&dpnnfsdf jo 4pvuifbtutjb jt hpjoh tvqfsopwb...china, or europe, e-commerce sales accounted for...

6/12/2018 Ecommerce in Southeast Asia is going supernova | Yusp Blog

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Southeast Asia (SEA) is becoming the third pillar of growth inAsia after India and China. Estimates project it as becomingthe world’s 4th largest economy in 2050, a three position jumpfrom where they currently stand at 7th. SEA’s e-commerceCAGR is projected at 37.6% from $7 billion to $34.5 billionbetween 2013 and 2018. Additionally, Indonesia is the globalleader in e-commerce growth with an increase of 85% in salesfrom 2011 to 2012.

Feb 09, 2016posted by Huba Gaspar

Ecommerce in Southeast Asia is going

supernova

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We’re in the midst of a remarkable economic explosion as theregion has transitioned from agriculture to manufacturing. Areport by the analysts at Golden Gate Ventures found that thecurrent investment climate in Southeast Asia has strikingsimilarities to that of China in 2005 and India in 2010, rightbefore their respective economic booms. China’s boom wastriggered by a loosening of governmental regulationsrestricting the growth of privately owned companies and Indiasuccessfully rebounded following the Global Financial Crisisthanks to a rapid expansion of global trade. Also worthconsidering is the impact of the region’s integration under theAssociation of Southeast Asian Nations (ASEAN) EconomicCommunity (AEC) by 2015. The AEC will bring about auni�cation of the 10 member states, most notably: Indonesia,Malaysia, Philippines, Singapore, Thailand, and Vietnam, andtheir over 620 million citizens. The result will ideally be thecreation of a single market with limited border restrictions,more prepared to compete on a global scale and potentiallybecoming the world’s fourth largest economy in the nextseveral years. They are looking to mirror the trade bene�ts ofthe European Union without the governing authority orcommon currency to hopefully avoid the EU’s currenteconomic issues.



http://goldengate.vc/news/golden-gate-ventures-announces-us50m-second-fund-for-southeast-asia/





Also worth considering is the impact of the region’s integrationunder the Association of Southeast Asian Nations (ASEAN)Economic Community (AEC) by 2015. The AEC will bring abouta uni�cation of the 10 member states, most notably:Indonesia, Malaysia, Philippines, Singapore, Thailand, andVietnam, and their over 620 million citizens. The result willideally be the creation of a single market with limited borderrestrictions, more prepared to compete on a global scale andpotentially becoming the world’s fourth largest economy in thenext several years. They are looking to mirror the tradebene�ts of the European Union without the governing authorityor common currency to hopefully avoid the EU’s currenteconomic issues.

The Association of Southeast Asian Nations.







With e-commerce in Southeast Asia set to quintuple (5x) by2018, we’re visibly on the cusp of an enormous explosion in e-commerce growth. In more modernized places like the US,China, or Europe, e-commerce sales accounted for around 7%of retail sales. In SEA, it has been reported at less than 2%. It’sa region that’s teeming with opportunity, but not withoutconsiderable barriers to entry into the market. Traditional e-commerce giants like Alibaba and Rakuten are struggling toadjust their traditional business models fast enough tocompete; leaving a void for VC-backed startups and more agilecompanies to �ll.

Sustainable Growth from a Youthful Population

The majority of Southeast Asia’s population is under 30.



http://www.frost.com/prod/servlet/press-release.pag?docid=291335203





China and India’s economic booms are forecasted to slow totypical global growth rates of around 2% by 2033 rather thanmaintain the impressive growth rates they’ve seen in recentyears. Southeast Asia will now take the torch and lead thecontinent in terms of rapid economic growth. Fears ofSoutheast Asia simply being on the verge of an economicbubble can be subdued when you consider what the potentialoutlook for the future is with their rapidly growing and youthfulpopulation. Over 50% of the population is less than 30 yearsold, hinting at SEA’s potential to take China’s place as themanufacturing giant of the world. China’s aging population ismaking it more di�cult to �nd able-bodied workers to �llfactories and maintain production. In 2013, Manufacturingexperts rated Vietnam and Indonesia as being the top twomost exciting countries for growth in the manufacturing sectorover the next 5 years. SEA’s abundance of youthful humancapital is also leading the way for the region to become an IToutsourcing hub. The Philippines is currently the world leaderin the business process outsourcing (BPO) industry.Manufacturing and outsourcing growth in SEA is boostinglocal economies and lifting scores of the younger populationinto a growing middle class with more disposable income thanever.

