Logitech, the globally renowned brand in computer peripherals originated from Switzerland, has been actively expanding its presence in Taiwan, extending beyond its IT-centric image and delving into the realm of everyday life. In May 2023, Logitech took a further step by establishing the world’s first Logitech for Business Showroom in Taiwan, with the objective of providing enhanced office experiences to a broader range of businesses. This strategic move represents a significant elevation of Logitech’s brand influence. In this interview, Vince Huang, General Manager of HH Galaxy, engages Aries Sze, Country Manager HK & TW of Logitech, to gain deeper insights into Logitech’s brand management strategies in Taiwan.

Vince: “Aries, you mentioned that you hypothetically fire yourself every year. I’m curious, what’s the mindset behind this practice?”

Aries: “This concept was proposed by our global CEO, Bracken Darrell, and I think it’s great. Logitech has experienced rapid growth in the past decade, and our business, sales channels, and products have evolved significantly. By embracing the mindset of starting fresh each year, as if we were new hires, and contemplating how we would tackle challenges, we are able to uncover the captivating and remarkable aspects of Logitech, rather than magnifying shortcomings within the organization. This annual reset enables me to pinpoint areas for personal growth and ongoing improvement.”

Vince: “That’s an excellent concept. Will Logitech incorporate this concept into internal communication and employee management?”

Aries: “Absolutely. We incorporate this mindset into our internal leadership discussions, ensuring that employees understand the value of embracing this approach when facing challenges and seeking opportunities for growth. Effective communication becomes crucial as the business experiences rapid expansion. Business growth is closely tied to personal growth; without individual development, it becomes challenging for the business to thrive. Personally, I always look ahead and assess whether the organization’s growth trajectory aligns with the industry development direction for the next 5-10 years. It’s vital to determine if both my team and I are adequately prepared for what lies ahead.”

Vince: “It sounds very similar to one of the core values of HH Galaxy, the Growth Mindset. I would like to know how you propagate this concept among the entry-level employees.”

Aries: “I believe that having ownership is crucial in fostering a Growth Mindset. Without shouldering responsibility, it’s challenging to develop such a mindset. When team members have well-defined roles and responsibilities, they can identify areas for growth, and it enables us to support their development. Accountability serves as a powerful motivator. Our approach is to empower individuals by granting them authority and responsibility, as it is through this framework that a Growth Mindset can truly flourish.

Logitech’s work culture sets it apart from conventional foreign companies, as we prioritize more than just execution. Over the past decade, we have fostered an environment of internal entrepreneurship, enabling each country to redefine its unique identity within the parameters of our brand image. This may involve localized development, sharing successful case studies, and subsequently applying them to other global regions, creating a dynamic exchange of ideas and strategies.”

Vince: “I rarely see such examples in large global organizations. It resembles more of a tech or startup company.”

Aries: “Exactly. For example, in the past few years, we focused our resources on esports in Taiwan and Hong Kong, while allocating fewer resources to office supplies. This wouldn’t be possible in other companies due to the different business units. However, Logitech trusts the expertise of local managers. As long as it fits within a balanced P&L scope, we’re willing to try new things. Our expansion of stores in Taiwan, collaboration with esports associations in Hong Kong, and the establishment of the Logitech for Business Showroom in Taiwan are all examples of our ventures. This is why I fear boredom, but I can happily work at Logitech for ten years! While our sales used to rely on physical channels, we’ve now embraced a dual focus on retail and e-commerce. Looking ahead, we aim to become an integrated hardware and software service provider, collaborating with more businesses and channel partners.”

Vince: “I can personally relate to that. HH Galaxy serves many international brand clients, but our partnership with Logitech is different. It’s not just a simple client-vendor relationship; it feels more like a true partnership. We collaborate on how to do together, evaluate each other’s capabilities and resources, and tackle market challenges as a team. I’ve learned a lot from this kind of collaboration.”

Aries: “Logitech doesn’t encourage unethical means to achieve business goals. We believe in collaboration and equality. When I first entered the market, I noticed that our approach was often too submissive, as if we were begging retailers to place orders. But it shouldn’t be that way. We should think about how to help our channels improve their performance through initiatives like advertising, new product launches, and integrating online and offline experiences. These efforts help us establish mutually beneficial relationships with our retail partners. Despite having a market share of over 70% in the computer peripherals market, Logitech doesn’t let that go to our heads. We continue to approach our partners with equality and fairness.”

Vince: “Another example that showcases Logitech’s strong Growth Mindset DNA is its recent shift from a consumer focus to the enterprise market, which has resulted in significant breakthroughs. How did you identify this business opportunity?”

Aries: “Actually, even before the pandemic, Logitech had already started incorporating video conferencing features into its products. The company recognized the potential of the B2B market, but it was during the pandemic that the opportunity truly exploded.In the past, our focus was primarily on the B2C market, and the idea of targeting the B2B market was not actively pursued.

However, as I delved deeper into the dynamics of the market, I realized that the issue lay not with the market itself, but with our own perspective. Coming from a consumer-oriented background, I took it upon myself to study and build a strong B2B business model. I discovered that Taiwan and Hong Kong alone have over two million small and medium-sized enterprises. If we could successfully cater to their business conferencing needs, the revenue potential would be significant.

Finding the right balance between the C and B markets is a crucial responsibility for business leaders. By capturing opportunities in both segments, we can achieve a more robust and sustainable operational structure.”

Vince: “Let’s discuss Logitech’s approach to e-commerce, which I find to be quite innovative. What role does e-commerce play in the overall strategy?”

Aries: “We may not be leading the pack, but we are eager to learn and experiment. We’ve gained many insights from collaborating with HH Galaxy, and it has been a mutually beneficial partnership.

Logitech’s products demand a hands-on experience for consumers to truly appreciate them. The distinction between a mouse priced at NTD 199 and another at NTD 3,999 lies in the tangible touch and feel.

Initially, our e-commerce approach was focused on price competition, and we faced objections from our channel partners. However, one of our salespeople noticed that when we offered online promotions for Product A, offline inquiries for the same product also increased. This led me to realize that our online and offline product strategies should align, as consumers were often left confused by the disparity. So, we made the decision to synchronize our online and offline strategies, resulting in an immediate improvement in offline conversion rates. We also recognized that e-commerce is not just a sales channel but an avenue for creating awareness, exposure, and activation. The integration of online and offline is the best approach for our brand, consumers, and channel partners in this market.”

