Note to e-commerce players: SEA is same-same but still different

During the 5th Asia e-Commerce Conference in KL, last May, speakers from Facebook and SP eCommerce, an integrated e-commerce solutions provider, shared trends and best practices with interested conference audience wondering how to leverage this dynamic market which is Southeast Asia.

SP eCommerce Marcelo Wesseler probably had the best advice of all, “You can’t see Asia as one homogenous market, especially when it comes to payment methods.

“For example in Malaysia, CIMB Clicks and Maybank2U are two popular payment methods, but a lot of international e-commerce websites do not support these. So they miss out.”

Just simple things like these could raise e-commerce usage, although the e-commerce growth right now is actually promising.

Cost of business in Asia
The cost of doing business in Asia is higher. There is need to customise e-commerce platforms for each country according to languages among other things, and different legal entities have to be set up in each country.

Because it is also hard to measure impact of e-commerce, companies can’t justify investments on e-commerce platforms.

That doesn’t mean pure-play e-commerce players like Zalora, Reebonz, Rakuten or 11street, aren’t thriving. Wesseler discovered that e-commerce transactions in Malaysia have also doubled in the past year.

But in the bigger scheme of things, powerhouses like US and Korea are ringing in 8-percent each as e-commerce transactions out of total retail transactions.

In Southeast Asia, that figure is still less than one percent, but Wesseler opined that the rest of emerging Asia is still developing.

Asia, and in particular Southeast Asia, may yet overtake the US or China. Wesseler even predicts the next five years may see e-commerce growing to comprise up to 7-percent of total retail in SEA.

“Mobile penetration here is higher than in other markets, so we may be surprised,” he said.

In countries like Thailand and Indonesia, 25-percent of e-commerce shoppers only use mobile devices for their transactions.  Southeast Asia is unique like that, due to pockets of her population experiencing the Internet for the first time via a mobile device.

And therein lies mobile devices’ potential to positively disrupt the e-commerce landscape, because of its wider accessibility, compared to desktop computers.

Wesseler also found that for Malaysia, over 60-percent of e-commerce transactions come from outside metropolitan areas like Penang, KL, and Johore Bahru.

“People buy a lot online in (less urban areas), because there are smaller retail footprints there,” he said.

In fact, he also observed that if brands acquire customers in East Malaysia, these customers are more likely to go back to the them, than customers that were acquired in KL.

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