Carousell - finding small business success online
This digital case study looks at how Hong Kong online retailer Carousell found success online - part of our Facebook Curated content series.
What is the specific digital case study that you would like to showcase to the world?
Helping small businesses digitalise and find success online.
What were the specific challenges and what was the scale of the challenge you faced?
Small- and medium-sized enterprises and large retailers alike saw an unprecedented change to the retail industry due to COVID-19, with a major slump in retail traffic and closure of stores. Small businesses were affected the most, where 60% reported in a Hong Kong General Chamber of Commerce survey that turnover dropped by half this year.
Many businesses went digital and were able to lift their revenue, however we noticed that many traditional businesses or small businesses with older owners were struggling to adapt with new technology. Their business models also may not be suited for the larger ecommerce websites or their own standalone ecommerce sites.
What new and innovative approaches did you take?
In April, we launched CarouBiz, a new subscription service during this period to help merchants with a suite of premium seller tools to increase exposure to buyers and further grow their business on during hard economic times Carousell allows merchants to set up online stores for free and listing their items quickly with much ease. And with the seller tools, they can further enhance their stores with curated item collections and video listings, as well as promote their listings for more traffic.
Merchants can focus on promoting their products and services to those who are likely to buy them without worrying about registration and other platform fees. In addition, with 1 in 7 Hong Kongers using Carousell, merchants have access to more engaged users than average footfall to retail malls.
Making things frictionless and convenient as possible for customers was paramount. One tactic involved making delivery as easy as possible – we did this by partnering with local delivery firms like Lalamove, Kerry Logistics and Morning Express.
What was the opportunity?
According to Statistica, user penetration for ecommerce in Hong Kong will be 68.7% in 2020 and is expected to hit 83.8% by 2025. For physical only retail stores this is the best time to go online, as consumers have gotten accustomed to shopping online after more frequent use this year.
So for brands stepping into ecommerce looking to reach audiences online, it helps to have an easy to use platform with a low barrier to entry.
What were the risks?
As more people come online and make online transactions, cybersecurity becomes a big concern and an industry-wide challenge. At Carousell, we have a zero-tolerance policy towards fraud and dishonest acts. Carousell has already been employing technology such as artificial intelligence as its first line of defence in combating fraud at scale. But as our technology evolves, so do the efforts of scammers, and continuously improving and upgrading our technology and early detection capabilities is essential.
Besides using AI for fraud prevention, we also use it to help make buying and selling easier for our users. For example, we have category and price suggestions when our users upload a photo to post a listing, and also chat suggestions.
We also try to emphasize the importance of safety for our users, with online shopping safety tips and guidance on how to report incidents.
What was the scale of desired impact?
We hope to help as many small businesses with only physical stores as possible.
What worked, what didn’t, what did you learn?
There were some merchants who needed extra help with using CarouBiz or developing an online sales strategy. There was demand for both manpower and technical support to assist in merchant onboarding and the education of CarouBiz functions. Weekly webinars were introduced to further merchant knowledge regarding CarouBiz tools and best practices. We have increased headcount to provide additional training and support to support local merchants through live support chats or requests for sales consultants to help with personalised advice.
How have you made use of the Facebook platform or what impact has Facebook had on your digital transformation?
Social media is a tool to reach out to new audiences or remain engaged with our users across different platforms. We have been using Facebook and Instagram since we launched in Hong Kong in 2016, and to date, we have 66,500 followers on Facebook and 36,000 followers on Instagram. We use Facebook to promote CarouBiz through digital ads and content, including sharing a video of one of our CarouBiz webinars.
Our top social media content of 2020 saw an uplift of 418% engagement rate. We also created a set of creatives and made Whatsapp stickers to reach a wider audience base. We have around 20,000 downloads so far.
What were the measurable results?
Merchants have been able to increase visibility and traffic to their store, with one merchant seeing revenue increased by 1.5 times year-on-year in just the first three quarters. 20% of our merchants previously only had physical stores and used Carousell as their first experience on ecommerce.
On average, merchants have also increased sales by three-fold after completing onboarding, and saving $30,000 HKD in advertising fees.
What is your advice to businesses on building the long-term relationship with their customers online?
Empathy for and an emotional understanding of the user are important for building a long-term relationship with your customers online. By combining both data-driven insights and empathy, you will be able to build more nuanced user journeys and brand loyalty. For example, at the start of Covid-19, we pivoted our digital marketing strategy to share more lifestyle, health and selling tips, rather than trying to push for transactions.
Understanding your customers will also help you find new opportunities to value-add their everyday lives. We launched Autos and Property to provide our users a convenient one-stop digital shopfront where they can also find complementary services. This year, we noticed an organic growth in our Services category, and we are working to develop it further in the coming year.
This interview and case study is part our Facebook Curated content series, in partnership with Facebook Greater China. See the case study archive.