Here’s how traditional retail players are going online in SEA

March 24, 2017
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Southeast Asia is an eCommerce goldmine waiting to be tapped. With AT Kearney estimating the region’s eCommerce market to be about US$88 billion, it’s not surprising that there are many new age online brands and marketplaces coming up. More traditional retailers in emerging countries like the Philippines, Indonesia, and Thailand are transforming into multi-channel retailers.

But the transition isn’t always smooth. Unlike eCommerce-savvy customers, retailers in Southeast Asia are still navigating the e-tailing seas with cautious eyes. If you are one of those retailers, here are some best practices for moving your business online, as told by Southeast Asian eCommerce players:

  1. Build a network of partners: The first step in expanding into a new area is knowing that what you are offering is operationally possible. To do that, you must determine the costs of shipping. For example, high import duties and taxes can be a problem if you’re planning to do cross-border shipping. You would face no markup for a pair of Air Jordans if you’re shipping from the US to Singapore, but shipping to Indonesia could cost you a 56.3 percent markup in tax and duty alone.“Understanding unit economics and having the efficiency in terms of fulfillment and deliveries is critical for you to gain profitability; otherwise you accumulate a lot of loss when you’re taking in customers and losing them,” says Venkat Nott, CEO of Vinculum, a provider of SaaS products enabling multi-channel retailing.
  2. Increase your sales channels: If you only use a single channel, like your online store, you may be missing out on significant opportunities to reach out to new customers. Rather, consider extending your reach through multiple marketplaces. A solid strategy to collaborate with partner marketplaces can go a long way in maximizing your reach.A customer should recognize the same brand identity whether they see your mobile app or your listing on Lazada.”   Vinculum, often helps companies like EnterpriseIT manage their marketplace presence. The process of onboarding and automated listing on multiple marketplaces is one of the key challenges faced by retailers. This is especially critical since the cataloging requirements of each marketplace are different.“Our integrations with 30+ marketplaces, 50+ 3PLs and cross-border platforms are a ready source of potential partners to collaborate, helping Retailers to succeed online,” says Venkat.
  3. Ensure brand cohesiveness: When extending your brand’s reach across multiple sales channels, it’s important to ensure that your brand is cohesive. This extends not only to your marketing efforts but to all user experiences across devices and platforms. A customer should recognize the same brand identity whether they see your mobile app or your listing on Lazada. This keeps the customer’s experiences with your brand consistent and helps build rapport. Krishnan Menon, co-founder and CEO of furniture e-tailer Fabelio, says “when working with multiple channels, it’s important to ensure that all channels complement each other so that the customer gets a holistic experience. By setting goals that ensure one channel is not prioritized over the other, the same mindset can be shared by the whole company.”
  4. Stay keen to learn: Lastly, be prepared for a lot of market education. Despite the pending eCommerce boom in the region, Benoit Meyer, COO of Nikos Logistics in Thailand, says that he often works with small merchants who are unfamiliar with the workings of eCommerce.“We need to meet fast delivery lead times, but you’re dealing with companies that are just starting out and learning about eCommerce and how it works,” says Benoit. These issues extend to big traditional companies as well. E-commerce works very differently from offline retail, and bigger brands tend to struggle because they have a different mindset.“Because they have big names, they are used to having volume. But in an eCommerce world, these big names are just small fish in a big ocean.” The ability to be nimble, streamline operations, and learn fast is critical to succeed.

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Vinculum is a SaaS-based software company that enables multi-channel retailing. With ready integrations to front-end platforms, marketplaces, logistics companies, and cross-border platforms globally, they enable businesses through their suite of order management and fulfillment products to sell across 65+ countries and use real-time view of inventory in stores and warehouses to provide omnichannel experience to customers.


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