e-Commerce opportunities for retailers in Southeast Asia

Exciting may not be the best word to describe the e-Commerce landscape across Asia. Sure Taobao and Alibaba continue to mine China’s online buying craze with its annual “Single’s Day” but in other parts of the world, 2016 was a shining example of how consumer buying preference does not necessarily mean financial rewards for shareholders.

The high profile sale of fashion e-tailer, Zalora, to local business groups such as Central Group in Thailand, Ayala Group in the Philippines, as well as the potential sale to MAP Group in Indonesia, should not draw to the conclusion that e-Commerce is dead. Indeed, if at all, it is a signal that traditional brick-and mortar retailers recognize the opportunities of e-Commerce and plan to pour resources to gain a foothold into the local e-Commerce scene before giants like Alibaba and Amazon get a foothold in the local scene.

Retail Tech Innovation recently spoke to CrescoData CEO, Anna Trybocka, for her take on the opportunities and challenges for both pureplay online e-tailers and established retailers entering Southeast Asia’s nascent e-commerce marketplace.

Yes, Southeast Asia has embraced the internet opening a plethora of opportunities for enterprising entrepreneurs to cash in on the opportunity alongside established players. With about 70% of the population in the region is under 35 years old, the young people have been driving the adoption of the internet that continues to disrupt existing business models.

Figure 1: Total valuie of national e-Commerce market in 2016 (US$ billions)

Total value of national e-commerce market in 2016 (US$ billion)

Source: Digital in 2017, Statista Digital market outlook, e-commerce industry, January 2017

However the latest “Digital in 2017: Southeast Asia” report by We Are Social and Hootsuite cautions that each country is different and that a one-fits-all approach in Southeast Asia wouldn’t fly without localization, perhaps even a lot of it.

According to Trybocka, e-Commerce is a massive opportunity in Southeast Asia with only 1-3% of retailers currently online, compared to double that figure in North America. She concedes there remain plentiful challenges ranging from logistics, to connectivity through to cross-border trade and payments.

“There is a general lack of integrated, real-time systems that link retailers’ physical stores with their online platforms. It is important to ensure that they have real-time stock availability across both physical and virtual stores,” she commented.

Watch the exclusive video to get her insights into where the challenges are most acute, as well as how smaller retailers can thrive even with the growth of Internet giants like Amazon and Alibaba.

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