2016 has been somewhat of a definitive year for ecommerce in Southeast Asia. With the region poised to experience an ecommerce golden age, trends and predictions that will shape ecommerce in 2017 have been identified and there is no denying that the year will most likely bring significant milestones to the region’s development.

2016 certainly set things in motion: acquisitions, closures and entries were this year’s key themes. As the year draws to a close, we present the top 5 stories and briefs covered on eIQ that have made an impact on the development of ecommerce in Southeast Asia.

1. Battle of the giants

The first foray in a series of moves that would eventually complete Jack Ma’s trojan horse for Southeast Asia. In April, Alibaba made a $1 billion acquisition of Rocket Internet’s Lazada, effectively injecting much needed investment into the cash strapped marketplace, and hereby making an effective entry into the region.

This was followed by an announcement in November that Alibaba’s Ant Financial has invested in Thailand’s Ascend Money.

Amazon finally announced its entry into Singapore Q1 of 2017. Although a much covered angle in the media, these three stories have defined the majority of Southeast Asia ecommerce in 2016.

 

2. Indonesia’s Go-Jek, Singapore’s Garena & Grab are unicorns

After raising $550 million, Go-Jek is now valued at $1.3 billion, claiming unicorn status.

Singapore’s Garena has also maintained its status as Southeast Asia’s most valuable startup with additional funding that came through in September.

Grab also raised $600 million in funding making it another unicorn in the region.

 

3. Google and Temasek’s e-conomy SEA 2016 report

Arguably the most referenced report this year. Google and Temasek’s analysis of Southeast Asia’s ecommerce landscape has appeared in a string of interviews as references for research arguments and have shined a spotlight into the region’s developing landscape. Access the full report on eIQ’s reports section here.

 

4. LINE debuted as 2016’s largest technology IPO

The dual listing in New York and Japan occurred in July this year. The Japanese messaging app spiked 30% in market debut after opening at $42 per share in what appears to be the biggest tech IPO of this year.

The company is owned by Naver, a South Korean Internet company, who offered 22 million shares on the New York Stock Exchange and 13 million on the Tokyo Stock Exchange.

But it hasn’t been all good news for Cony & Brown as news came out in October that the messaging app is struggling to acquire new users, barely moving beyond its 220 million monthly active user base.

 

5.  Goodbyes: Ensogo, Rakuten & Foodpanda

In June, Ensogo announced the closureof all business units in Southeast Asia. Following its shift from a daily deals website in 2013 to a mobile marketplace in 2015, the company was struggling to thrive in an increasingly competitive market.

Rakuten also announced the closing of its Singapore, Malaysia and Indonesia marketplaces in February and sold back Rakuten Thailand to original founder, Pawoot Pongvitayapanu. The company did not give a reason for the closures, but announced that the moves are in line with a new roadmap.

In December, Rocket Internet declared that it was selling online food delivery startup Foodpanda to rival, Delivery Hero for $150 million. This announcement came after a string of rumors regarding the service provider’s performance.

The series of chain reactions that occurred have shaped Southeast Asia’s potential ecommerce boom. If these developments were anything to go by, we should be seeing all the puzzle pieces being placed together within 2017. For now, it’s a wrap for 2016!

 

As the year closes, ecommerceIQ has reflected on  what has been achieved, and therefore we are sharing with you our most read stories of the year.

ecommerceIQ’s goal for the next year remains the same, to continue serving Southeast Asia’s ecommerce industry and to provide insightful market research so professionals around the world can take action to capture the region’s growing opportunity. We hope you come back in 2017!

#1 Indonesia’s Ecommerce Landscape: 6 Takeaways from Indonesia’s Online Battle Field

Indonesia is on track to become the biggest ecommerce market in Southeast Asia. The ecommerce boom has produced several start-up unicorns, such as the popular ride-hailing, food delivery and payments app Go-Jek, Indonesia’s most popular C2C marketplace Tokopedia and travel marketplace Traveloka. Yet, there are many more players in the ecommerce field in Indonesia, and that is what ecommerce landscape maps. This is our most read article of the year.