Lazada Leads the Way in e-Commerce Retail



http://thediplomat.com/2014/10/us-economists-warn-on-china-india-growth-slowdown/

http://www.bdg-asia.com/southeast-asias-young-populations-business-opportunities/

http://www.bdg-asia.com/manufacturers-set-sights-vietnam-indonesia/





Rocket Internet is a Berlin-based start-up conglomerate thathas often been criticized for their copycat approach of takingthe business model of an existing, successful company andthen replicating it in an emerging market. Despite thecriticisms against their business model, you can’t deny theirexemplary track record, churning out over 75 differentcompanies since their launch in 2007 and currently seeking aninitial IPO valuation of up to $5.4 billion. With their a�nity foremerging markets and ability to get new businesses up andrunning in ridiculously short amounts of time, it’s no surprisethat they currently have the most dominating presence in SEA.In 2012, Rocket Internet entered the region with the launch ofan e-commerce business named Lazada, commonly referredto as the Amazon of Southeast Asia. Despite showing$152.5m in losses in 2014, various foreign and domesticinvestors have valued it at around $1.3 billion, and prospects ofpro�tability are looking up for the future. However, thisprogress hasn’t come easily. To overcome many of the hurdlesof doing business in Southeast Asia, Lazada has partnered withaCommerce, an e-commerce logistics startup, to have theirown �eet of vans and motorbikes in an effort to supersede theunreliable local shipping companies. aCommerce has beenoffering end-to-end technology, marketing, and logisticssolutions since 2013. Companies venturing into SEA wouldhave di�culties making individual partnerships with differentcompanies in each country in order to serve their shipping andlogistics needs. aCommerce saw this need and has becomethe single partner for businesses wishing to launchsimultaneously in the region. With clients like Nestle, HP,L’Oreal, Groupon, and Line, aCommerce has demonstrated a

Lazada – a key player in eCommerce in Southeast Asia.



http://techcrunch.com/2014/11/29/lazada-rocket-internets-amazon-clone-in-southeast-asia-raises-250m-led-by-temasek/

http://www.forbes.com/sites/susancunningham/2015/05/12/rockets-lazada-and-zalora-lost-235-3-million-in-2014-but-are-moving-toward-profitability/

http://www.forbes.com/sites/ryanmac/2014/11/29/southeast-asian-amazon-clone-lazada-raises-249-million/

http://www.acommerce.asia/portfolio/lazada/





pro�ciency in their abilities to alleviate pains for e-commerce�rms in SEA.

The World’s Best Innovation Sandbox

With over 620 million people, 11 countries, seven majorlanguages, and 20,000 islands, successfully entering thismarket is no easy task. It’s got a youthful population that’smostly under 30 and a strong middle class with ampleamounts of disposable income. A colorful array of startups aresuccessfully providing real value to their customers throughtheir innovative products and services. Teeming withopportunities, the environment in Southeast Asia is breeding aculture of innovation as all �rms appear to be working togetherto collectively overcome the di�culties of the region. Largeinvestments are being made into the shipping infrastructure, auni�cation under the AEC is hoping to remove barriers toincrease trade, and companies are quick at work devising away to either provide Cash-On-Delivery more e�ciently ormake the electronic alternatives more attractive.

This article was originally featured on August 10, 2015, on theblog of Gravity Research and Development, the companybehind Yusp. Gravity R&D is a technology expert servingomnichannel recommendations for major clients on 5continents.



http://www.gravityrd.com/





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