Southeast Asia has its finger on the button for online shopping

As more people choose to shop from the comfort of their computers, the battle lines between online retailers are being continuously redrawn.

August 17, 2017

E-tail giant Alibaba has already begun to make significant inroads. It increased its stake in Southeast Asia’s homegrown e-commerce site Lazada from 51 percent to 83 percent. It also setting a regional logistics hub in Malaysia by end 2019 that will function as a centralized customs clearance, warehousing and fulfilment facility for Malaysia and the wider region to deliver faster clearance for imports and exports.

Fellow Chinese rival is entering via Indonesia and Thailand. It is reportedly in talks with Indonesia’s Tokopedia, one of Indonesia’s largest online marketplaces, and has announced it is expanding into Thailand at the end of the year.

Elsewhere, U.S. behemoth Amazon made its move by launching in Singapore last month and currently occupies a warehouse of nearly 100,000 square feet in the western end of the island state while home-grown start-up, Sea, is focusing on its ecommerce site Shoppee following a fresh round of funding

A new era of collaboration

Closer ties between Southeast Asian nations can help. The Association of Southeast Asian Nations founded on August 8, 1967, celebrates its 50th anniversary this month. It ushers in a new era for the region, whose collective economy is booming. Growth for the ASEAN 5 –Indonesia, Malaysia, the Philippines, Thailand and Vietnam – is projected to exceed 5 percent year for the next decade. The region is also poised to benefit from its young demographics and a growing middle class population that’s set to increase by some 70 million, which will spur demand and consumption.

Already  manufacturing sector in the region has picked up tremendously, drawing investment away from China. “The spread of technology and investment in infrastructure such as roads and high speed rail will further spur Southeast Asia’s e-commerce and consequently, logistics industries,” says Lim. “Logistics hubs could emerge in locations where there are busy port connections and large population catchments such as Singapore, Indonesia and Thailand. This is a development that hasn’t been lost on the government of the different Southeast Asian nations as they have put in incentives to encourage this growth.”

The Singapore government has pledged to transform the industry and “invest in next-generation facilities” as well as research into digital supply chains and ecommerce logistics. Thailand has put forth a Manufacturing Logistics Master Plan 2017-2021 aimed at lowering logistics costs to every industry by least 20 percent and optimizing supply-chain management by at least 10 percent by 2021.

“For ecommerce to take off in Southeast Asian on a whole, ASEAN needs to band together more cohesively to overcome common logistical obstacles as well as trade issues through implementing the ASEAN Window Policy,” says Lim.

And if the governments can put in place in the right trade frameworks, consumers across Southeast Asia will cheer the acceleration of ecommerce in their backyard.