E-commerce spending in Southeast Asia is growing by leaps and bounds. This rapid growth in ecommerce activity is helping raise revenues for Southeast Asia -and countries beyond- top online retailers, and China hasn’t slowed its hegemony on it. With its own very famous Alibaba, Jack Ma and his team largest the overseas acquisition in Southeast Asia, proven with its implication span the entire commercial value chain from digital advertising, logistic, finance, insurance and healthcare.
Looking forward to 2017, China hasn’t slow its power, Jack Ma has ever said a terminology that if 2016 was the appetizer, then 2017 will be the main course for E-Commerce in Southeast Asia. The game is still on.
1. The giant awakens, Alibaba becomes more active
Seven years ago, this Taobao Partner program was launched, aims to enroll suppliers to provide e-commerce related service to Taobao’s merchants. They offered store operations and fulfillment services through Taobao and T-Mall that enabled them to grow into two of the biggest platforms in China. Now, in Southeast Asia, the imminent launch of a similar program will create ample opportunities for an entire ecosystem. They Swooped up in four months and picked up suddenly Lazada. Full service E-commerce enablers are well positioned to further grow up into $238 billion Southeast Asian E-Commerce opportunity.
2. Alibaba’s Cainiao Network Will Accelerate Last-mile Logistic Consolidation
Cainiao Network created by Alibaba as an open platform that aggregates all last-mile vendors, standing with another last-mile and on-demand delivery startup such as Ninja Van, Ascend Group’s Sendit and Skootar. Alibaba has already begun bringing Alipay and Ant Financial, and with Southeast Asia’s logistic ecosystem that is following China’s trajectory, the introduction of Caniao Network is only a matter of time.
3. New Threats to Google and Facebook : The Battle for “First - Mile”
The E-commerce giants like Alibaba and Amazon are not only a threat for their direct competitors, but also Baidu and Google. Why? Because they are shaking up internet advertising. In china, the rivalry between Alibaba and Baidu happened since 2009, which has led Alibaba to block Baidu’s search engine spiders from crawling and indexing alibaba’s pages. Alibaba has launched Alimama, its proprietary self-service d platform similar to google adwords. Media company better brace themselves. A new competitior is coming to the battlefield.
4. Alipay’s Introduction Will Drive Consolidations In The Online Payments Sector
Most of the initiatives of online payment such as Omise, DOKU, Line Pay, Apple Pay don’t address the core of the issue in Southeast Asia – lack of credit and the large population of underbanked people. most of the fintech was created to do technology for technology’s sake.
Lacking what’s most important, Alibaba pulled of the ultimate Trojan horse strategy to bring in alipay and ant financial into the region. The marketplace offers a massive user base and distribution channel that most of Southeast Asian payment startup envy.
5. E-commerce 1.0 to 2.0
Alibaba’s presence and the rumored of Amazon launched in Singapore in Q1 2017 closes the window of opportunity for E-commerce 1.0 that plays and peddel other people’s products to mass audience. As we enter 2017, the opportunity in E-commerce will increasingly shift from 1.0 towards 2.0 where firms will base their competitive advantage not on traditional economies of scale but on a mix of proprietary pricing, selection, experience, merchandise.
6. Expect more casualties from a potential Alibaba and Amazon face – off
2016 was a big year for consolidation in the Southeast Asian E-commerce space, such as Zalora, Cdiscount, Moxy, Rakuten, Redmart and etc. They will continue throughout 2017, especially the hyper – competitive E-commerce 1.0 space.
7. Multi-Channel Brand
In 2017, we will see brands getting smarter and leveraging a marketplace presence as an initial and short-term strategy. The long-term strategy is to sell direct-to-consumer via their brand.com sites where they own all the customer data, control of brand image and can offer features like subscription commerce.
8. Entrepreneurs established firms will explore insurance, finance and healthcare
Like the US and Chine, startup in Southeast Asia will gradually move into insurance, finance anf healthcare. The underlying concepts are the same : use the internet and technology to create marketplaces or go direct-to-consumer for non-physical products such as loans, life insurance ad even data.
9. Companies begin to focus on Myanmar
With 53 million people, Myanmar is the fifth largest country in Southeast Asia. Business will be exploring new markets geographically in Southeast Asia as large markets become saturates making greenfield ones like Myanmar more appealing. The country is also unique compare to its neighbor. Myanmar is mostly “mobile-only” with an estimated 20% of the population is online.
10. Darwinian economics will thin the on-demand startup herd in Southeast Asia
Poor unit of economics, platform leakage and a stronger economy are all issues that have plagued on demand startup over the past year. The appearance of Happy Fresh in Taipei and Manila, Ventures-backed Tapsy in Thailand, Go-Jek in Indonesia are the examples of those issues above. In reality, this is only a start of natural process of weeding out all the “me-too” players in verticals where the on demand model doesn’t make sense.
11. Amazon Finally Enter Southeast Asia
Yeah, they entered this area. The game is began.
Source : techcrunch.com emarketer.com
