Effect on Daily Sales Revenue for B2C Companies in Thailand

Coronavirus (COVID-19) is officially a global pandemic.

And nobody knows what is happening next.

Most of us will most likely survive the coronavirus.

But what about our economy?

Will our businesses and our formerly stable jobs and careers also survive? Are we having a crisis – similar to 9/11 – and in a few months everything is back to normal?

Are we entering a recession, similar to what happened in 2008? A time during which millions of people will lose their jobs, as most companies will lay off employees to survive while many companies will still go out of business at the end of the day?

Or even worse?

Bangkok posts predict that yet alone 5000-7500 restaurants in Thailand will go out of business.

I have no answer to all of these interesting, scary and ultimately exciting questions, hence I will focus on what we know and can see right now. I hope that it will help all of us to better understand the situation.

What we as agency know is the sales revenue of many small to midsize companies here in Thailand.

That’s the great part about being a performance marketing agency: You have to deeply understand the performance of the businesses of your clients. We don’t always know their ultimate performance (profits), as we don’t know their expenses. But we almost always know their sales revenue.

That’s logical because clients hire performance marketing agencies like us to be responsible to increase their sales revenue.


Disclaimer:

  • We have aggregated and anonymized the data to protect our clients’ sensitive information.
    We are looking at the Return on Ad Spend (=ROAS). ROAS is the sales revenue from our marketing efforts divided by the ad spend used to generate it.
  • There is nothing like an “ideal return on ad spend” and the ROAS is different from every business. The lower a ROAS a business can afford to have, the more competitive it usually is. And then it is the job of marketing to maximize the ROAS.
  • Most companies aim for a ROAS that both maximizes profits AND new customers (which will lead to repetitive sales via the upsells and long-term customer value) in good times. In bad times, lowering the ROAS targets will lower the profit. So far it seems to allow many businesses to remain profitable or at least breakeven (or in the worst case reduce the losses of running overheads which seems better than firing valuable team members).
  • We don’t claim this data to be complete or to even be representative of these industries. The numbers shown below are heavily influenced by the strength of each business and its marketing and sales strategy.

In the following overview, we take multiple businesses in the same industry, look at their performance (measured by the return on ad spend) in the last 14 days and then calculate the individual increase/decrease in percentage for the last 3 and 7 days against the last 14 days. Shown below are the averages of the accumulated increase/decrease in percentage for the last 3 and 7 days for all companies combined.

The timeframes shown below are as follows:

Last 14 Days (2-15 Mar)

Last 7 Days (9-15 Mar)

Last 3 Days (13-15 Mar)

 

  • Overview of ROAS Performance of all Industries

 

 

That’s really surprising: Looking at the majority of our clients and taking the average return on ad spend businesses actually saw an 8.79% increase in return on ad spend compared to the last 14 days.

We didn’t expect this to happen and this data is also flawed: The majority of businesses are making significantly less money in the last few months, with a few outliners who had very strong days. 

The only thing that we can really learn from the data is that:

a) it is still possible to sell online

b) it heavily depends on the industry, business, offer, and strategy

 

  • By Industries:

 

 

Fashion and Fitness is mostly eCommerce and Social Commerce. The Cost per Messages is stable and is not increasing as traffic seems to get rather cheaper than expensive, but conversion rates to convert messages to sales are lower than usual. 

 

 

Very similar to Fashion and Fitness.

 

 

What we can see for supplements is that it depends heavily on the purpose of supplements.

 

 

This is the most surprising, as restaurants are obviously suffering a lot these days. Restaurant visits are down a lot, but with smart and strong promotions, owners still manage to get traffic. Food delivery seems to do better than ever.

 

 

Especially for rather expensive household items, there doesn’t seem to be any negative impact yet.

 

 

B2C leads involve everything from car loans, wedding bookings, beauty clinics, wellness retreats and more. Withing these sub-groups there are huge differences. In general, leads are still cheap and we would expect them to become rather cheaper over the next few weeks and months, but conversion rates are decreasing significantly. It seems that people spend more time online and are more open to reaching out for inquires, but not in the mood for bigger purchases. That’s a huge opportunity for many companies, as advertising costs are rather expected to decline.

 

 

This is the biggest surprise and an obvious reason why we need to study the data with a huge salt of skepticism. It just shows, how depending the performance is on the individual businesses. Hotels have been struggling for months and overall it’s probably as bad as it has been for years for the industries. Hotels have shut down, yet 3 hotels combined have more than doubled online sales numbers during the  Thai Teaw Thai (the yearly period in which hotels push hotel bookings towards Thai people) compared to the year before (which was believed to be a record in their area). Not only did they set new standards, but they also saw the biggest spikes in revenue over the last 3 days, where the mass consumer panic felt to be the biggest.

What do we learn from all of this?

  1. People are still buying and spending money online
  2. It is much harder though for the big majority of businesses. Doing the same thing that worked averagely in the past, will most likely result in poor performance and won’t be enough nowadays
  3. The offer is more important than ever. Businesses willing to experiment with promotions (and sacrifice profit margins along the way) can still do very well and see it even as an opportunity to gain more market share. In the worst case and in many cases, it can still be better to keep the operation busy with lower profit margins, than having to lay off of people of having to shut down
  4. A lot of your results today depend on your investments in the past. The few businesses that are still striving these days and pushing the average numbers up are those that have been investing heavily in digital marketing for a long period of time

We might be updating the numbers on a weekly basis. Additionally, we are currently working on more information on how to adjust your marketing strategy and how to set up marketing teams to drive more sales in order to stay alive during the upcoming months. Send me an E-Mail to [email protected] if you want to receive updates to your inbox.

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