Janio Bi-Weekly News Round-up | Mid-February 2019

A curation of the latest news in e-commerce, logistics, and tech in Southeast Asia and beyond.

Leading up to the middle of February, a local challenger rises with India’s disruptive e-commerce law, Alibaba makes its move towards further developments in Singapore, and Indonesia’s logistics challenges could set back e-commerce growth.

India’s e-commerce development after new law’s disruption

Ambani to invest US$1.4 billion in West Bengal to fund e-commerce expansion¹. Following the disruptive e-commerce law that disadvantages foreign giants like Amazon, Reliance Industries turned out to be the local firm that will take a slice of India’s e-commerce pie. Mukesh Ambani, the chairman of Reliance Industries, announced that the company will use its investment money to fund its e-commerce venture. This e-commerce arm wants to connect small merchants with their retail network and warehouses, helping them better manage their inventory and potentially giving them an opportunity to grow.

Meanwhile, Amazon’s grocery service slowly returns in India after e-commerce disruption². Many of the products in Amazon India were forcefully removed after India’s new e-commerce curbs³. However, the platform has recovered after restructuring to be compliant with the new law. Some of Amazon’s products are now sold via third-party vendors where Amazon doesn’t have direct or indirect equity stakes.

Alibaba taking bigger strides in Singapore

Alibaba Cloud invests in future Singapore IT talent⁴ by partnering with SMU to launch a series of courses to upskill working professionals in Singapore. After the participants graduate from the training course, Alibaba hopes that the participants will continue to learn and share their findings on Alibaba’s own platforms. The courses will be conducted by Alibaba Cloud scientists and will focus on using real-world case studies to offer actionable insights.

Lazada folds online grocer Redmart into its own app⁵. According to a Lazada spokesperson, this move is a response to their customers’ request and demand for a wider range of goods on both Lazada and Redmart’s platforms. The integration also marks Lazada’s plan in becoming Southeast Asia’s biggest e-commerce ecosystem.

Indonesia’s Challenges in Budding E-commerce Industry

Poor logistics hold back Indonesian e-commerce from ‘quantum’ leap, according to a study by Accenture. Indonesia has all the ingredients needed for flourishing e-commerce growth, but the country’s poor logistics makes delivery to remote areas outside Java costly. This problem is further compounded with the archipelago spread out over 17,000 islands. Sorting out this problem could save 11% to 25% on products shopped online compared with brick and mortar outlets, and platforms like Ralali and Tokopedia are leading the way by working with warehousing services to reduce last mile delivery costs.

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