The answer is no, not in a big way.

Yes, Amazon may have launched Prime in Singapore, but it is not a secret that they have been running sourcing operations all over Southeast Asia. For example, their Thai operations have been running for at least two years now. So, it is no surprise that they now turn to Vietnam, as reported here, but only as a sourcing hub.

A good start, but regulations will not change overnight

Amazon’s entry into Singapore was relatively straightforward due to clear regulations. We at Momentum Works believe that while startups are generally fine with unclear regulations, and see the lack of policing as opportunity, bigger companies generally tend to avoid such markets.

Fado.vn – Offers its unique services that helps shoppers buy from Amazon and ship to Vietnam

That said, it is a good start – even if it is just sourcing for products. In the meantime, local cross-border players such as Fado.vn which we covered previously in our Vietnam report should be able to breath a sigh of relief. It is fair to say that Vietnamese regulations will take its time to adapt, or change. The business of cross-border ecommerce is complex and profitable, but its success will hinge upon government policies, to say the least.

Partnership with Facebook the way to go?

While cross-border regulations may take years to see any progress, there are still tonnes of opportunity – take Lazada for example. Why worry about the business of importing when you can have local sellers do the work for you?

It is already an open secret that Facebook is already partnering with Amazon to take on larger competitors in other space. Could they consider working with Facebook now that it has launched its own marketplace? We say do not be so quick to take the cards off the table.

Amazon has almost zero foothold in Southeast Asia’s ecommerce market (unless you consider Amazon Web Services?), and many are wondering when would they start being aggressive in this market of 641 million potential customers? One may argue their entry into Singapore as a showcase of massive firepower. But the waves have since calmed, only to reveal that they have possibly overreached.

After all, having massive selection of products without users is pointless (Amazon website is not hugely popular in Southeast Asia). Only Facebook has the users.

Conclusion

As we have repeatedly iterated – 2018 is the year to watch the ecommerce market once again. Amazon’s entry into Vietnam may be just one piece of the puzzle. The way we see it, Vietnam’s entry is pivotal, as Amazon already has a base in China – making it easy to export goods to China, and it will not be difficult to pull a reverse once Vietnamese policies become clear.

After all, it only takes 2 days to ship goods from China to Vietnam by land. Imagine the scalability of that! Low cost shipping at its best. Companies like Miniso are already milking this advantage at big scale. On the other hand, it is worth noting again that the Alibaba and Softbank alliance have proven to be an unstoppable force, that have been met with no competition in this region. Will this change? Only time will tell.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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He has worn many hats in the past - selling advertising space, banking services, and even trading stocks. In 2013, longing for a change of scenery, he joined Rocket Internet’s (now Alibaba’s) Lazada as a online marketer in Bangkok, where he experienced first hand life in a startup. He never looked back since - landing lead roles at Rocket’s EasyTaxi (Singapore), Rocket’s MEIG (Dubai), and Bamilo (Tehran). After that, he launched (and ran) the Thai venture for one of Singapore’s biggest cross-border ecommerce. Last year, Chong put his expertise to work, helping an SGX-listed company relocate to and run operations in Thailand. Nowadays, he’s just chilling by the countryside.