Vince: “It seems like Logitech is strategically focusing on the entire consumer shopping journey. Is that correct?”

Aries: “Yes, indeed. In Hong Kong, we offer a unique online purchasing experience combined with offline pickup services, which has contributed to 20% of our online revenue. Moreover, we have taken steps to make the Logitech brand more relatable to consumers’ daily lives. We have established our presence in department stores and outlets, where our focus is not solely on communicating product specifications and prices, but rather on conveying the concepts of a high-quality lifestyle, environmental sustainability, and promoting health-conscious office supplies. This strategic shift has resulted in an increase in average customer spending.

We strongly believe that online and offline channels should not be seen as competing entities, but rather as mutually reinforcing components. Each channel offers unique advantages. Offline channels provide customers with a tactile and immersive experience, while online channels enable us to create multiple touchpoints and engage with a wider audience. Building on this perspective, we have transformed our physical stores, moving away from a cluttered display of products to creating experiential environments. As a result, our retail channels have seen a remarkable 30% increase in average customer spending. This approach was initially met with skepticism from channels, but as Logitech successfully implemented it, other brands have started to adopt similar strategies. We are thrilled with this development because our goal is to grow together with our channel partners.

In my opinion, the true growth of the Logitech brand doesn’t come from snatching market share from competitors; it comes from collaborating with our channel partners to create greater value for consumers and enterprise customers.”

HH Galaxy, Taiwan’s e-commerce service provider, leverages its fully integrated data-driven warehousing and logistics management system. With rapid picking and shipping to end consumers, HH Galaxy reduces customer acquisition costs and enhances overall profitability. It has become the top choice for over 100 domestic and international brands and it has established long-term partnerships with renowned brands such as Kao, Johnson & Johnson, Lion Corporation, New Balance, and PANDORA.

HH Galaxy’s All-Inclusive Warehouse and Logistics Solutions

Both Kao and Kenvue visited HH Galaxy’s XinFeng Logistics Park in the first half of this year. Led by General Manager Hasegawa from Kao, the delegations had the opportunity to personally experience the diversified automated warehousing and efficient sorting systems, with HH Galaxy’s General Manager Vince Huang personally leading the team and providing reception.

The visit in mid-April aimed to understand how HH Galaxy integrates information, maintains data security, and provides real-time customer service to help Kao meet the requirements of Costco e-commerce. General Manager Hasegawa was particularly impressed by HH Galaxy’s investment in AMR picking system equipment.

?ESG Collaboration for a Better Future

Kenvue, formerly a subsidiary of Johnson & Johnson, recently became an independent company and went public in 2023. With a portfolio including Neutrogena, Listerine, and Johnson’s Baby Powder, Kenvue’s General Manager, Doris, led a management team to visit the XinFeng Logistics Park in June. With the increasing importance of ESG (Environmental, Social, and Governance), Kenvue’s visit focused on exploring various possibilities for ESG collaboration.

During the visit, HH Galaxy’s General Manager Vince, introduced the company’s ESG philosophy and initiatives such as reducing packaging waste, optimizing material usage through system calculations, implementing paperless operations, and enhancing cybersecurity through cloud computing. The Kenvue team actively participated in the 2C picking operations during the warehouse tour, gaining a deep understanding of HH Galaxy’s warehouse capabilities. Doris expressed that ESG is a crucial mission for Kenvue, which aligns with HH Galaxy’s values. She looks forward to future collaborations to integrate ESG principles into their business.

HH Galaxy and SJ Conso Inc., with extensive 7-year local expertise, join forces to establish HH Galaxy Philippines. With a focus on international brand product sales, HH Galaxy Philippines aims to capitalize on the booming post-pandemic e-commerce market in the Philippines and expand into the Southeast Asian market.

Seizing the opportunity in the post-pandemic era, the global e-commerce market is poised for growth, and HH Galaxy sets its sights on the Philippines. With plans to establish HH Galaxy Philippines in the second half of 2023, the company will leverage the 7-year local expertise of its partner, SJ Conso Inc. By adopting a localized business approach, HH Galaxy Philippines aims to introduce international brands into the Philippine market. Jimmy Yeh, General Manager of HH Galaxy Philippines and head of SJ Conso Inc., emphasizes their commitment to hiring local talents, as they serve as the vital link between the company and the local market, enabling them to quickly grasp market trends.

Unleashing the Power of the Philippine E-commerce Sector

Expanding into the international market is a crucial strategic move for businesses to broaden their market reach. “But first, we need to ask ourselves, why the Philippines?” Jimmy expressed. Before venturing into the Philippine market, HH Galaxy had already conducted extensive market research, comparing the current state of various Southeast Asian countries. They comprehensively analyzed population dividends, smartphone penetration rates, internet usage, e-commerce market trends, and potential. Among these countries, the Philippines emerged as an unmissable new frontier.

First and foremost, with a population of over 100 million people, the Philippines ranks second only to Indonesia in Southeast Asia. The average age is approximately 26, indicating a predominantly youthful population that drives a substantial domestic consumption market. Furthermore, Filipinos generally exhibit a high level of receptiveness to new innovations. “This aligns perfectly with HH Galaxy’s goal and strategy of introducing international brands to the Philippines,” Jimmy emphasized.

Furthermore, the internet penetration rate in the Philippines is high, with nearly 80% of the population having internet usage habits. The number of smartphone users is also substantial, reaching approximately 90 million. According to statistics from 2022, on average, each person owns about 1.72 smartphones. Jimmy explained, “Having two smartphones and two SIM cards per person is quite normal due to the affordability of intra-network calls.”

In other words, shopping through smartphones on the internet is convenient and easy, and the e-commerce market in the Philippines has been growing year by year. According to a market analysis report published by eMarketer, the e-commerce market in the Philippines generated sales of $28.5 billion in 2022, showing a growth of approximately 30-40% compared to 2021. It is estimated that the market will continue to grow by at least 30% in the whole year of 2023. Therefore, the potential of the e-commerce market in the Philippines should not be underestimated.

