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In Case You Missed It - Go-eCommerce Expo: 3 Key Takeaways about Southeast Asia’s eCommerce Opportunities

Benedict Leong

Syed Ali Ridha Madihid Jom Blanja Malaysia Go-eCommerce Expo

9th December 2020 – Held from the 8th – 10th December 2020, the Go-eCommerce Expo was organised by Ministry of Communications and Multimedia and Malaysia Digital Economy Corporation (MDEC) with the objective of promoting and encouraging the adoption of live-streaming eCommerce as a new sales channel for local entrepreneurs.

The Go-eCommerce Expo is a 3-day event featuring a series of curated webinars which primarily focuses on live-streaming eCommerce. 3 key areas that the event focused on are live selling, logistics, as well as payments.

Partners include EasyParcel, GOLOG, iLike, MODEN KOL, MPAY, PayNet, SHOPLINE, Split, TresGo, and Visa. The event is also supported by ACCCIM, eKUD, MAICCI, MATRADE, MRA, MRCA, PERDASAMA, SME Corp and TM ONE.

Janio’s co-founder and Chief Operating Officer, Syed Ridha Ali Madihid closed off Go-eCommerce Expo’s second day by sharing the latest insights and opportunities in Southeast Asian eCommerce and the logistics eCommerce solutions available to Malaysian SMEs.

 

Accelerated by COVID-19, Southeast Asia’s digital economy is expanding, but also shifting to intra-Southeast Asian trade

Sharing data from Google and Temasek, Southeast Asia’s combined digital economy is shaping up to be one of the largest in the world. “ASEAN is the 3rd biggest trading bloc in the world. On top of that, by 2030 our neighbour Indonesia has the potential to be the 5th largest economy in the world. Therefore I strongly encourage intra-ASEAN trade via cross-border eCommerce because of our close proximity to them. We must take advantage of it now rather than later.”

Countries like Indonesia, PH, TH, VN and MY are seeing rising middle classes. This is driven by more young people entering the workforce for the first time and enjoying higher disposable income. With higher disposable income many people have better aspirations which is reflected in the quality and price of products they buy.

COVID’s impact on the market also played a part in increasing cross-border eCommerce between Southeast Asian countries. Prior to the pandemic, countries that people in Southeast Asia commonly bought from included China, Korea primarily for cosmetic products, and the USA.

“We see a rapid increase of cross-border eCommerce throughout this pandemic period but more importantly through intra-ASEAN trade and this is very encouraging. We have seen double-digit growth rates of people buying within ASEAN itself.”

Ali added, “We have deduced that due to the COVID situation, people are buying more from neighbouring Southeast Asian countries they were formerly able to visit for shopping trips. With travel being restricted due to closed borders many people, take for example Singaporeans or Indonesians, who were previously able to go to Malaysia to buy anything they need now turn to online platforms. These include organised eCommerce like brand.coms and marketplaces like Lazada or unorganised commerce such as on TikTok or even Facebook where they can purchase their products accordingly.”

 

With larger populations and lower barriers to entry, Ali recommends Malaysian businesses prioritise expanding and shipping to the Nusantara region of Southeast Asia first

“To simplify things, we like to break down Southeast Asia into two major regions. Indochina consists of Vietnam, Laos, Myanmar, Thailand and Cambodia. The other region is Nusantara which consists of Malaysia, Singapore, Brunei, the Philippines, and Indonesia.” Ali said.

“With regards to ASEAN, we usually encourage merchants when doing cross-border eCommerce to focus more on the Nusantara region. Purely because in terms of demographics alone, the Nusantara region is around 63 to 65 percent of the entire Southeast Asian population of around 650 billion people. On top of that, the Nusantara region has the two biggest markets, one which is the Philippines with 120 – 130 million people, but more importantly Indonesia with 260 – 270 million people.”

He also added that relative to countries in the Nusantara region, Indochina countries tend to have higher barriers to entry for cross-border merchants be it in terms of B2B or B2C shipping. People in Indochina countries tend to strongly support local brands and products and have protectionist trade policies in place. Relative to people in Indochina, people in Nusantara countries are more open to foreign brands and products as Western commerce and social media have a stronger influence in Nusantara countries.

He continued by saying countries in the Nusantara region also have higher de minimis values relative to those in Indochina countries. In customs clearance terms, the de minimis value is the monetary threshold below which fewer or no import taxes and duties are charged on the shipment. What that means is that, depending on the country, small enough shipments can enter the country duty-free. He mentioned that countries with fairly high de minimis values include Singapore, Brunei, The Philippines and Malaysia itself. and You can check out the de minimis values of various countries in Southeast Asia in our Southeast Asia de minimis article.

While Indonesia may have recently reduced their de minimis value from USD 75 to USD 3 – which means that any import into the country faces customs duties and taxes, their market is simply too big to ignore, Ali pointed out. You can find out more details about Indonesia’s de minimis and import and customs tax changes in this article.

 

Malaysian SMEs are well-placed to cater to Nusantara via cross-border eCommerce, particularly Indonesia. The Jom Blanja Malaysia campaign was launched to support Malaysian cross-border online sales into Indonesia

Ali also mentioned that Malaysian exports have strong potential in the Nusantara region, particularly in Indonesia where consumer tastes are quite similar to those in Malaysia. These product categories include health and beauty – particularly halal cosmetics, processed food and modest wear product categories.

He emphasised the size of Indonesia’s market by saying that capturing just 1 percent of Indonesia’s population of 270 million people is massive.

“Even if you just get 0.01 per cent, that is a lot of revenue we’re talking about. Because (Malaysia and Indonesia) close proximity, because both countries have similar consumer tastes and consumer behaviour, there is a massive potential for Malaysian SMEs to take advantage and penetrate the Indonesian market via cross-border eCommerce”

“That’s why I’m excited to present the Jom Blanja Malaysia campaign.”

The Jom Blanja Malaysia campaign helps Malaysian SMEs by letting eCommerce merchants sell and ship their products to their buyers in Indonesia with very little fuss.

Janio is proud to work together with Malaysia Digital Economy Corp (MDEC), MATRADE, EasyStore and Exabytes to support Malaysian SMEs. Janio is the exclusive shipping partner for this initiative, helping you ship your Malaysia based products to your buyers in Indonesia affordably. You can find out more about the Jom Blanja campaign in these upcoming webinars:

 

When it comes to cross-border shipping methods, Ali recommended that Malaysian SMEs start with B2C cross-border shipping, where parcels are sent directly to international customers from Malaysia.

“When shipping B2C, especially for controlled products under health and beauty and processed food, you need not register your company, need not register your product (with relevant local authorities). Therefore, if you are shipping B2C all the additional rules of shipping B2B does not apply. You can immediately sell it to your consumer accordingly. So that’s the advantage of shipping B2C.”

For those who are ready to set up B2B shipping solutions, such as preparing local distribution networks to bring their inventory closer to the market, Ali recommended using a trading house solution.

“Usually, many businesses would find a local partner first and register their businesses locally. You don’t need to that, Janio offers a trading house solution where Janio can become an importer of record for you to import and store your product and, on top of that, be a merchant of record to distribute your product and sell it in all the different marketplaces in Indonesia if they cannot accept cross-border eCommerce.”

We at Janio would like to thank the Malaysia Digital Economy Corp and Malaysia Communications and Multimedia Commission for organising the Go-eCommerce Expo. We are proud to support Malaysian businesses’ efforts to develop their export capabilities through the Jom Blanja Malaysia campaign.

To find out more about our services or what we do, contact us via the button below:

 

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