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Sephora, DFS embrace e-commerce in Asia

News, 13 April 2016

SINGAPORE: Cosmetics giant Sephora and travel retailer DFS have successfully pivoted toward digital as e-commerce takes off across Asia.

China, Japan, South Korea, India and Australia are predicted to collectively generate $1.4 trillion in online revenue by 2020, and brands traditionally focused on bricks-and-mortar retail are quickly moving into the online space to capitalize.

For Sephora, which built its South East Asian e-commerce offerings with the strategic acquisition of regional player Luxola, building its online brand in the region has added strength to its overall business growth in South East Asia.

Speaking at the eTail Asia conference in Singapore, Ronan Hurley, chief operating officer at Sephora Digital, stressed that the strength of the global brand name has been crucial to building credibility in Asia, where fake products abound online. (For more, read Warc's report: Ten ways Sephora and DFS use e-commerce in Asia.)

Instant recognisability lends trust, he said. "We have rebranded in the last few months and we can see the brand name Sephora has a history… the brand itself uplifts the business hugely."

He recommended that retailers with strong name recognition should put their brand front and centre in e-commerce offerings so customers know they can rely on products bought online.

Betty Lam, vice president of e-travel retail at DFS Group, revealed that the business has taken an online-to-offline approach to e-commerce.

"We don't deliver to homes," she explained. Instead customers buy and pay online, then pick up the items at DFS airport duty-free stores. The strategy has grown DFS' customer base, but has not required a major adjustment in their existing business model.

Both brands have adopted search and social media strategies, and discovered that social media is a huge driver of online sales across the region, particularly with millennial shoppers. Social content optimization is a major source of new customer acquisition for both brands.

Data sourced from Warc