According to Forbes, Southeast Asia is the most popular battleground on the Internet.
In the dynamic world of digital commerce, there isn’t any place as exciting as Southeast Asia, where the net consumer base grew by 50% last yr and now stands at 200 million across six of ASEAN’s largest economies – and where on daily basis brings news of hyperactivity.
Here’s how the rise is explained:
When Amazon launched operations in Singapore earlier this yr, it took the primary steps in a long-awaited showdown with Alibaba. Alibaba invested $1 billion in local player Lazada this yr, increasing its stake from 51% to 83%.
It has also taken steps which have enhanced Lazada’s ability to profit from Alibaba’s vast and well-oiled ecosystem. For example, its affiliate Ant Financial has merged with Lazada’s helloPay platform (since rebranded to Alipay) to streamline payment processing. Alibaba also continues to take a position in local player Tokopedia. These investments are constructing muscles for a world-class clash of titans – through which the most important players compete directly with one another, and native players act as proxies for foreign giants.
In addition to its scale and hyperactivity, this region is especially attractive because winning there can ensure firms’ success in emerging markets world wide. While victory will not be certain for any player, probably the most promising contenders are working to construct unique strengths that may give them a bonus over their rivals, at the same time as they overcome the inevitable problems that include exponential growth.
The best firms closely follow players from various industries to attract conclusions that might help them grow. They acknowledge that while e-commerce volume within the region could also be small – by some estimates only about 3% of retail – they’re preparing for the inevitable day when this penetration increases to 10-15%, which can have a big impact on physical trading markets.
TERRITORY OF DIVERSITY
Amidst this freedom for all, some leaders are emerging. Lazada has emerged because the leading e-commerce platform in 4 of its six markets. However, a very powerful and looming query is whether or not it’ll maintain this position as Amazon expands its presence within the region.
Foodpanda is a number one food delivery destination in 4 markets. But will passenger transport leader Grab’s expansion into food delivery (Grabfood) threaten this status? Whether an organization is an area or global player, or deals in technology, consumer goods or financial services, some basic principles will help distinguish the winners from the laggards.
In short, here’s how you’ll be able to profit from and conquer the regional e-commerce market:
Source: Forbes, Bain & Company official website
