South East Asia – The Hidden E-Commerce Secret
Many small businesses are seeing the opportunities in expanding their e-commerce business to Asia. With all the focus on China – which I continue to stress is a challenging market to penetrate – many forget the golden opportunities that lie in South East Asia.
[Tweet “Malaysia and Singapore are a portal for other Asian countries and set the trends for the countries in that area.”]
The United States is a go-to online destination for many Singaporean and Malaysian trendsetters who want to have access to American goods and latest trends.
Singaporeans are shopaholics! Shopping malls are found all over Singapore. Singapore’s consumers are very price sensitive and online shopping offers consumers the freedom to purchase goods and services overseas at a competitive price. This has boosted cross-border e-commerce.
[Tweet “An estimated 55% of all e-commerce transactions in Singapore are cross-border.”]
This percentage is much higher than in other Asian countries. Due to its open economy and its modern infrastructure, Singapore is very well connected to the rest of the world. Mobile e-commerce in these two countries is extremely popular, as Singapore and Malaysia have record high mobile & internet penetration. It did not take long for Singaporeans to follow European and US e-commerce trends. Online shopping for luxurious articles is cheaper than buying fashion items in local stores. This resulted in an enormous increase in retail e-commerce over the past five years.
A few major retailers are dominating the e-commerce space in Singapore. In July 2013, TaoBao Singapore had around 280,000 registered users. Since Alibaba is now targeting both countries, a significant increase in cross-border ecommerce with China can be expected. Rakuten, Japan’s largest e-retailer, also launched a Singapore website last year. Blogshops are also extremely popular in South East Asia. Blogshops are sites usually owned by female fashion aficionadas aged 16 to 20. They often find clothes and other items in Bangkok and resell them through Ebay, Taobao, Tumblr and other venues. These sites are extremely popular online shopping destinations.
When expanding to South East Asia there are a few flaws to consider. Secure payment means are not as trusted as they are in North America. A survey conducted by Paypal revealed that the major concerns of Singaporean consumers when shopping overseas was related to payment security, identity theft and currency fluctuations. The other potential barrier is shipping. While Shipping in Singapore is easy, Malaysia has a set of complex rules and regulations most e-commerce stores must abide too. Shipping to South East Asia is viable, but can also be extremely costly.
Marketing online in South East Asia is not unlike marketing your e-commerce store in the US. Singaporeans & Malaysians are extremely active on social media. They research online before purchasing and are heavily influenced by social media when considering a purchase.
Advertise on Facebook as it is the most active social network. And as always, look for influencers with whom you can start relationships and introduce them to your product.
Building trust is absolutely crucial to expanding internationally and marketing in new countries.
South East Asia is an attractive destination to expand your e-commerce business with it’s connected, trendsetting demographic and already booming e-commerce growth. All of these things combined make Malaysia and Singapore great countries to test how receptive the Asian market will be to your brand.