Moreover, from a channel perspective, the two major e-commerce platforms in the Philippines are Shopee and Lazada. Jimmy observed through website traffic data from SimilarWeb that currently, Shopee and Lazada account for approximately 80% of the total visits to all e-commerce platforms, with both platforms having an equal share. “In the future, HH Galaxy plans to list our products on both platforms, which would allow us to reach about 90% of consumers. This will significantly boost our market presence,” Jimmy explained.

“We insist on hiring local people because they are our closest connection to the local market, enabling us to quickly grasp market trends.”

– Jimmy Yeh, General Manager of HH Galaxy Philippines

The Swift Growth of E-commerce Platforms

The e-commerce market in the Philippines has experienced rapid growth in recent years and has made significant progress. “Seven years ago, it would take two weeks for a purchased television to arrive, while Taiwan’s PChome was already challenging with 24-hour delivery. It was really unfamiliar,” recalled Jimmy. However, now, in the Greater Manila area, delivery takes only three days. “The global pandemic has catalyzed the development of e-commerce in the Philippines. When online shopping became the only sales channel, platforms had to find ways to increase their logistics capacity to cope with the surge in orders during the pandemic.”

Despite entering the post-pandemic era, e-commerce sales have not returned to their original state but have gradually grown in line with the habits of Filipino consumers. “This is a significant opportunity, but it still requires effort to seize,” said Jimmy. It is not only important to be familiar with local consumer preferences and introduce products that meet market demand but also crucial to address payment and logistics aspects. “Because the key to the e-commerce market lies in both payment and logistics. Both are indispensable.”

Although Shopee and Lazada have the highest website traffic among e-commerce platforms in the Philippines, the overall market remains highly competitive, with many other platforms eyeing their positions. Jimmy observed and analyzed, “It is precisely because of this competition that e-commerce platforms are putting more effort into solving payment and logistics issues, making payment more secure and convenient, and improving the speed and convenience of logistics.”

Perfect timing for HH Galaxy to enter the Philippine market

“Now is the perfect time for HH Galaxy to enter the Philippine market!” Jimmy emphasized that the e-commerce platforms in the Philippines have gradually improved their logistics and payment systems, and consumers have become accustomed to using online channels. Therefore, HH Galaxy can leverage its advantages in the Taiwanese e-commerce market and its understanding of brand requirements to gradually introduce international brands into the Philippine market through online channels.

In addition, HH Galaxy Philippines can benefit from the mature software technology, operational experience and logistics of HH Galaxy in Taiwan, combined with the 7-year experience of SJ Conso Inc. in the Philippines. This will provide HH Galaxy Philippines with a solid foundation in e-commerce operations from the beginning. Jimmy stated, “HH Galaxy focuses on selling products and bridging the last mile between brands and consumers. With our sales capabilities, we will establish a strong presence in the Philippines.”

HH Galaxy Philippines is currently poised for launch and is expected to be officially established in the second half of this year. Jimmy has set a goal: “The international brand sales market in the Philippines is currently in a state of intense competition, with no single company dominating the majority of the market. Therefore, HH Galaxy has unlimited potential in the Philippines, and our goal is to secure the leading position in selling international brand products.”

“When it comes to e-commerce operations, it’s not just about ‘agency outsourcing’ or ‘brand self-operation’!” In recent years, HH Galaxy has introduced the PowerSolution series of tools, offering brand owners a more diverse range of options for e-commerce operations. These tools not only help brands generate revenue but also assist in reducing manpower and improving operational efficiency. How do they achieve this?

Understanding user pain points and offering suitable solutions is the key to success for every company. To achieve this, companies often invest heavily in market research and user interviews. Every company strives to understand what users truly want, putting in maximum effort and exploring various methods. However, HH Galaxy’s unique position in the e-commerce industry allows it to be both a user and a developer of e-commerce tools.

Rising Cost of Traffic: Shifting Focus from Revenue to Data

“We are the Experts in Sales, Data, and Tools!” by Ethan Shaw, Vice President of Operations at HH Galaxy

Established by the largest brand agency in Taiwan, THL (Taiwan HsinLin Enterprises), and HCT Logistics, HH Galaxy is capable of providing services for brands looking to sell through various channels such as official websites, momo, PChome, and Shopee. From product listing and advertising to final product delivery, HH Galaxy covers the entire process.

Since 2013, HH Galaxy has accumulated a portfolio of hundreds of domestic and international brand clients, including New Balance, PANDORA, L’Oréal, Kao, and Johnson & Johnson etc.

Three years ago, HH Galaxy entered the SaaS market, starting with advertising tools and gradually expanding its services to include customer data analysis. The latest addition to its offerings is the newly launched order and warehouse management system called PowerOrder.

Ethan Shaw pointed out that in the past, e-commerce was just one of the many channels for brand owners, and many of them chose to outsource their e-commerce operations to e-commerce service providers. However, in recent years, brands have started to view e-commerce as a crucial channel for collecting consumer data and understanding the market.

This has put many brand owners who previously relied on e-commerce service providers in a dilemma: should they continue to prioritize efficiency and maintain their collaboration with e-commerce service providers, or should they invest significant resources in reclaiming their e-commerce operations to gain access to customer data?

However, from HH Galaxy’s perspective, it’s not a binary choice. Ethan said that the PowerSolution tools were developed to allow brand owners not only to continue entrusting their operations to HH Galaxy but also to leverage the data collected through these systems to provide more customer insights to the brand owners.

For HH Galaxy, entering the SaaS market not only helps its brand clients gain more data and improve their performance but also allows HH Galaxy to expand its customer base from large enterprises to small and medium-sized enterprises, bringing a new wave of growth to its operations.

Data Analysis with Precision Advertising, PowerSolution Boosts ROI up to 50%”

“The PowerSolution tools were developed to allow us to leverage the data collected through systems to provide more customer insights to the brands.” by Ethan Shaw

HH Galaxy’s SaaS e-commerce operation tool, PowerSolution, currently includes the following product offerings: PowerCDP for customer data analysis, PowerAI for advertising placement, and PowerOrder for orders management.?

