The evolution of e-commerce enablers in Southeast Asia

This is a contributed article by Jasper Knoben the Chief Commercial Officer of Intrepid Group

If we look at the current landscape of ecommerce in Southeast Asia, I think we’re just starting to scratch the surface. Based on comparison of population size, urbanization, and GDP per capita, there is no reason why SEA ecommerce should not approach 50% of China ecommerce in due course. Let’s look into this a bit deeper: 

First, compared to China and the US, sellers in Southeast Asia need to master more key ecommerce platforms, 2 to 6 per country (excluding social platforms). This creates a lot of complexity for brands and SME sellers alike.

Secondly, the market is fragmented in terms of 6 countries and 4 languages. That makes it harder to unlock the potential of ecommerce, but that’s where enablers come in. Solving this fragmentation and complexity brings a lot of value for brands wanting to tap into the large SEA market.

At Intrepid, as we have local presence in each of the SEA countries so we can offer localized service across the region. That way brands can benefit from the rise of ecommerce in Southeast Asia, without having to worry about the different languages, cultural preferences, platforms, etc.

Similarly for SMEs, SaaS like our Powersell allows sellers to manage this complexity and expand their business from one platform to all platforms in a country, to capture the full potential of ecommerce at hardly any incremental effort. 

Learning from the earlier players

An ecommerce enabler is a company that provides end-to-end ecommerce services to brands that want to sell their products online.

This B2B business model is still relatively new and spans a wide range of services, including: store and campaign management, content production and graphic design, chat management, marketing execution, integration of online sales channels and operations management, warehousing & order fulfillment.

The early players like aCommerce, started in a time when fulfilment and last mile delivery ranked among the biggest bottlenecks to ecommerce growth in SEA, so they focused a lot on solving those challenges by investing heavily in their own warehouses, WMS systems and even a last mile fleet locally.

This is a very capital-intensive strategy which absorbed a lot of the funds that were raised. Over time, the leading marketplace platforms have invested a lot of effort and capital in solving these challenges, up to a point where for most brands requirements, this is now becoming a commoditized space with multiple suitable solutions. 

Intrepid is focusing on the more growth-driving aspects of selling online in SEA: holistic e-store management and digital marketing, and we partner with leading 3PL fulfilment partners in all countries to be able to offer brands the same one-stop-shop solution for all their ecommerce needs in a much less capital-intensive model. 

Past experiences that foster knowledge & the right timing

Most of our management team has worked for the leading ecommerce platforms in SEA which helped a lot in scaling regionally, offering us access to a strong local talent base to kick start each country team through personal connections.

And in general, knowing how an ecommerce platform works from the inside and being able to relate to the teams on their side that we deal with on a daily basis makes for a fruitful collaboration and helps us to achieve better results for our brands.

The earlier main barriers to ecommerce growth in SEA were around payments, trust, and logistics. Amazing progress has been made in solving these barriers and the consumers also have been embracing online shopping. Driven by strong marketing investment from the marketplace platforms, ecommerce has grown at a rapid pace for the last 6 years and we believe that this will continue if we look at where SEA is today compared to China. 

The fundamentals are there, the consumers are there. More and more brands want to seize the opportunity and look for support from an enabler, either to run the entire online business E2E on their behalf or to complement their inhouse teams with a bespoke solution based on a menu card of services, which is exactly what we offer.

And of course, COVID-19 accelerated ecommerce penetration in SEA even more, therefore it is a very exciting time and outlook for the industry.