Janio at eCommerce Expo Asia 2019: Tapping into Southeast Asia's eCommerce Potential

Benedict Leong

Janio at eCommerce Expo Asia 2019: Tapping into Southeast Asia’s eCommerce Potential

Janio’s VP of Engineering, Nilesh Sadarangi (2nd from left) together with the moderator and panelists at the eCommerce Expo Asia’s Techerati Keynote Theatre, Marina Bay Sands

This October kicked off to an amazing start with us attending eCommerce Expo Asia 2019 at Marina Bay Sands, Singapore on October 9th and 10th. Our very own VP of Engineering, Nilesh Sadarangi shared insights on Cloud Expo Asia’s Techerati Keynote Theatre’s Panel: Disruptive Technologies Series II – Digital Transformation: Realising Future Opportunities. On the panel, Nilesh shared about how big data can help companies realise future opportunities, such as finally overcoming the issue of Southeast Asia’s fragmented supply chain.

Partly due to many Southeast Asian key markets being divided along multiple islands, getting effective logistics coverage could be daunting in this region. Getting decent coverage on a budget requires a lot of back-and-forth between multiple logistics partners in different parts of the region. This becomes a little more manageable if one uses premium third-party logistics partners, but that could quickly get expensive.

Different logistics partners have strengths in various parts of the region. By capturing this data from our various shipping partners on our online platform we’re able to choose the shipping partners for each of our customers’ shipments, giving them all the geographical coverage their online stores need.

Tech plays a role in making these services simpler to access too. In eCommerce for instance, tech-based companies can integrate and automate most of these interactions with local shipping providers, giving merchants a single touchpoint to manage all their deliveries.

This way, we make eCommerce delivery across multiple Southeast Asian markets accessible and manageable, opening the door for eCommerce merchants to more easily expand across the region. The end result helps us build a logistics network that provides the infrastructure to help businesses scale their operations in Southeast Asia quickly and reliably.

These weren’t the only insights to be found at the event. eCommerce Expo, being one of the premier international eCommerce events around, was chock full of industry veterans giving their insights and sharing about their respective specialties and industries. Here’s a couple of key takeaways we took from the event:

 

eCommerce Growth in Southeast Asia is Accelerating

The refrain from Google and Temasek’s annual report on Southeast Asian eCommerce 1 might be getting more common now: Southeast Asia’s eCommerce economy is really, really big. With predictions that get higher every year, it’s now predicted to reach USD 100 billion by as early as 2025. Singapore and Malaysia are known as mature markets and tend to be profit centres for most eCommerce businesses in Southeast Asia while markets like Indonesia, Thailand, Vietnam and the Philippines are seen as growth markets.

On the other hand, there’s a little more to it than the usual large Southeast Asian economies.

During the panel discussion on Southeast Asia: Breaking Through Regional Borders, it was highlighted that international developments with wide-reaching impact like the US-China Trade War is changing where the world’s factories are going. Manufacturing has become more expensive in China due to tariff hikes, such as a 31% tax for beauty products going into the US from China which has been eroding profits.

As a result, many companies are exploring other alternatives, some of them including Southeast Asian countries. Vietnam, Indonesia2 and also countries like Myanmar3 are now seeing a surge in manufacturing plant construction.

This is helped by other developments like the ASEAN Single Window 4 which simplify customs clearance within Southeast Asia, and the Regional Comprehensive Economic Partnership talks are also picking up steam5.

If the RCEP talks go well, it’ll be an economic agreement which involves 16 countries in the Pacific region, including notable economies like China, India, Japan as well as ASEAN nations. All this point to a lot of potential for intra-Southeast Asian trade and higher inter Asia trade as well.

 

Riding the Southeast Asian Wave

The Southeast Asia: Breaking Through Regional Borders panel discussion also discussed that there is now a growing need for businesses to work with enablers in Southeast Asia, similar to the trade partners one needed when entering China’s online market for the first time.

With how complex and diverse the different markets in Southeast Asia are, there is an increasing need for eCommerce businesses to find ‘enablers’ who can help them effectively penetrate these markets.

We saw something similar to this when China first started opening up to foreign businesses. Enablers are strategic partners who can help navigate the different local landscapes: regulations, language barriers, cultural nuances and even finding the right online channels or online marketplaces for partners that businesses otherwise would struggle with otherwise.

This ties in with our own findings as well. When talking to eCommerce merchants at eCommerce Expo, we found what are two major international expansion concerns:

  • Lack of market knowledge
  • Lack of knowledge in rules and regulations, such as customs clearance

Merchants can deal with these issues by looking for strategic partners who can act as both a fulfilment partner and a market entry partner for people looking to expand in Southeast Asia. For instance, ones with have customs clearance and logistics expertise to help merchants smoothly get their parcels into the hands of their target market.

To deal with the lack of market knowledge, merchants can look out for partners who exhibit and host multiple events to help provide insights into up-and-coming Southeast Asian markets that merchants can enter, such as Indonesia.

Customer-centricity is Key, but What are Some of the Risks?

A few talks at eCommerce Expo also touched on a major trade-off that eCommerce merchants need to take into account – balancing a great user experience on their eCommerce sites or protecting their users and themselves from risks like fraud. Two such talks were the Marketing theatre – The Future of CX: Engaging the Channel-less Consumer and the Cross Border Theatre’s Panel Discussion – Broaden Your Horizons: Manage Risks and Growth.

The “Future of CX” talk highlighted the importance of keeping the consumer in mind by providing a seamless consumer experience. His Courts example highlighted how integrating the offline and online experience for customers and making the user experience truly omnichannel boosted sales for the company.

As for the “Managing Risks and Growth” panel discussion, it was all about balancing risk. Businesses are exposed to multiple types of risks, such as operational risks and business risks. One such operational risk is payment fraud. Protecting against such a risk requires inserting validation steps and checks during the checkout process, which could turn off some users and result in abandoned carts though.

Other risks would include failure in the execution, delivery, and process management and also having insufficient information about your product’s demand in the country. Fortunately, these can be mitigated through the right strategic partners.

It’ll be good to look out for shipping partners who can help you with this. For instance, if you want to test the market for your online store’s products before you commit heavy investments, shipping partners like Janio can help you get your feet wet through our cross-border shipping model. This way, you can test real demand for your product before you choose to invest in more asset-heavy delivery model.

Overall, eCommerce Expo 2019 was an event packed with great discussions and insights for all players in the eCommerce industry. We were very glad to have the experience of sharing our thoughts on the Techerati Keynote Theatre. If you’d like to know about the work and events that we do for the eCommerce industry, or if you require shipping solutions, do reach out to us on our contact page!

References

  1. Temasek: Google, Temasek, Bain & Company e-Comony SEA 2019

  2. South China Morning Post:US-China trade war manufacturing exodus creating boom times for Chinese logistics companies
  3. Business Times: To dodge trade war, Chinese exporters shift production to low-cost nations
  4. Business Times: Asean Single Window – a digital platform to simplify customs clearance
  5. Jakarta Post: RCEP countries aim to strike a balance on e-commerce ahead of trade deal conclusion

 

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