Firstly, let’s talk about PowerCDP. As the pandemic-driven e-commerce boom gradually subsides, many e-commerce brands are facing slower growth and increased sales and acquisition costs due to inflation. Therefore, leveraging the accumulated customer data from previous years for precise marketing has become a major focus for brand owners.

That’s why HH Galaxy’s PowerCDP tool not only includes a self-developed customer data platform specifically for Shopee, but also actively collaborates with AI consultancy data platform company beBit to provide cross-platform data integration, automated customer segmentation, and marketing campaign automation features.

Ethan pointed out that through actual testing, the use of PowerCDP to analyze customer data combined with PowerAI resulted in an average increase in advertising return on investment of two to three times, and sometimes even up to five times higher compared to before.

He provided an example where it was commonly believed that customers who purchased clearance or short-lived products were unlikely to become repeat customers, and brand owners were concerned that the popularity of such products would affect the prices of regular products. However, HH Galaxy’s data analysis revealed that customers who purchased short-lived products not only had a high probability of becoming repeat customers but also had a higher average customer lifetime value than typical customers.

This discovery led HH Galaxy to encourage brand owners to promote short-lived products more boldly, attract new customers, and develop new combinations of short-lived products with regular products to increase the average order value. Recently, this approach generated nearly $300,000 additional revenue for a brand in just one sales period.

Another showcase involves a diaper brand. In the past, the brand believed that customers who purchased size S diapers would naturally purchasing size M or L diapers as their children grew, so the advertising focus was on converting customers to buy larger sizes. However, data indicated that as much as 80% of diaper customers were one-time purchasers. This led HH Galaxy to shift their advertising target towards increasing the average order value instead of converting customers to larger-sized products.

Ethan revealed that an international beauty brand has deeply collaborated with HH Galaxy, relying on data interpretation of customer shopping journeys to adjust product sales combinations and pricing strategies.

In terms of advertising, HH Galaxy not only utilizes common advertising platforms such as Google and Facebook but also plans to collaborate with cloud-based invoice and music streaming platforms. This diversifies the types of advertisements and expands the audience reach, ensuring that advertising costs are not completely controlled by major platforms.

From Operations to Tool Development

“We started as a business operator, so we transform the pain points we encounter at work into tools that we provide to our customers, making our services increasingly comprehensive.” by Ethan Shaw

There are similar e-commerce tools available on the market, so why choose HH Galaxy?

Firstly, their solutions are highly practical. “We started as a business operator, which sets us apart from other SaaS service providers,” explained Ethan. These tools are not only sold to customers but also used daily by HH Galaxy’s own operational teams. “We transform the pain points we encounter at work into tools that we provide to our customers, making our services increasingly comprehensive.”

The second major advantage of HH Galaxy is comprehensive data. In the past, data of customer behavior, e-commerce advertising and sales performance were scattered across different systems, making it difficult to compare them simultaneously. However, with HH Galaxy’s PowerSolution, real-time advertising ROI, sales performance, and customer behavior data are integrated and directly compared on the same platform, helping brands improve the efficiency and accuracy of their advertising strategies.

Many different tools are available, what truly sets a brand apart is understanding customers, mastering operational processes, and implementing precise sales strategies. All of these aspects come from accumulated experience and continuous optimization, which is the core value of HH Galaxy.

“In the past, it may have been a binary choice between self-operation and outsourcing, but now businesses can take control of their operations and strategies while leaving the work of developing supportive tools to HH Galaxy,” emphasized Ethan.

The new round of e-commerce competition has already begun, and the winners will be those who can effectively utilize digital tools to enhance operational efficiency and gain insights into consumer behavior!

E-commerce businesses are sailing in the ever-changing digital technology landscape. In 2023, where will the trends head? What are some of the keys for e-commerce businesses to keep in mind to grow their business?

Simon Hsieh, Head of Performance, Tech & Export at Google Taiwan, shared what he thought was the most crucial concept of e-commerce: “Platforms such as Google or Meta are not necessarily just a media, they are a kind of sales channel. Many would consider online advertising as an outdoor billboard, which you can put ads on it as long as you have budgets and designs. Actually, online advertising is more similar to a channel with great flexibility, where we can help brand clients find their customers, sell their products and grow their businesses! ”

Machine Learning Finds Best Selling Opportunities

But how does the platform enable such capabilities? “The credit goes to machine learning. Not simply a cool tech, it can be utilized to find selling opportunities!” In this era of mobile devices, one can say that the space for digital ads is boundless. As long as the clients have the right sales strategy, they will be given a great sales opportunity.

“The right sales strategy requires keeping track of several KPIs, such as selling price, ad spend, and the ROAS (return on ad spend),” Simon explained with figures. Assuming each product sells at NTD $300, and the client is willing to pay $100 for ad spend, then the ROAS would be 3. Once we identify the target number, Google’s machine learning algorithms will track down all the possible selling opportunities with the ROAS being 3 amongst the boundless online ads space. It is the power of machine learning.

Machine learning algorithms also allow ad customization according to different customer preferences. “A product might have many selling points. Some customers care about its look, some value its usability, and some are price-driven. In this regard, clients can prepare multiple sets of ad materials, such as two titles, five ad copies, and 10 video clips. The machine learning model will mix and match different ad combinations catering to various customer segments like the price-sensitive group or those value design aesthetics. What’s the purpose of such targeted advertising? We are all in for closing deals.” This form of advertising has its name–performance-based advertising.

Fueling Businesses: Unlimited Investment within Target

There are barriers to entry in the field of digital advertising. For brands, partnering with a great media agency can save efforts for better results! Savvy in working with media agencies, Simon found that many of them do not have the right mindset. Many agencies allocate ad budgets proportionally with uneducated guesses. For example, they might spend 50% of the budget on search, 35% on Youtube, and 15% on Display. However, such budget allocation does not necessarily help their clients drive sales.

“A good media agency will discuss with their clients, review previous sales performance, and understand their business goal. Then they will design an advertising strategy that factors in the sales data,” said Simon.

