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The international e-commerce war started in southeast Asia

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The international e-commerce war started in southeast Asia

Source: 21st century economics
The annual online shopping carnival at Lazada, a local e-commerce firm, is now in full swing. Every year from the "double eleven" to "12-12", it is Lazada's one-month network. Lazada has sold 6.5 million items on its first day of activity this year, with a total volume of $123 million, a 171% increase from a year earlier, showing the potential of the southeast Asian e-commerce market, according to Lazada's website.
In a 2016 joint report, Google and temasek holdings, the Singapore sovereign wealth fund, predicted that the southeast Asian ecommerce market would total $88 billion by 2025, with annual growth of 32%. The total number of e-commerce markets in all southeast Asian countries will exceed $5 billion, of which Indonesia's e-commerce market will total $46 billion.
E-commerce companies, including alibaba and amazon, want a share of the region's market. But Chinese and western companies have taken a very different approach when they enter the southeast Asian market. Chinese e-commerce companies such as alibaba and jd.com have chosen to open the market by investing in local e-commerce in southeast Asia. Amazon directly builds warehouses and self-owned logistics in Singapore.
Hong tao, a professor at the school of economics and economics at the Beijing university of commerce and industry, analyzed in an interview with reporters from the 21st century economic herald, which has the advantages of entering the southeast Asian market in different ways. "Investing in a stake is a familiar business model for alibaba, and has been used by alibaba at home. Amazon's proprietary approach to southeast Asia is more likely to ensure the quality of products and services.
However, southeast Asia is not a single market, and the different market conditions of different countries in southeast Asia are challenging the local strategies of e-commerce enterprises. Hong tao believes that companies should "adapt to local conditions" when entering the southeast Asian market, while not ignoring the actual needs of local users.
Status quo: amazon has built its own proprietary Chinese enterprises to invest in local enterprises
Zhang hongtao, a Singaporean living in Singapore, told the 21st century economics reporter that he could "not go out and buy food" recently. It is the Prime Now service that amazon launched in Singapore this year.
Prime Now offers a range of products from fresh food to home appliances, and promises to deliver goods within two hours. Amazon spokeswoman Amanda Ip told 21st century business herald that the launch of Prime Now in Singapore is the first time amazon has launched a retail service in a country that has not previously sold its own network. For now, Singapore is amazon's only market in southeast Asia. Until now, customers in Singapore can only buy some of the selected items on amazon.com, and some of them require high international shipping costs.
Unlike amazon, which built its own proprietary model directly in Singapore, Chinese companies are more inclined to expand their markets in south-east Asia in the form of investment holding local companies.
Alibaba has already spent more than $2 billion on Lazada, which has a 83 percent stake. In June this year, alibaba also through Lazada platform and its logistics, warehousing, distribution system, in Singapore, Malaysia, Indonesia, the Philippines and Thailand launched taobao hits "channel, output Chinese goods to local customers.
In addition, there are jingdong on the battlefield in southeast Asia. In November, the Bangkok online fashion brand Pomelo received $19 million in financing, and jd was the leading investor in the round. Jd.com has also set up a $500 million joint venture with Central Group, a Thai entity retail giant, to help sell its Chinese products to Thailand.
For two very different business model, many experts believe that questioned this is decided by the enterprise itself "gene", each enterprise all took their most familiar patterns into the southeast Asia market, proprietary self-built is amazon consistent business model, and alibaba has been as a connection platform for consumers and companies. "The business models of amazon and alibaba have been different from the beginning, and their international operations have continued their own characteristics." Zhang zhouping, director of B2B and cross-border e-commerce at the China e-commerce research center, told the 21st century economic herald.
In order to quickly grab market share in southeast Asia, alibaba is the most efficient way to invest. In addition, hong tao also told reporters on 21st century economic report that alibaba's move is to attack the business model of light assets to control market risks.
However, when the consumers in the southeast Asian market reach a certain number, the consumer's shopping experience becomes the key to the competition of e-commerce enterprises. "Regardless of the business model, price, quality and service will be the three most important aspects of consumer care. From this perspective, amazon has some advantages. Amazon's self-built model will make its logistics and quality of goods more manageable. "Zhang added.
Challenges: regional differences and talent shortage
However, all countries in southeast Asia are different in both geographical and market conditions. In addition, the infrastructure of most countries in southeast Asia is still lagging behind, adding to the difficulties of logistics and delivery delivery. This means that e-commerce companies need to develop different market strategies based on different cultures and environments when they enter southeast Asia.
In addition to investing in Lazada in Singapore, alibaba's strategy in Malaysia is to build a logistics hub. Near the Kuala Lumpur international airport, alibaba has set up a super international logistics hub (eHub) and a matching electric business platform, for cross-border trade Malaysian small and medium enterprises to provide logistics, warehousing, customs clearance, trade, finance and a series of supply chain facilities and business services.
And Thailand has become the focus of alibaba's expansion into digital technology. It is understood that alibaba and the Thai government will explore cooperation opportunities in the eastern economic corridor project, to help Thailand to become southeast Asia digital technology and regional data center, and is expected to begin operations in 2019.
Singapore's consul general in guangzhou, CAI jiatan, told reporters in the 21st century that it is unrealistic to establish a large logistics center in Singapore because of its small size. But Singapore electricity enterprise network in Singapore and even the whole southeast Asia, sales channels, logistics and other aspects have an advantage, so alibaba acquired Lazada, with their open the market of southeast Asia.
In addition, the shortage of talents in the e-commerce industry in southeast Asia is another challenge for e-commerce companies. According to Google and temasek, according to a report issued by the many successful southeast Asia local electricity still rely on talent from China or the United States team in the business, among them, the executive level of talent shortage in particular.
Amazon's choice of Singapore as the first stop in southeast Asia is partly because Singapore is the center of innovation and talent cultivation. "Amazon wants to be able to boost its local sales network in Singapore," Amanda Ip, an amazon spokesman, told the 21st century economic herald.
Cultivating local talent is also part of alibaba's strategy in southeast Asia. It is reported that the business school will launch a series of digital e-commerce skills courses in Singapore, mainly for small and medium-sized entrepreneurs. Besides to on-the-job training, alibaba and the university of the Thai chamber of commerce (UTCC) also set up a partnership, the electricity for Thai students imparting knowledge, and set up a nationwide talent training plan, training ten thousand people to make them familiar with digital technology, thus helping Thailand business transformation and industrial upgrading.
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