According to Forbes, Southeast Asia is the world's hottest online battleground.
In the dynamic world of digital commerce, there’s no place as exciting as Southeast Asia, where the online consumer base grew by 50% last year and now totals 200 million individuals across ASEAN’s top six economies -- and where every day brings with it news of hyperactivity.
Here’s how the growth is explained:
When Amazon opened for business in Singapore earlier this year, it made the first moves in a long-awaited showdown with Alibaba. Alibaba invested US$1 billion in local player Lazada this year, raising its stake from 51% to 83%.
It also took steps that boosted Lazada’s ability to benefit from Alibaba’s vast and well-oiled ecosystem. For example, its affiliate Ant Financial merged with Lazada’s helloPay platform (since renamed Alipay) to strengthen payment processing. Alibaba also continues to invest in local player Tokopedia. These investments are building the muscles for a world-class clash of titans—with the big guys competing head to head and local players serving as proxies for the foreign giants.
In addition to its scale and hyperactivity, what makes this region particularly compelling is that winning here can position companies for success in developing markets around the world. While victory is not a sure bet for any player, the most promising contenders are working to build the unique strengths that will give them an edge over their rivals, even as they work through the inevitable growing pains that accompany exponential growth.
The best companies are carefully tracking players across industries for the lessons that can help them advance. They acknowledge that while e-commerce volumes across the region may be small—only about 3% of retail by some estimates—they’re preparing for the inevitable day when that penetration rises to 10%–15%, causing a significant effect on physical sales.
THE DIVERSITY TERRITORY
Amid this free-for-all, some leaders are emerging. Lazada has risen to become the leading e-commerce platform in four of the six markets. But the big, lingering question is if it will maintain that position as Amazon boosts its presence in the region.
Foodpanda is the top food delivery site in four markets. But will ride-hailing leader Grab’s expansion into food delivery (Grabfood) threaten that status? Whether a company is a local or global player or a technology, consumer goods or financial services company, some fundamental rules will help distinguish the winners from the laggards.
In short, here’s how the region’s e-commerce market can be fully utilised and conquered:
Source : Forbes, Bain & Company official website