Simon continued, “five years ago, I started to talk about a concept of ‘unlimited investment within target‘ which many people did not understand at that time.” The “target” refer to the business goals, mostly ROAS or CPA(cost per acquisition). If an ad is making money for clients, then it makes sense to capitalize more budgets on the ad.

“Those who get the gist of this idea will come to me and ask, ‘how do I spend my money?’ If the money does not get spent, they are concerned because it means the business is not growing.”

“Agencies have to take in performance-based metrics. If you stick to brand awareness as the key metric, what the system would find are those people who see your ads, but not those who make the purchase. If the advertising strategy does not align with your business goals, you are wasting the budget. When your competitors are winning with the right metrics, your brand may fall behind in the game.”

Media Agencies as Business Partners

When brands are choosing an agency partner, Simon finds exploring the following questions a good start:

1) Does the agency familiar with GA(Google Analytics)?

2) Does the agency complement my brand? Can the agency produce performance-based materials?

3) Can the agency produce high-resolution video clips at a low cost?

4) Can the agency discover the selling points of my products, and create a synthetic performance with machine learning algorithms?

5) Can the agency identify underperforming materials and make optimization?

“Agencies are the business partners, and they help clients develop sales-driving ad strategies. A powerful agency can even tell its client which platform has the potential to capitalize on.”

Simon insisted that the data analytic capability is a must-have for agencies. Media agencies need to identify and optimize underperforming materials on time and help clients eliminate waste in their budget. Which video clip attracts customers? Which content goes viral? These insights are signals for future strategic planning. “The accumulated data can inform us of possible actions such as adjusting ad materials, tweaking the target audience, or changing the ad frequency.” With adjustments made correctly, the ROAS will improve accordingly.

In this interview, Simon also shared his observation on HH Galaxy. “Many media agencies focus themselves on media and prioritize media relations building. Unlike them, HH Galaxy provides its clients with fully-integrated services from sales and marketing to business operations. Assisting everything from product listing to data analytics, and from advertising to logistics, HH Galaxy has tremendous advantages in helping their client succeed. HH Galaxy is irreplaceable in the market.”

Digital Trends in 2023: Video Contents

When asked about digital advertising trends in 2023, Simon promptly replied, “driving conversions through video content is the future. Customers can make purchases while watching short videos or live streaming.”

Youtube Shopping will be launching in Taiwan soon. Simon’s team partnered with Mr. & Mrs. Gao, a famous youtube channel, for market testing. They displayed product links of fan merchandise when Lao Gao, the YouTuber, was doing live streaming. The audience could make purchases immediately with a few clicks, and the result was surprisingly good. “We believe Youtube Shopping is the key growth driver for cosmetics and apparel brands. In the future, it will benefit many other industries.”

The core team members have extensive experience thanks to previous tenures in P&G, the American multinational consumer goods corporation. “We aim to build our team and services with a global mindset,” said Gutz Wang, Sales Director of HH Galaxy.

From communication and negotiation skills to business forecasting, and measuring marketing performance, Gutz dedicated himself to sharing these skills he learned at P&G with his team. “I once had a partner tell me how assured and comfortable they were to work with us.”

As a sales representative, Gutz shares the most challenging thing in doing business. “Brands want to achieve business goals with allocated budgets while promoting their brand value. Yet e-commerce platforms would argue for the best prices. Our job is to balance both needs and interests by finding them a sweet spot for an enjoyable collaboration.”

In addition to solid negotiation skills, the HH Galaxy team possesses a great advantage over other e-commerce agencies. “With over 30 partnering e-commerce platforms, we have a sound grasp of their features and user persona. Moreover, we currently serve more than 100 brands and have enormous samples of transaction data at hand. These cross-category and cross-platform data marry with practical data analytics and advertising experience, our team is capable of keenly evaluating successful strategies and tactics for product promotion.”

Comprehensive Grasp of Brands and Platforms

When it comes to onboarding new clients, the HH Galaxy team first helps brands select the right products based on the customer attributes of each e-commerce platform. Then they would help drive their sales by aligning advertising resources and marketing campaigns with each platform’s own campaigns. Taking a casual shoe brand as an example, this client has witnessed an incredible 60% growth in sales since they started partnering with HH Galaxy in 2020. Such success can be credited to the team’s profound understanding of e-commerce platforms.

“The customer base that prefers to shop with Momo, an e-commerce platform in Taiwan, is mainly women between mid-30s and mid-40s. They tend to have clear preferences and personal styles. So we suggest the client offer shoes in plum or pink color on Momo’s platform. In contrast, we suggest selling shoes in grey and black color on Shopee, another e-commerce platform, because the customers here are comparably younger and look for shoes that go for all occasions.” This product selection technique helped the client achieve exceptional sales in last year’s Double 11 campaign.

In addition to targeted product selection, the HH Galaxy team utilizes the “resource exchange” technique when negotiating with platforms. “Many brands working with e-commerce platforms for the very first time often find it difficult in product selection and struggle with offering the best prices to meet the e-commerce platforms’ expectations. However, we can create a triple-win through resource exchange. Examples of this technique include Double 11-exclusive product offerings on respective platforms or different product bundles.”

HH Galaxy also embraces the shopping festivals created by e-commerce platforms. “Besides the annual 6/18, 9/9, and 11/11 events, Shopee launches “double date” campaigns on its platform each month, such as 1/1, 2/2, 3/3, and subsequently until 12/12. Plus, free shipping and discount coupons on the 18th and 25th of each month. So when special offers are launching on the platform, we can help clients optimize advertising resources for better results.” The team currently helps operate 30+ official shops on Shopee, thus they stay on top of trends. “According to our experience, the three days of sales in each month account for 70-75% of a client’s monthly sales.”

Smart Spending: Wise Resource Allocation Drives Sales

With expertise in data, the team found that the 80/20 rule applies to a brand’s e-commerce operation. First, 20% of the items will bring in 80% of the sales. Second, 20% of the sales days contribute to 70-80% of monthly sales. Therefore, advertising resource allocation is the top priority of the HH Galaxy team in addition to product selection.

