working Indonesians have a major influx of disposable income as they receive their bonus for the year. The median basket size was around 120,000 IDR or 10.3 USD.

4 VISITS VISITS 4 Peak Browsing Hours Before and During Ramadan in Indonesia (Fig.1) TIME Prior During Source: acommerce Indonesia Data, July 2014 Average Visits at 4 am Before and During Ramadan in Indonesia (Fig. 2) Beauty Muslim Wear General Sports Fashion CLIENT CATEGORY Prior During Source: acommerce Indonesia Data, July 2014

5 5 4 Strategic Recommendations for Ramadan E-Commerce 1. Shift marketing to 3am Boost SEM, online marketing and promotional offers to between 3am-6am. Indonesian Muslims are waking up and staying up and they are shopping online as Figure 1 shows. Save money from marketing spend (online or offline) during the traditional prime time of 6pm-8pm. Prime time has shifted to the morning as families are eating together and going out in the evening. Do not miss the opportunity to capture the new age Indonesian customer. 2. Remove provocative images from homepage That doesn t mean you have to change your whole product to be religiously targeted or nonsecular but use this month to feature more conservatively dressed models, long sleeves, no cleavage or bare chests, longer skirts etc. Or else risk facing major bounce rates (if you receive traffic at all). As a time for family and religious sacrifice, Indonesians find provocative imagery especially distasteful during Ramadan. 3. Rethink your bestsellers For non-muslim wear categories rethink your bestsellers and home product page to reflect Indonesian values and culture. What sold best last month will not necessarily work during Ramadan. The strength of Muslim wear and sports sales act as a benchmark for success. Consider products and marketing that focus on family, community, their upcoming vacation time, etc. 4. Feature affordable items Conclusion Sites that did not feature lower priced items suffered a hit in conversions. Indonesians are price conscious year round and even if they are playing with a spike in disposable income from their bonus, thriftiness is a major factor in consumption behavior as we saw with our brands. Be aware of mixing up high priced items on the homepage with bringing the lower priced items to the forefront as well. This is a great time of year to flush out some of that inventory. E-commerce during Ramadan has the potential to be explosive as seen with the amazing shift in behavior as Indonesians woke up and immediately hit the internet for online shopping. Whether those potential shoppers are captured or not depend fully on strategic timing of marketing and a consciousness of traditional values integrated into product choices and campaigns.

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