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

Hui Shan Tan

Janio's Bi-weekly News Roundup

As we approach the middle of Q2 2019, eCommerce players in SEA forge strategic partnerships, mobile payment usage skyrockets in Asia, Chinese logistics experience boom times in US-China trade war, and May is no more in June.

Strategic Partnerships Propel SEA eCommerce Players

Indonesian tech unicorn launches ambitious regional expansion. Bukalapak, a tech start-up whose valuation of more than US$1 billion makes it a rare unicorn company in Indonesia, has set out on an ambitious regional expansion strategy to be Indonesia’s first eCommerce site available internationally.

Through its BukaGlobal app, Bukalapak connects four million small and medium-sized enterprises in Indonesia with shoppers in Singapore, Malaysia, Hong Kong, Taiwan and Brunei. To break down barriers such as access, infrastructure and connectivity that hinder entrepreneurs in Indonesia from competing on a global playing field, Bukalapak has partnered with Janio to handle cross-border shipping across the region. For an in-depth commentary about Indonesia’s export potential, read our series of articles here.

In another partnership, Beauty product firm Amorepacific and eCommerce company Lazada Group have signed a memorandum of understanding (MOU) to increase their brand outreach. The MOU will allow both companies to launch new brands and collaborate on various projects such as exploring new retail business that combines online and offline channels. Amorepacific also aims to accelerate growth and increase market share in Southeast Asia, a key global strategic region for the company, by tapping on Lazada’s network to display its products to a wider consumer base.

Asia Leads the Way in Mobile Payment Usage

Rise and rise of mobile payments in Asia: a global survey published by PricewaterhouseCoopers (PwC) confirms that Asia prevails as the leading growth region for mobile payments. At 86 per cent, China continues to have the highest rate of penetration while countries such as Vietnam and Thailand are seeing over 60 per cent of consumers making mobile payments, which is a considerable increase in user adoption. Singapore saw a more moderate uplift in mobile payment usage from 34 per cent of the population in 2018 to 46 per cent in 2019.

The rise in mobile payments is part of a broader surge in payment services across the globe. Consumers and businesses alike are benefiting while mobile payment companies compete to provide lower-cost remittances, higher-speed transactions, and simpler user interfaces. Rapidly evolving technology, high consumer demand, and a well-calibrated regulatory framework are key factors for the acceleration of payment services in Asia.

US-China Trade War’s Unlikely Winner: the Chinese Logistics Industry

Despite a warning by Trump not to retaliate, China has announced that it will impose tariffs on $60 billion worth of American products following President Trump’s decision to raise duties on $200 billion in Chinese products to 25 per cent from 10 per cent. The tariffs China intends to slam on US goods will range from 5 per cent to 25 per cent according to a statement by the Tariff Policy Commission of the State Council, and in large part will target the American agriculture industry.

While the two global superpowers are embroiled in conflict, Chinese logistics companies have emerged as victors as the US-China trade war creates boom times for them. Pre-existing woes of manufacturing in China, such as tight environmental regulations and increasing costs of labour, have been exacerbated by the trade war with Trump’s tariffs. The higher costs of production in China has accelerated manufacturers from various sectors to downsize or shift from China to neighbouring countries such as Vietnam, Indonesia and Thailand. Chinese companies with the capability to operate cross-border logistics, handle large-scale manufacturing equipment, and manage custom clearance are reaping the benefits of this manufacturing exodus in China.

May Leaves in June

Theresa May resigns over Brexit. Theresa May, who had been struggling to get parliamentary support to implement the deal she had agreed with the EU on how UK would leave the bloc, announced that she was stepping down as Prime Minister on 24 May. Opening the position for a new Prime Minister, both the UK and the EU will face another period of uncertainty with regard to the direction of Brexit. If a strong Brexit supporter wins, they might be more likely to insist that the UK leave before the current 31 October deadline, or leave even if it cannot agree on a deal with the EU. On the contrary, the next Prime Minister might also be opposed to no-deal Brexit, and be open to the UK being more closely tied to the EU after it leaves.

The fact remains that there does not seem to be a majority in Parliament for any single Brexit option, bringing ambivalence to the future of the UK and the EU.

That’s all for this news round-up! In the meantime, to stay updated with the latest news and our articles, consider signing up for Janio’s regular newsletter.

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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.

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