Does Southeast Asia exactly have a big opportunity in E-commerce?

In the past few years, the global e-commerce giants headed by Amazon, Alibaba, and Tencent tend to focus their investments on an area which has huge potential —— Southeast Asian market.

Compared with the other areas of the e-commerce market, Southeast Asia market has a series of characteristics: late startup, rapid development, lack of innovative features in the operating model. Those features make its global influence not enough yet. However, these local specialties make this area struggle in a state of the blue ocean market.

As one of the fastest growing regions in the world, although Southeast Asian e-commerce starts late, the development is quite fast. Take Lazada as an example. As a local Southeast Asian e-commerce company which is founded in 2012, now it has become the Top 1 of the Southeast Asian e-commerce platform.

Compared with Amazon, Alibaba, Cdiscount, Southeast Asian e-commerce started almost 10 years later than those. Because of the rapid development, there are many e-commerce bubbles in this young market: lack of autonomous big data platform, the operations team isn’t professional and mature enough and an incomplete logistics system, Southeast Asia e-commerce market such as Lazada hasn’t got a highly-sticky customers and its competitiveness isn’t strong enough.

In addition, as a late-started e-commerce platform, a large number of local e-commerce markets copy and imitate directly and indirectly the operating models of the other well-known e-commerce companies, such as Amazon and Jingdong. So it lacks its own local characteristics. That’s why many companies in this area although develop fast, their income and impact are not ideal.

The penetration rate of e-commerce in Southeast Asian is only 3%. We could say that this blue ocean market will attract more and more companies to come here. Therefore how to improve the competitiveness and influence of the e-commerce market in this area is not only the strategic goal of local e-commerce but also a big cake for the global e-commerce giants coming here for investment.

What dose this young market need now? Having an autonomous big data platform is a task of top priority. Now this world is a digital economy market. Having a sufficient big data platform and being able to analyze this data will make the company to understand the tendency of market consumption of Southeast Asia in the first time.

Secondly, an experienced operating team matters a lot because it’s the cornerstone of the e-commerce economy. This team should be “typical”. A “typical” team should fully explore and analyze the local characteristics of various countries in Southeast Asia. Because the cultures, religions, languages and other aspects of Southeast Asian countries are very different: Malaysia is a country with a large Muslim religion, Vietnamese consumers like cash on delivery, Thai consumers prefer to purchase clothes online, 60% of Indonesia’s population doesn’t have bank accounts yet… Only by fully analyzing and understanding these local characteristics of Southeast Asian countries can make the local e-commerce industry become more dynamic and influential.

The logistics system takes an important role in the e-commerce industry. Southeast Asia doesn’t have a complete and efficient logistics system yet. In Indonesia alone, 40% of packages are lost or damaged. This is a great challenge for e-commerce in this area and it is also a huge potential. Because most of the e-commerce companies can’t work without a logistics system. Therefore, the development of the Southeast Asian market need address issues related to the local logistics system.

Southeast Asia is a huge incremental market. By 2020, the number of Internet users will reach 480 million. The middle class is growing fast, and its GDP growth rate will reach 5.3% by 2028. This is a great potential market which will provide unlimited possibilities for the development of global e-commerce.

A propos de Luyue ZHANG

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