How to Successfully Establish Cross Border eCommerce in South East Asia


April 7, 2020
6 MIN READ
Vinculum
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With arguably the highest population density in the world and a comparatively low but aggressively growing access to internet connectivity, Southeast Asia is a marketplace that will prove crucial in the coming years.

Commerce has always boomed in these parts and now, although the field has its mammoths, the region’s eCommerce market is still pretty much up for grabs to the right suitor.

Still in its infancy, owed to the common consumer’s lack of easily accessible internet connectivity and a lack of information towards the same, the eCommerce market in Southeast Asia presents both local businesses and global conglomerates an attractive opportunity for growth given they want to face the region’s unique set of problems and overcome them.

Challenges in Cross Border eCommerce for Southeast Asia

Problems that stand in the way of the rapid growth of cross border eCommerce in Southeast Asia are

1. A very small percentage of the consumer pool has internet access

The unadulterated truth is, if we take the entire population of the region and compare it to the actual amount that have proper internet access, we see staggering differences.

Although more recently, due to exponentially decreased internet prices, especially in the subcontinent (for example, the launch of the telecommunications company Jio by Reliance), that ratio has evened out ever so slightly, with more people opting to get connected to the internet every day.

2. An overly diverse group of marketplaces with a very wide spectrum of demands

Although the countries that comprise the region can be grouped together and called Southeast Asia, their respective markets are hugely different and each of them come with their particular set of requirements that are pivotal to getting any success in its cross border eCommerce marketplace.

This can be owed simply to the sheer amount of people living this compact area, and their own diversities, which each have different demands from a marketplace.

3. A misinformed consumer pool

Owing to various reasons, the common consumer from Southeast Asia is misinformed about eCommerce. The widespread cases of fraud and Cybercrime in the region has created a sense of cynicism towards eCommerce and eCommerce services in the heart of the everyday consumer.

Adding to it, most of the consumer base of the region would prefer not to make transactions involving exchange of capital online due to basic distrust one has towards the internet.

4. Foreign ownership regulations

Cross border eCommerce has grown into a massive part of trade in the recent years but growing into southeast Asia will prove a much tougher task because of its restrictive foreign ownership regulations regarding commercial entities.

These laws vary in every country but all in all, they do prove to be a tough hurdle to overcome

5. Base issues faced by cross border eCommerce companies

There are also problems that do not confine themselves to the region but are faced by any eCommerce company or eCommerce service provider trying to grow their consumer base.

Issues like cross border inconsistencies, difference in logistics, customs clearances, taxes, and even corruption.

Despite all of that, the Southeast Asian marketplace is proving to be very lucrative to any foreign service provider as a place to grow its consumer base in.

Local business and big eCommerce giants and eCommerce service providers are looking to the growth of eCommerce in the region for the future.

Succeesing in Cross Border eCommerce for Southeast Asia

Cross border eCommerce and eCommerce services have extremely large room for growth in Southeast Asia and in order to make a successful entry into the region, certain things are pivotal.

1. Identifying individual markets and acquiring required data

There is very limited data available regarding individual marketplaces in the region. For across border eCommerce service provider, the key to success is to identify its markets and the consumer base it wants to target.

And after doing so, it has to acquire the data that pertains to the marketplace. Optimizing its strategies of cracking the region’s marketplace according to the data is crucial.

2. Appreciating the diversity in the market and approaching it in accordingly

There are vast differences in the marketplaces of the respective countries in the region and an economically diverse consumer base which varies largely even in smaller regions within a country.

These factors need to be taken into account while trying to crack cross border eCommerce in south east Asia.

3. Gaining consumer trust

As previously mentioned, the common consumer of the region is very misinformed on the topics of eCommerce and eCommerce services. It is crucial for anyone trying to make market entry into south east Asia, to be able to present itself as a trustworthy brand.

To build a consistent consumer base in the region, gaining consumer trust is pivotal. To be able to achieve that would mean creating a consumer base that is actually viable.

4. Analysis of how the local market works, its behaviors, the competition, products and prices

The local markets in the particular region work quite differently from any other marketplace in the world. Analyzing its behavior, the competition one is facing, the products and their respective pricing will largely in determining whether an attempt at cross border eCommerce works or fails.

Identifying the competition in the field, whether local or foreign has to be the first step. If one can delve themselves into the infrastructure that the current marketplace follows, better that said competition, the battle is largely won.

Analyzing the products and their prices is equally crucial. Adapting to the local requirements and pricing is another factor to successfully carrying out eCommerce.

In Conclusion

All of the above points hint at the same thing. Cross border eCommerce in this particular region will only work when eCommerce service providers delve and adapt themselves and their strategies according to what Southeast Asia requires and demands.

Although the area itself has diverse demands and requirements, a service provider cannot hope to achieve success in its endeavors in the region without actually providing what it requires of them.

In conclusion, it has to be said that eCommerce in southeast Asia is a market with unimaginably huge potential for growth. And this is out there to be taken advantage of.

To crack Southeast Asia and establish cross border eCommerce in the region will be pretty significant to the fortunes of any business or service provider looking to do so.

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