Search

An E-Commerce Cold War For Asia, Where's Southeast Asia?

An E-Commerce Cold War For Asia, Where's Southeast Asia?
Warehouse (illustration. Image source: nfe-lifts.com)

(Photo credit: STR/AFP/Getty Images)

Arguably, the most important e-commerce battle in the world right now is not between Amazon and Walmart or Amazon and the new wave of omnichannel players like Warby Parker and Dollar Shave Club. Rather, it’s the Cold War between Alibaba and Amazon. It’s a battle that will likely span decades, and in the next few years, be most pronounced in Southeast Asia.

The players

In India, we all know the story too well. Flipkart and Snapdeal are faced with the rich American competitor, which is set to pump $3 billion into the country. In Indonesia, rumor is that Amazon will likewise pump $600 million into the country. In a sandwich motion, Amazon is attempting to conquer India in the west and Indonesia in the East. And with a potential new center point in Singapore, Amazon is picking its battles in the region carefully.

In the meantime, Alibaba has wasted no time, shelling out $1 billion to acquire the heavy spending e-commerce player, Rocket Internet’s Lazada. And via its financial arm, Ant Financial (with over $4.5 billion in the bank), Alibaba extends its interests into investments in finance in the Southeast Asian region.

 

With the large Chinese and American juggernauts entering Southeast Asia from all sides, is this a good thing?

Southeast Asia’s incumbents

No doubt, from the consumer perspective, the companies will burn as much as they can for marketshare. It’s good for consumers. That’s obvious. But what will it do for their competitors? The retailers and existing e-commerce sites in Southeast Asia?

Recommended by Forbes
 
MOST POPULAR
 
Photos: The Richest Person In Every State
 
TRENDING ON FACEBOOK
 
Republicans Expose Themselves As Deficit Frauds

Certainly, smaller e-commerce sites are unprepared for an Amazon or Alibaba onslaught. We can see this in India with Flipkart marking down its valuation. There is little evidence that Southeast Asian e-commerce sites are more prepared. And yet, this isn’t the scariest part.

In the U.S., Walmart has had to fend off the onslaught of Amazon, which passed it in market cap in 2015. This is a company that spent $10.5 billion on information technology in 2015. Retailers in Southeast Asia are certainly not more prepared than Walmart. And they’re about to face two companies ready to outspend each other in their market.

Will Southeast Asia’s large conglomerates and governments stand by idly? Are we about to see protectionist regulations that help foster innovation and startups in local countries that can contend against the giants? Will the giants suck the value out of Southeast Asia? Although good for consumers, do they re-inject capital into the local economies?

Indeed, if not dealt with properly by the entire ecosystem of Southeast Asia, it is possible these two elephants will stomp everyone in their battle.

(Photo by Brian Ach/Getty Images for Amazon)

Southeast Asia, once again the linchpin

All of this underlines the importance of Southeast Asia as a market. It’s a battleground that could decide the fates of Alibaba and Amazon in their global expansions. No doubt the Middle East, South America and Africa are in the long-term strategy, but Southeast Asia is ripe for the picking. China and America are locked up, already dominated by their e-commerce incumbents. Southeast Asia is the most immediate greenfield.

Southeast Asia’s importance is not to be underestimated. The implications of the E-commerce Cold War in Southeast Asia has implications for understanding the geopolitics of America and China. It also shines a spotlight on the prowess of Southeast Asia as an innovator and its ecosystem of conglomerates, young startups and government stakeholders. Will these giants be subtracting or adding value to the most funded industry in tech and the hottest subcontinent in the world? We shall see.

Tread lightly in a world with two suns.

(Forbes.com)

About the writer:

Anh-Minh Do ,

I'm a Vietnamese-American venture capitalist based in Singapore with Vertex Ventures, interested in tech, science fiction, culture, society, and philosophy. I have strong ties to Vietnam's startup ecosystem with networks stretching into Singapore and Silicon Valley. I was previously an editor at Tech In Asia, covering Vietnam and Southeast Asia, and Vietcetera.com.

Tags: ecommerce
Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
View all posts

Thank you for reading until here