#2 The Evolution of Ecommerce Business Models in Southeast Asia

Ecommerce in Southeast Asia is still relatively young, with only 1% of total retail gross merchandise value being generated online compared to 7.1% and 15.9% in the US and China. However, the region is already widely being touted as the next frontier of ecommerce opportunity. As Southeast Asia’s ecommerce businesses have the opportunity to learn from the industry’s best, this article looks into how business models have evolved in the region and what’s to be expected next.

#3 Why Everyone is Wrong About Southeast Asia’s True Ecommerce Potential

Little data exists on the current and projected size of the ecommerce market in Southeast Asia, which is still a nascent, fragmented industry. As several reputable organizations have taken a stab at assessing the size of the ecommerce in the region, this article dives to explain why the actual potential of the market could much bigger.

#4 DHL Ecommerce CEO: What Today’s Southeast Asians Expect From Their Last Mile Experience

Southeast Asia is a hotbed for online trade as more than 480 million people in the region will be online by 2020 and there are high volumes of deliveries across the countries. Whilst it is a great time to be an e-tailer, the opportunity also comes with some challenges. DHL Ecommerce CEO Charles Brewer in this article explains what exactly Southeast Asian customers wants after they hit the ‘check-out’ button.

#5 Thailand’s Ecommerce Landscape: 5 Takeaways from Siam’s Online Gold Rush

Thailand, while not the most populous nor richest of the Southeast Asian nations, is currently the fourth largest ecommerce market in the region. Thailand’s ecommerce landscape sets to provide a quick snapshot of the the country’s ecommerce players and identify industries which provide opportunities for new businesses.

#6 ecommerceIQ SPARK 40 – Top Individuals Shaping Southeast Asian Ecommerce in 2016

“SPARK 40” is a compilation of the top ecommerce professionals who have contributed to shaping the industry in Southeast Asia. It’s not only about funding. These businesses are solving long-term problems and hoping to be the ‘spark’ needed to clear roadblocks that restrict ecommerce growth – whether that be serving the unbanked, evolving their business models to cater to customer demands or being the first to tackle a new sector.

#7 Philippines’ Ecommerce Landscape: 5 Key Takeaways From Philippines’ Online Runway

The Philippines, although part of Southeast Asia’s growing ecommerce family, is quite the odd cousin. With over 10 million overseas Filipino workers and 3 million of them in the United States, Philippines’ online shopping behavior has been heavily influenced by the US, paving the way for innovative cross-border logistics businesses and digital payments solutions. While the ecommerce market in the Philippines currently is the second smallest in the region, it is expected to lift off and this article explores where the opportunities lie.

#8 Singapore’s Ecommerce Landscape: 5 Key Takeaways from the Lion City’s Online Scene

With 83% of its population connected to the internet, Singapore holds the title as the most mature ecommerce market in Southeast Asia. Despite its small population, Singapore accounted for 25% of Southeast Asia’s 2013 online retail value, larger than the region’s largest market, Indonesia that contributed 20%. Singapore’s ecommerce landscape provides a quick overview of the most developed ecommerce market in Southeast Asia.

#9 After All the Chatter, the First Chatbot Finally Launches in Southeast Asia

Chat commerce or conversational commerce is the intersection of messaging apps and shopping and is already a very familiar concept in the West. Southeast Asia has largely mirrored the West and particularly China in development of its ecommerce maturity. Yet, current chatbot growth has been stuck at the ‘idea phase’ – a lot of chatter and buzz about its revolutionary importance but no product. This article tells the story of Sale Stock, the mobile first shopping platform widely popular among Indonesia’s young females, which has become SEA’s first company to launch a chatbot that can handle end-to-end transaction on Facebook’s Messenger Platform.

#10 The Impending Death of Traditional Retailers

Amazon’s dominance and stock value will only keep increasing with the ongoing global structural shift from offline retail towards ecommerce. Ecommerce penetration in the US today is “only” 7.7%. As ecommerce is booming not only in US, but also in Southeast Asia, traditional, offline retailers are lift with few choices when it comes to ecommerce adoption. This article explores those options for regional businesses.

 

Here are today’s ecommerce headlines

1. With fresh funding, Grain wants to be the next McDonald’s

Grain competes in Singapore’s crowded online food delivery market with companies like Foodpanda, Deliveroo, and UberEats – all of them international players with significant brand capital (not to mention actual capital).