Previously, a big FMCG brand client chose a single celebrity endorsement strategy, hoping to drive sales in all categories in the Double 11 shopping season. Yet the performance was far from satisfying. “This year, my advice to this client was resource allocation. Instead of splurging all budgets on one celebrity, they can collaborate with different KOLs for different categories and share their campaigns with consumers in late October.” As a result, this client saw steady sales growth with a 30-40% increase compared to the same period last year.

?

Integration Creates Greater Growth Momentum

Currently, HH Galaxy is working on integrating, and aligning all functions across sales, advertising, warehousing and logistics, and CRM together. “Ultimately, we will have the same KPI, which is to help our customers achieve their sales goals. Horizontal integration will boost and strengthen our services. The power of integration resembles the ‘boxing combo’ in Japanese manga. When different moves are combined, they will burst out with unexpectedly strong power.”

Horizontal organizational integration will become a great advantage for HH Galaxy. When a sales rep finds that a client’s product bundle (e.g. product A + product B) was not selling as expected, and they would like to experiment with a new bundle (such as product A + product C). “Such an idea can be tested and verified the next day. We can do that immediately because the shipping and logistics are seamlessly integrated and handled by us.” In contrast, if the e-commerce operation and logistics are contracted with different companies, it might take up to two weeks from idea to execution.

“E-commerce is a battlefield where every second counts. Timely verification and adjustment not only save costs but drive better sales results. In addition to modifying the contents of product bundles, HH Galaxy is capable of real-time inventory scheduling. “We have an internal inventory allocation system connecting with all major e-commerce platforms. This system redistributes inventory figures on each platform every 30 minutes, automatically allocating goods to the most hot-selling platforms without manual adjustments.”

The same logic applies to advertising. “Our team will do sales forecast for clients. If we expect the sales to grow in the first 10 days of this month, yet the sales are lower than expected, we can adjust the contents of the campaign or the ads in a timely fashion. If the click rate of an ad is high but conversions are low, we may need to adjust the product offerings. And if the click rate is low, we can replace it with new materials for another shot.”

?

Post-Covid Consumer Behavior: Concentrated Orders

Gutz observed that after the pandemic, consumers are making orders more intensively than in the past. “According to data from several main campaigns earlier this year, consumers were less obsessed with countless shopping festivals. Before this year’s Double 11 event, people were generally pessimistic about this year’s sales growth. Lifting lockdown is one of the reasons; hiking interest rates is another reason, as consumers might have less disposable income than in previous years. This year’s sales data showed that consumers would wait for the best timing and make purchases within 1 or 2 days.”

With such insight, Gutz shares his marketing advice for next year: “For the next Double 11 event, I would recommend early spreading on key promotions, reaching your customers in advance. Let them know what your campaigns are, and choose your products as one of the items they would buy like crazy.”

Advertising is the lifeblood of an e-commerce business. The performance of ads determines the sales of a product, calling the shots for a brand in the Taiwan market. In this era of e-commerce where advertising is ubiquitous, the HH Galaxy digital media team focuses on performance-based advertising to pursue actual purchases. They value CPA (cost-per-action) over CPC(cost-per-click) and buckle down to increase ROI on ads for better sales performance on e-commerce platforms. An expert in performance-based advertising, the HH Galaxy digital marketing team is the certified partner of Google and Meta, and the designated partner of Shopee and PChome for performance-based advertising. Less than five companies in the industry enjoy such unanimous appreciation from these major platforms.

How to Leverage Historical Data?

It is a well-known fact that data is king in the e-commerce business. “Data matters, but how can we help clients achieve their performance goals?” April Chang, the director of Digital Media of HH Galaxy, explains how the team utilizes data to drive performance. “Unlike other media agencies, our team works with clients on budget planning in a performance-driven manner. First, we would identify the total sales target, and then calculate the ‘a(chǎn)dvertising-to-sales ratio’ based on historical data. Next, we use the ROAS (return on ad spend) to calculate a client’s actual advertising spend.”

Applying actual figures, say the total sales target is 50 million. According to historical data, the advertising-to-sales ratio is 20%. Based on our assumption, when the ads spend brings 20% of sales (i.e. 10 million), the total sales target is likely to be achieved.

“With the ads-to-sales target of $10 million, we will estimate the ROAS according to historical data. Assuming that the figure is 8, the advertising spends that the client needs to invest is $1.25 million. If we can budget $1.25 million for advertising, it is possible to reach the $50 million sales target.”

The HH Galaxy team has a data-driven mindset and conducts sales forecasting based on historical data. When the team onboards a new client, they would first work on a few small campaigns to accumulate data for key campaigns. “we will let them know if a client allocates too much budget.”

During this year’s Double 11 campaign, HH Galaxy has converted over NTD$ 420 million in sales for clients in a single month and brought over NTD$ 2.7 billion in cumulative sales in 2022. The team recommended their clients start deploying campaigns as early as September and October. Moreover, they suggested clients use Google’s latest performance-based advertising tool “PMAX NCA” for new customer acquisition.

The HH Galaxy’s data indicated that compared to October, the average ROAS of PMAX NCA ads was the highest among all performance-based advertising tools during the Double 11 period, 220% higher than other performance-based ads.

Publish Performance-based Ads on Multiple Platforms With a Single Click

“Nowadays, everyone has a social account. The process of publishing digital ads is not difficult, brands can do it on their own. Yet the real challenge is to identify the effective one that outperforms other ads as quickly as possible. If you acquire this information, you can invest intensely in the most effective ads.”

HH Galaxy developed the “Power AI System,” which allows clients to publish ads on Google, Meta, and Shopee with a single integrated platform. It saves time and effort to deal with different systems on each platform. Once an ad is published, the Power AI system instantly collects and visualizes data, providing clients with real-time conversions and results.

Each client will have their own Dashboard, which integrates search ads data from Google, Facebook, and Shopee, as well as sales data from Momo, PChome, and the brand-selling site. The Dashboard shows indicators such as sales revenues, average order value (AOV), and conversion rates, enabling clients to compare the real-time performance on each platform and grasp the key to growth.

“We value data and want our clients to have real-time access to data. If we can better understand the data, we can help them achieve better results.” Since the launch of the Power AI system in January 2022, it has served more than 500 clients.

Besides, HH Galaxy integrates an AI ad creation tool to streamline the workload. Clients only have to prepare a set of contents and ad materials for a campaign without having to resize everything to satisfy the requirements of each platform.

