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

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

In the first half of July, Asia witnesses tech and eCommerce optimism, Chinese eCommerce platforms compete within China and outside, and tensions of the US-China trade war finally begin to fizzle.

Asia’s Tech Triumphs and eCommerce Excitement

By 2020, 66 per cent of the world’s middle class is expected to be from Asia. Equipped with newfound wealth and spending power, Asians are reported to be leading in tech adoption¹ globally, and are especially interested in products that are novel, fun and sophisticated. Their increased spending power will allow them to continue to explore more new tech products, which is an encouraging sign for eCommerce merchants looking to sell electronic products in Asia.

Additionally, Thailand’s eCommerce is estimated to hit $13 billion by 2025², a huge surge from last year’s value of $3 billion. The estimation is based on a strong global demand for Thai products. Thailand’s eCommerce market is seeing vibrant growth and ranks third in terms of market size in Southeast Asia, following Indonesia and Vietnam.

The top five exports sold through cross-border trade in Thailand’s eCommerce are jewellery and watches, health and beauty products, auto parts, home and garden, and collectibles. As eCommerce continues to grow exponentially, Southeast Asia will account for 20% of worldwide eCommerce by 2022.

Chinese eCommerce Platforms Battle it Out, Within China and Beyond

Pinduoduo, a start-up founded in 2015, has cemented its position as China’s second largest eCommerce player³. For the past 12 months, Pinduoduo’s daily active users (DAU) have been second only to Alibaba’s Taobao, emerging with 135 million DAUs during the recent mid-year sales festival ‘6/18’. Alibaba’s Taobao ⁴ retained its top spot at 299 million, and JD came in third with 88 million DAUs.

Adding to the optimism surrounding Alibaba, the eCommerce platform is ramping up its international commerce expansion with the launch of an English-language portal on Tmall⁵. This move is expected to double the number of global brands on its flagship retail site from 20,000 to 40,000 in three years. Alibaba aims to lure more merchants and businesses from around the world to sell high-quality imported products to consumers in the world’s second-largest economy.

US-China Relations Finally Begin to Thaw

At the G20 Summit on June 29, the US and China have agreed to return to the negotiating table, with US President Donald Trump promising to withhold further tariffs. A 25 per cent tax, imposed by the US on US$250 billion worth of Chinese exports, has been one of the major points of conflict between the two countries. Going forward, Beijing expects American tariffs to be completely eliminated⁶ for a trade deal to happen.

On the other hand, as the situation is likely to remain volatile, it may not be that simple for both countries to settle on a deal. For instance, despite calling Huawei a threat to US national security⁷ and placing it on a trade blacklist a month ago, Trump has mentioned he’ll lift the ban and may allow American tech companies to resume selling some of their components to Huawei. It still remains to be seen how much the situation will improve in the upcoming weeks.