Grain is different in its full-stack approach: rather than partnering with restaurants that make the food, it prepares its own dishes.

Read the rest of the story here.

 

2. Amazon patents show flying warehouses that send delivery drones to your door

Drones, including temperature-controlled models ideally suited for food delivery, could be stocked at the AFCs and sent down to make a precise, safe scheduled or on-demand delivery.

An example cited in the filing was around a sporting event. If there’s a big championship game down below, Amazon AFC’s above could be loaded with snacks and souvenirs sports fans crave. The AFCs could be flown close to a stadium to deliver audio or outdoor display advertising near the main event, as well, the filing suggested.

This could change the way football fans buy their jerseys.

Read the rest of the story here.

 

3. Alibaba expands downtown Manhattan headquarters

The $200 billion company had leased space in a new boutique office building at 860 Washington St. in the meatpacking district, sources said. The company is now expanding its footprint at the downtown Manhattan site to more than 30,000 square feet, according to several people familiar with the deal.

Read the rest of the story here.

Here are today’s top news.

1. Malaysia’s GDEx set to ride on region’s booming ecommerce

According to Kenanga Research, the strategically positioned package delivery services company can ride on the rising trend as the e-commerce industry will undergo a period of robust growth in the coming few years. The company saw 70% to as high as 500% growth in B2C delivery in the past three years, with a CAGR (compounded annual growth rate) of 246%.

Read the rest of the story here.

 

2. PaidUp helps Philippine SMEs crowdfund working capital from customers

Launched in November 2015, PaidUp is a mobile app that turns your phone into a prepaid digital wallet, enabling you to find, order and instantly pay for food, drinks and services ahead of time as conveniently as sending a text message.

With a single office in Manila, PaidUp now plans to expand into Singapore and India in 2017.

Read the rest of the story here.

 

3. Recommended Reading: China’s Internet Firms Take Their Fight to Southeast Asia

As Beijing grapples with a slowing economy, the country’s top tech firms are spending aggressively to expand in Southeast Asia, home to 620 million people. The region is becoming an important growth area for Alibaba Group Holding Ltd., Tencent Holdings Ltd., ride-hailing firm Didi Chuxing Technology Co. and e-commerce company JD.com Inc. as they expand in online retail and mobile payments.

Read the rest of the story on The  Wall Street Journal here.

Here are today’s top ecommerce news.

1. Alibaba’s biggest investments of 2016

The company posted record-breaking sales numbers, of course, but it also spent the year splashing cash on investments all over the world. From Lazada to DiDi Chuxing. check out this list to see how much Alibaba spent on the biggest companies.

Read the rest of the story here.

 

2. Hong Kong based Easyship expands to Singapore

Easyship integrates with more than 80 different shipping services including those from leading couriers such as DHL, FedEx and UPS, at prices discounted up to 70% compared to retail. This helps buyers to choose the best available option for a particular destination based on item specifications (type, weight and dimension) and provides visibility on delivery time, cost, reliability, and tracking.

After a rapid growth in Hong Kong, it is now expanding its operations to Southeast Asia with Singapore as its first location.

Read the rest of the story here.

 

3. Amazon calls 2016 holiday season its best ever

Amazon.com Inc said it shipped more than 1 billion items worldwide this holiday season, which the top online retailer called its best ever, and its shares rose 1.6 percent in afternoon trade.

The Amazon Echo home assistant and its smaller version, Echo Dot, topped the best-sellers list, said Jeff Wilke, chief executive of Amazon’s worldwide consumer division, in a press release.

Alexa and Amazon Dash, a one-button ordering service, are making it easier for shoppers to “skip the trip,” and will put more pressure on rival retailers as they try to garner in-store and web traffic.

Read the rest of the story here

Key terminology to know before reading:

  1. Advertiser: The owner of the product/service that wants to move online
  2. Publisher: The online enabler who will help with the product’s online visibility

 

Before we dive in, it is important to clarify what affiliate means in simplified, everyday language. For those who are already aware, feel free to skip the first part and go straight to the second.