This year, an international jewelry brand used this tool to design a layout, and adjusted ad materials according to the Double 11 campaign in real-time, speeding up the ad creation process. Compared with the performance of last year’s Double 11 campaign, CPC dropped and the overall traffic increased by 135%.

HH Galaxy will analyze the data performance of each month and send monthly sales trend reports to all Power AI clients. “We put the sales performance first and conduct ROAS analysis on the monthly sales. Then, we will look at historical data, ad performance, and target audience. Lastly, we make recommendations for future operationalizations. ”

New Product Launches on Crowdfunding Platform “Zeczec”

In 2021, HH Galaxy helped its client Roborock win record-breaking results on Zeczec, a crowd-funding platform in Taiwan. Roborock S7+, the latest model of Roborock’s robotic floor cleaning devices, has attracted 10,847 sponsors and raised NTD $210 million in just over a month. This project broke records on Zeczec and was the highest-funded crowd-funding project in Taiwan. Behind the remarkable achievement, it was the HH Galaxy team who helped design and execute the advertising strategy.

“We use sales figures to calculate ad spends. We ask about the ideal sales target and use conversion rates to reverse-engineer how many views are required to achieve that sales target.” Roborock and HH Galaxy conducted a concept testing survey to identify potential customers and offer early-bird discounts. “In the traffic-driving process, our team kept track of the sales performance and continued to discuss with the client to maximize the performance. We are glad to help achieve such an excellent result.” Roborock launched two successful crowd-funding projects on Zeczec, which earned NTD $210 million and $140 million respectively. Both projects were partnered with HH Galaxy.

“Zeczec gradually becomes a new go-to platform for product launches in the technology appliance category.” Later, HH Galaxy suggested a consumer electronic brand launch a new product on Zeczec, and that product brought $18 million in sales, which was the best-seller in the same product category.

In November 2022, HH Galaxy launched the “De’Longhi Automatic Espresso Machine” on Zeczec. From idea creation to actual execution, this crowd-funding project was taken care of by the Biz team and the Digital Marketing team of HH Galaxy. Ultimately, the project raised over NTD $5 million.

These hands-on experiences enabled HH Galaxy to discover new channels to help clients better sell their products. “Pre-orders on the crowd-funding platform helped our clients to determine the demand and lift inventory pressures. Once a project is successfully funded, other e-commerce platforms will be more willing to support.” In addition to advertising, HH Galaxy provides a one-stop solution from content design to product launching on the Zeczec platform.

HH Galaxy embraces a data-driven mindset and strives to provide user-friendly systems and deep insights. In the past two years, they developed the “Power AI System,” and helped clients achieve excellence. The digital media team continues to evolve with the ever-changing industry, bringing their clients quality service and driving better sales results.

The HH Galaxy team agrees that interpreting historical sales data is the key to future e-commerce development. As an e-commerce agency, HH Galaxy partners with 30+ e-commerce platforms and serves 100+ brands. “Everyone believes in data. Insights await discovery. We invested lots of resources in cross-departmental integration, seeking insights hidden in data. We want to apply these findings to our service to better serve our clients and drive their sales,” said Ethan Shaw, Director of Platform & Digital Media of HH Galaxy.

HH Galaxy established its management department with two primary goals: service process optimization and insight discovery through historical sales data. Since 2020, HH Galaxy has developed the Real-time Inventory Synchronization System, Sales Database, and Shopee Smart Segment Broadcasting System. Such integration provides clients with real-time data, proactively reminds them to track KPIs, and helps find effective sales and marketing strategies.

Real-time Inventory Synchronization System: a Hidden Strong Card for Brands

In the e-commerce battlefield, inventory deployment between different platforms determines the success of a business. Brands want to avoid a situation where there are no items available on platform A, yet still many items in stock on platform B. It might be more advantageous for brands if the inventory could automatically move from platform B to platform A.

HH Galaxy’s Real-time Inventory Synchronization System was born to resolve such concerns. The system now supports all major online shopping platforms, such as Momo, Yahoo, Shopee, 91app, etc. This system automatically redistributes the actual inventory quantity from the warehouse to each e-commerce platform.

Automation significantly reduces human errors. In the case of national holidays or long weekends, the system can prevent lost sales due to untimely adjustments of human labor. “The system automatically reallocates to keep items in stock on hot-selling platforms. It also suggests clients do a marketing campaign if an item’s days sales in inventory (DSI) are high,” said a Project Manager of HH Galaxy.

New Tool Pairs with New Mindset: Unlocking Brands’ E-commerce Potential

In addition to inventory status, HH Galaxy provides its clients with instant access to the most crucial information–sales performance. With years of experience in performance-based advertising analysis, HH Galaxy teams up with three major e-commerce platforms to create one-stop visualization reports for clients.

Each client will have their own Dashboard, which integrates search ads data from Google, Facebook, and Shopee, as well as sales data from Momo, PChome, and the brand’s official site. The Dashboard shows indicators such as sales revenues, average order value (AOV), and conversion rates, enabling clients to compare the real-time performance on each platform and grasp the key to growth.

The overview of daily order and sales data is helpful, however, such historical data is now set in stone, unamenable to adaptation. HH Galaxy goes above and beyond. The team aims to analyze order purchase data to accurately predict future customer behavior, providing their brand clients with targeted marketing to create greater value.

For example, order analysis may bring out these insights: a sales representative would suggest selling product bundles when they find many customers tend to purchase lipstick and eye&lip makeup remover together. When they find eyeshadows and lipsticks in rosy colors are popular among customers, they can target specific customers in future product launches.

Another example might be when a customer buys diapers, clients can quickly target the customer with related products such as baby bottles and pacifiers. For those repeat purchase products such as 30-count diapers, we can offer next-order discount codes or coupons, or remind customers to replenish larger-size diapers as their babies grow.

With order data at hand, we can leverage such insights. “CRM is an old story, yet few truly apply CRM to drive sales. The silos between the team doing the e-commerce business and the team developing the analysis tools were the problem. In addition to finding partnerships, we address our own business needs by effectively integrating CRM tools, ”said the HH Galaxy team. At present, HH Galaxy is working hand in hand with increasingly more clients, together, they analyze and interpret the data and explore promising business opportunities.

