Indonesia is ASEAN eCommerce sleeping giant
Indonesia is the most-promising ASEAN eCommerce market, according to Hong Kong-based consultant Paul McKenzie.
He told a seminar in Bangkok, organised by brokerage and investment group CLSA, that Indonesia has the greatest potential because of its developing infrastructure and private equity advantage.
Thailand is a little behind, he said, with the eCommerce landscape growing but not to the same scale as Indonesia.
“It’s simply too early right now for The Philippines – there are not enough big and efficient companies in the market, and Malaysia’s market is just too small,” said McKenzie. However, Malaysia had less of a potential void for eCommerce as offline retail penetration was even higher than China.
His talk focused on the “e-liftoff”’ of ASEAN countries, corresponding with a CLSA report published last year, and he predicted that the ASEAN eCommerce market would grow in terms of IPO, which would make it more appealing for investors.
He also spoke about the Line app being essential to eCommerce in the ASEAN region. “More than 60 per cent of Thais 14 years and older are on Line, and mobile is the future of online shopping.”
He predicted that within the next few years, mobile will be even more important in ASEAN than it now is in China. He said a third of online transactions were made on mobile, and 50 per cent of online browsing was done on mobile, lagging behind China by only a year.
He said further progress was being hindered by slow data speeds, with users complaining about transactions being dropped and pages not loading. Another problem was that most shoppers in the region did not have credit cards.
McKenzie said ASEAN countries had being doing well with delivery in the main centres, which meant there was a market for more warehouses or logistical services.
Meanwhile, 1200 retailers, eCommerce and fulfilment company representatives gathered at the two-day Last Mile Fulfilment Asia conference in Singapore. Speakers included CEO Paul Srivorakul and CLO Mitch Bittermann from the Thai eCommerce solutions provider aCommerce Group, which has started expanding in Indonesia.
“The changes in the Indonesian market are happening much faster when compared to other regions in Southeast Asia,” Srivorakul says on a company blog. “A lot of investment is taking place in Indonesia’s eCommerce infrastructure, cash-on-delivery networks and third-party logistics (3PL) systems.”
The company has a presence in four countries in Southeast Asia: its home market as well as Indonesia, The Philippines and Singapore. Of its 200 clients, 120 are in Indonesia. Major clients include BerryBenka, Blibli.com, Elevenia, Mitra Adi Perkasa and L’Oreal. The company has about 500 employees in Indonesia, and runs two multi-client fulfilment centres as well as a 5000 sqm fulfilment centre for Lippo Group’s eCommerce arm MatahariMall.
The company is also preparing to launch a four-level fulfilment centre in the next two months, which will increase the country’s warehouse capacity by 17,000 sqm, bringing the total to 32,000 sqm.
No related posts.