Affiliate refers to doing online marketing through representation. Whether it’s enlisting a salesman, supplier rep, brand ambassador, product reviewer or any individual who can help you advertise and sell, they all fall into the ‘affiliate’ criteria.

These agents earn commission through the product or service owner following a purchase made from their ad, which makes being an advertiser accessible for anyone with a social media account.

affiliate marketing
The benefits of being an Advertiser:

  1. Instant promotion of your product
  2. Maximising sales channels
  3. Easier cost control – only have to pay when your product sells through affiliate

The benefits of being a Publisher:

  1. Commission is set by the seller
  2. No requirement to store stock or product
  3. A chance to build income from what you may already be doing i.e. writing product reviews
  4. Steady source of income. If your website is without advertising banners, you are able to replace the ad space
  5. Potentially higher income than Google Adsense

The Affiliate system would not be possible without an Affiliate Provider, which provides the platform for Affiliate Marketing. The provider ensures that all operations are transparent by acting as the middleman by assigning a tracking code to see which publisher sold which product, and how much commission they are entitled to.

3 Affiliated Providers You Should Know in Thailand

Lazada Affiliate: As a household name in ecommerce, Lazada also has an Affiliate platform. This means that Lazada simultaneously is the Advertiser and the Affiliate Provider.

affiliate marketing

Website: http://www.lazada.co.th/lazada-affiliate-program/
Fanpage: https://www.facebook.com/LazadaAffiliateProgramThailand/

affiliate marketing

Key Feature: Lazada is the biggest online marketplace in Thailand, drawing in over 30,000,000 sessions per month. This provides brands with high visibility, and gives publishers a higher chance to earn commission through sales.

Interspace Thailand: The company began operating Access Trade in Japan in 1999. With over 6,000 clients and 340,000 websites, it was the largest affiliate in Japan. In 2012, the company expanded internationally to China and Indonesia and launched in Thailand the year after.

With over 300 employees at Interspace and the know how of the Affiliate market in Thailand, the company’s goal is to represent CPA (cost per action) Affiliate, and is poised to become the leading platform in the region.

affiliate marketing

Website: http://accesstrade.in.th/
Fanpage: https://www.facebook.com/accesstradeTH

affiliate-marketing

aCommerce Affiliate: The latest Affiliate Provider to join the party. Having launched in Q3 2016, aCommerce Affiliate is run by Southeast Asian ecommerce solutions provider aCommerce. The company provides end to end services from website design, online marketing, channel management, fulfillment and after sales service for brands that want to sell online. The decision to launch aCommerce Affiliate provides the company’s clients with more online channels to promote and sell their products.

affiliate

affiliate marketing

Key Feature: High quality Advertiser network and an experienced team with know-how in ecommerce.

Website: http://affiliate.acommerce.asia/
Fanpage: https://www.facebook.com/aCommerceAFFILIATE/

These are the top Affiliate Providers you should know about in Thailand. It’s important to remember that each provider has different features and hence, different benefits that may be tailored to suit some businesses but not others. Beyond the list above, there are also other effective affiliate programs that may be suitable to your website.

For example, Thailand based freelance portal Fastwork.co also has an affiliate program. Fastwork doesn’t offer commission on a purchase, as it is a services website, so advertisers would make money on finding jobs for freelancers.

affiliate-marketing

The website will pay advertisers 150 baht if they bring first time users, which will be transferred as website credits. The advertiser can then request to take out the credits as cash for use.

Hotel booking website Agoda also runs their own affiliate program through its affiliate partnership contract. As an advertiser, you can run any sort of website or blog, and post ads on Agoda properties. Obviously, the more visibility your website has the better, and an advertiser can earn a series of steady income if one visitor books a luxurious hotel or multiple days vacation from your website.

affiliate-marketing

Affiliate Marketing shares similarities to the ‘chicken and egg’ story, what came before? If there were a limited amount of Advertisers, Publishers wouldn’t know who to promote. On the flipside, if there were a limited amount of Publishers, Advertisers wouldn’t necessarily put emphasis on Affiliate, since there is no one to help with product promotion. Therefore, the process of Affiliate requires simultaneous growth from both platforms, or one would have to sacrifice in order for Affiliate Marketing to grow in Thailand.