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

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

Coming off the highs from the Q2 sales announcements, Chinese eCommerce sites are making strides to explore new possibilities, Alibaba bounces back with strategic buys and launches, and Amazon answers back to Ambani.

Chinese Companies Make Strides, Counters Trade War Damages

As the US-China Trade War starts to eat into Chinese Original Equipment Manufacturers’ (OEM) margins, their new brands are finding more success in their own local markets¹. These OEM’s sales to American brands were affected by the tariffs from the escalating trade war. However, by building their own brands and selling on websites like Pinduoduo, they are finding success with the local market, prompting them to step up their efforts in catering to the Chinese market.

Taobao Opens VR-Powered Shop in Singapore’s Funan Mall². The Chinese platform’s permanent offline launch was preceded by a successful pop-up store with NomadX last year. With this new storefront, customers are able to visualise a piece of furniture in their own room using VR, and Taobao’s representative says that it’ll bring to life Taobao’s “vision of seamless integration between online and offline commerce”.

With Singapore’s pro-trade policy and geographic position as a gateway to Southeast Asia, it wouldn’t be surprising if Chinese OEMs and Taobao would try to replicate this success in other Southeast Asian markets.

Alibaba Buys Chinese eCommerce Unit, Launches New Business in India

Going in tandem with the Chinese OEMs’ strategy to target the local market, Alibaba has bought NetEase’s Kaola in a US$ 2 billion deal³. This deal is Jack Ma’s answer to local demand for quality products from abroad. Although Kaola is well-positioned with growth on its side, Forbes reports that the cross-border eCommerce scene will heat up as more companies look to grow their revenue streams from local consumers.

Meanwhile, Alibaba has also been eyeing the Indian market, with plans to launch an eCommerce business through subsidiary UCWeb⁴. While Alibaba has had its stakes with Paytm Mall previously, Alibaba’s representative has said that this new venture isn’t going to conflict. UCWeb’s VP was quoted saying that it is trying to “start an innovative business model relating to eCommerce.” For now, the website will be selling movie tickets online.

With this inward turn and redirection from Chinese companies, it’s quite likely that Chinese OEMs, Alibaba, and Taobao will increase their aggressive expansion into Southeast Asia, and eventually South Asia in order to capture market share outside of trade war regions.

Amazon Answers Back to Ambani with Major Local Acquisitions

Amazon Goes Full Throttle to Take on Asia’s Richest Man, Mukesh Ambani⁵. We’ve previously seen speculation that Amazon is in talks to acquire a minority stake in Reliance Retail, but the American company is moving towards acquiring other companies to match Reliance’s current fire power.

Amazon has unveiled an office campus in Hyderabad that can accommodate 15,000 employees, and has looked towards getting a 49% acquisition of Future Coupons and a full acquisition of UberEat’s Indian business. While all of these assets will add to Amazon’s current arsenal, Ambani still has the upper hand as Reliance is already exploring online to offline eCommerce models.

With Taobao and Reliance’s involvement in creating O2O shopping experiences, it’s safe to say that the O2O and omnichannel eCommerce trend will heat up around the region.

That’s all for this news round-up! See you in the next one!

Want to clear customs in Southeast Asian countries like a pro? Get our customs clearance guide to find out how!

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.