Janio’s Bi-Weekly News Round-Up | End-September 2019

Amanda Lim

A curation of the latest news in eCommerce, logistics, and tech in Southeast Asia and beyond.

Janio's Bi-weekly News Roundup

The end of Q3 2019 also marks the end of an era for Alibaba, but will the Chinese eCommerce platform be able to weather the transition? Singpost’s US subsidiaries are in troubled waters as they continue to seek buyers. Meanwhile, more challengers are rising in the face of Southeast Asia’s eCommerce boom.

 

Southeast Asia’s eCommerce Market Sees New Competition Rising Up, Incumbent Invests to Defend

As eCommerce booms, Australia’s logistics landscape rises to meet the challenge1. Insiders in the industry are saying that Australia is the next big logistics power to look out for as eCommerce continues to boom in Southeast Asia. Domestically speaking, it will have challenges in its first mile and last mile deliveries as the population is fairly dispersed. However, if they are able to tackle cross border shipping into Southeast Asia, they are poised to rise as a powerful contender within the SEA region.

Merchants like Australian Gallery are riding the waves of SEA’s fast-growing eCommerce scene with great success! Find out how they’ve captured their share of Indonesia’s eCommerce market with our case study

For a deeper analysis into Australia’s product potential in Southeast Asia, we’ve covered this in our article.

Back in Southeast Asian home turf, Shopee opens a new regional HQ in Singapore2. The new office’s opening, as quoted by the Deputy Prime Minister of Singapore Heng Swee Keat, is in line with Singapore’s investment into the digital economy. The new building is able to house up to 3,000 employees, up from its previous number at 1,500, cementing its intention to hold the fort in the island nation from other competitors.

Singapore’s strategic position will continue to play a vital role for eCommerce platforms like Shopee, as it acts as an economic and geographic hub for Southeast Asia’s burgeoning eCommerce scene.

The End of an eCommerce Era in China

On September 10, Jack Ma officially stepped down and appointed Daniel Zhang as his successor3. Since the formative years of Alibaba, Ma has always mentioned of handing over the reins to the next generation of leaders. Will Alibaba be safe as Ma steps down?4

Ma was quoted saying that his ability to step down shows “the success of [Alibaba’s] system,” and he has always delegated his works to other skilled employees to further his vision.

While this means that Jack Ma has been able to pull off a difficult feat in entrepreneurship – to make himself redundant, Alibaba is still not in the clear from domestic threats that are rising to challenge the platform. With sites like JD and Pinduoduo reporting great sales figures at Q2 2019, Alibaba would need to step up its game with its new leader at the helm.

On the flipside, ‘underdeveloped’ warehousing in China could be an opportunity for real estate investors5. Estimates show that 98% of existing warehouses in China are “old stock,” and only around 2% are “modern warehousing”, meaning China’s warehousing capabilities are not up to par to fulfil eCommerce demands of timely delivery and optimised inventory management systems.

One way to fill this gap isn’t necessarily adding more warehousing space, but by upgrading current spaces to accommodate more B2C orders and to retrain warehouse workers to fulfil orders via pick and pack services. While this provides an opportunity for those looking to enter China’s domestic market, selecting a geographically strategic city like Shenzhen may position any businesses better to take on an international market.

Singpost’s US Subsidiaries Unable to Find Buyers, Seeking Protection

TradeGlobal and Jagged Peak are filing for bankruptcy protection6 while Singpost continues to search for buyers. The eCommerce businesses had filed for relief under Chapter 11, which protects the business while they continue to explore options. The postal company is also not going to include the two businesses in their financial reports moving forward, which signals Singpost’s formal exit from the US eCommerce market.

That’s all for this news round-up! If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.

Want to clear customs in Southeast Asian countries like a pro? Get our customs clearance guide to find out how!

 

References:

  1. Insider Retail: As e-commerce booms, Australia’s logistics landscape rises to meet the challenge
  2. Asia One: Shopee opens new regional HQ in line with Singapore’s push into digital economy
  3. Yahoo: New era at Alibaba as Jack Ma rides into the sunset
  4. Tech In Asia: Will Alibaba be safe into the next century as Jack Ma steps down?
  5. CNBC: ‘Underdeveloped’ warehousing in China could be an opportunity for real estate investors
  6. Nikkei Asian Review: SingPost’s US units seek bankruptcy protection as sale bid fails
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