Shopee Smart Segment Broadcasting System

A customer’s purchase history hides future business opportunities. The “chat” feature on Shopee is an excellent marketing channel. After analyzing order data gathered from Shopee, the HH Galaxy team segments customers and conducts personalized marketing via chat.

For example, a pet food brand launched a new product for dogs with specific diseases. When a customer makes an order, the brand will proactively share vet-provided pet care information via chat. “We provide not just the product information but a comprehensive nutrition plan for pet owners to better take care of their dogs.” Previously, brands were also willing to share such information with pet owners. However, traditional untargeted broadcasting was ineffective and disturbing. With the targeted segment broadcasting system powered by HH Galaxy, brands are seeing positive customer feedback.

In essence, they sent the right message to the right person at the right time. Next, HH Galaxy will continue exploring the use and interpretation of data. “We can not only use information such as order amount and frequency but also pair with a brand’s domain knowledge. Or we can propose corresponding campaigns for low contributors to boost their spending. Ultimately, we will combine brand knowledge with e-commerce tools, helping our clients deliver better results.”

The HH Galaxy team completed the integration and launch of the sales database within just eight months. They also carried out the integration of the Shopee CRM system in about a month. Their next step is to help clients organize and analyze data on their brand-selling site. “In our initial testing at Shopee official shops, the return on ad spend (ROAS) was 15-17. We look forward to partnering with brands to unlock more secrets behind the data.”

Brands tend to focus on cutting costs in logistics. However, quality logistics services can help brands lower order cancellations and, in turn, boost sales. Derek Wang, the Logistics Director of HH Galaxy, said “during the main campaign periods, the first 24 hours are critical for order shipments. If shipments postpone by one day, it could lead to a 5-10% cancellation rate.”

The logistics team at HH Galaxy had been gearing up for the annual buying spree as early as August, three months ahead of the 2022 Double 11 shopping festival. They outlined well-thought plans on logistics and accomplished the mission: shipping within 24 hours.

How did the team take preemptive actions and seamlessly deliver?

3-month Preparation to Help Ship within 24 Hours

During the Double 11 festival, e-commerce platforms would launch different daily campaigns. When a customer places an order on platform A and sees another campaign (perhaps with better discounts) on platform B the next day, the customer will likely cancel their order on platform A. “The key task for an agency is to speed up package deliveries. Our goal is to ship within 24 hours after a customer placed an order,” said Derek. “Reducing order cancellation rates equals increasing sales for clients! ”

However, such a goal was easier said than done. The order volumes during the Double 11 event could be a hundredfold or thousandfold than usual. To help their clients drive better sales, the HH Galaxy logistics team had been preparing themselves three months ahead.

Derek shared the four pillars of effective logistics planning: inventory, equipment, warehousing, and workers. “First, we need to identify the sales target, and estimate corresponding order and inventory volumes.” With a number in mind, they would assess whether the warehousing is large enough and whether the pieces of equipment are sufficient.“Our assessment indicated this year we need to double the inspection lines and enlarge the shipping space by 1.5 times.” Ultimately, HH Galaxy increased its personnel by 2.5 times to accommodate high shipping volumes during the campaign.

These four elements were seamlessly organized, yet not every e-commerce agency could deliver such execution. The HH Galaxy logistic team, which only consists of 10 people, was responsible for all processes from inventory management to order shipment and customer service. Their mission was connecting all the dots whenever a customer makes a purchase, having the goods delivered to the customer in the shortest time possible. “During the Double 11 event, we were able to ship 80% of our orders within 24 hours, and completed 99% of orders within 72 hours,” said sincerely and proudly Derek. Such performance was a remarkable achievement in the industry.

Real-time Monitoring and Batch Orders

“In addition to planning and preparation, we communicate closely with the warehouse and make dynamic adjustments during the campaign periods. We conduct real-time monitoring on orders and make multiple batch orders to the warehouse within a day.”

The order volume during the Double 11 period is the highest in a year. Yet the arrival of massive orders generally overwhelms or even paralyzes the capacity of warehouses. Quality logistics management requires an extremely high shipment volume to be converted to smaller chunks that personnel can handle within multiple days. Otherwise, a single day of orders may take up to a month to be shipped and fulfilled.

Besides multiple batch orders, HH Galaxy conducted real-time dynamic adjustments on inventory arrangement in warehouses. “When we expect a surge in orders of a particular product, we will place the inventory near the picking area. We even make it possible to receive inventory and ship packages simultaneously.” With solid support from HCT logistics, HH Galaxy enabled stable and increasingly efficient warehousing and logistics capacity.

During the campaign, the HH Galaxy logistics team even provided customized packaging for their clients’ “value-added services.” “During the main campaign period, the volume of goods is measured in tens of thousands. Preemptive planning is the key. We surely don’t have the capacity to pack 30,000 items in a day, but we can process 3,000 items every day in 10 days. This way, every e-commerce platform can have items available for order, and warehouse personnel can complete the packaging and shipping within the deadline. ” Preemptive planning and workload distribution allowed the HH Galaxy team smoothly handle large orders during the Double 11 campaign.

Logistics: Reducing Cost and Boosting Sales

If logistics planning does not align with order forecasting, overtime pay for warehouse personnel will be the top concern. When there is not enough space for warehousing, no space for goods means no goods to sell. Finally, if inventory management does not go well, the goods will expire or perish, resulting in losses. “Some of our clients partner with us because they cannot handle large shipments during critical campaigns on their own. They appreciate the value of our work.”

Derek, who has 10+ years of experience in logistics, said sincerely, “Our team has abundant experience in the industry, and we understand the aftermath when such situations happen. We strive to smooth the logistics processes for our partners, reduce order cancellation rates and help increase sales. “

“This year, I expected a 30-35% increase in order volume over the same period last year, but it turned out to be a 43% increase!” Fortunately, adequate planning and preparation helped the team embrace the Double 11 event smoothly. With a belief that reducing sales loss equals helping clients increase sales, Derek Wang and his team are building up quality logistic service at HH Galaxy.