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Here’s ecommerce news you should know:

1. Six out of 10 Filipino prefers e-payment than cash

In the recent survey conducted by global payment company Visa, Filipino showed a big improvement on the electronic payment system.

Six out of the 10 respondents said they prefer electronic payments rather than paying in cash. 71% of Filipino also shop online at least once a month.

The survey was done online and participated in equally by about 3,000 persons aged 18-55 years old from six Asian countries namely the Philippines, Singapore, Malaysia, Thailand, Indonesia, and Vietnam.

Read the full story here.

2. Google is testing a data-friendly version of its mobile app

The lite version, which essentially a modified version of the Google search app, will be optimized for those using poor quality connection, with limited mobile data allocations, or in possession of a smartphone with little internal memory.

The search company is currently piloting such version in Indonesia.

Beyond the apps, Google also putting serious focus on developing services that are optimized for emerging markets, including the lightweight version of Android, Android Go.

Read the full story here.

3. Recommended reading: Alibaba is a better investment than Amazon

Despite Amazon’s strong growth of over 30% with its stock bouncing around $1000, an analyst said Alibaba would make a better investment than Amazon, as the Chinese company sees its revenues increased from $992 million in 2011 to $23.5 billion in 2017.

Read the full story here.

Discretionary spending, the act of buying things you don’t need by McKinsey’s definition, has been on the rise in China (unsurprisingly) as monthly disposable income of urban households double.

 

Spending expected to grow from $0.64 trillion (2000) to $4.38 trillion (2020). Source: McKinsey 2017

What does this mean? More Chinese shoppers, as well as Southeast Asians, are spending on items that are categorized as ‘semi-necessities’ (ex. high-end skin care lotions, designer hand bags, etc.).  

As one professor and author studying Chinese consumerism puts it,

“I think the Chinese dream is the American dream plus 10%.”

What’s important to note is that a growing portion of this spending is happening outside of the country.

58 million users in China are expected to engage in cross-border transactions in 2017 and cross-border ecommerce alone is expected to reach 7.5 trillion RMB ($1.1 trillion USD) this year.

Korea, Japan and the US are currently the most popular destinations for the Chinese to find products that they believe are better quality, worth the price and guarantee authenticity – some of the reasons why they shop overseas.

Recently stepping into the limelight is neighbour and resource-rich Southeast Asia, that has recently landed on China’s radar.  

Where do China-Southeast Asia trade relations stand?

China’s no. 1 and no. 2 ecommerce behemoths, Alibaba and JD.com respectively, are already directing the world’s attention to the region through recent activities. The former increased its stake in the region’s largest e-marketplace Lazada to 83% and the latter continues to fortify its local presence in Indonesia and Thailand and rumoured to be investing in existing ecommerce player Tokopedia.

The One Belt, One Road initiative that plans to build extensive roads, power plants, bridges, etc. to connect over 60 countries received financing from Chinese President Xi JinPing earlier this year.

How One Belt, One Road will connect over 60 countries. Source: Quartz

The super power’s leader pledged $109 billion SGD ($80 billion USD) to the “project of the century”.

It’s also easier to do business in China without a license as the country’s highest government authority previously approved 10 cities with a large number of warehouses for expedited handling of cross-border ecommerce purchases by customers.

Foreign retailers/brands can store merchandise they bring into China duty-free, and then send items as they are ordered through customs under the relaxed cross-border ecommerce rules.

Calculations from May 2016 counted total two-way investments between China and ASEAN countries to be over $160 billion despite political turmoil over the South China Sea.

As the gates open for easier trade between China and Southeast Asia – both literally and figuratively – businesses should have an eye open for opportunities in the other market.

It makes sense for brands operating in China to be marketing in Southeast Asia, especially when Alibaba holds around 60-70% China’s ecommerce market share and no player has more than 25% of the total cross-border ecommerce market share.

The Chinese giant long launched its very own Taobao shop-in-shop (SIS) on Lazada to target price-sensitive Singaporean shoppers with over 400,000 Chinese products.

“Southeast Asia is an attractive FDI destination for China because of its fast-growing and large domestic market,” said Lee Ju Ye Maybank economist in Singapore.

Jack Ma has also long-expressed introducing businesses to China.

These were snippets of an interview Ma participated in June this year,

“We’re interested in bringing local products to the world, to China. This has always been our focus.”

“For Thailand’s small and medium-sized ecommerce companies, don’t worry. If they want to compete with us in bringing Thai products to China and the world, maybe it’s tough, but if they do serve the customers locally, it would be great.”

In order to do this, companies in Southeast Asia need to capture Chinese consumers by bypassing marketplaces and selling direct to consumers through localized content marketing and offering products that the Chinese are already hungrily looking for.

Popular overseas goods include red wine, fresh produce such as avocados, milk and fruits.  

A BCG study also found that before Chinese customers decide to make a purchase, consumers make contact with a product through seven different touch points on average, such as store displays, product promotions, or social-media comments.  
The opportunities seem endless (keeping in mind tax revisions) or as Louis Li, the Deputy General Manager of JD Worldwide wants to remind the rest of the world, “don’t forget about China.”

Here’s what you should know

1. Rakuten launched first fully-online platform for trading and brokerage in Malaysia

Japanese company Rakuten is bringing Japan’s most downloaded online trading application, iSPEED.my, and its trading website to Malaysia.

The online platform offers greater convenience as it gives retail investors more control over their money. People also do not have to be physically present to open a central depository system (CDS) account as they can do it online.

Since launched two months ago, 1,500 accounts have been opened in the platform.

Read the full story here.

2. Alibaba partners with Marriott to improve travel experience

Alibaba and global hospitality company Marriott have announced a joint venture to help Chinese tourists improve their travel experience overseas.

The partnership will see Alibaba tapping into Marriott’s international brands and hospitality networks, while Marriott’s storefront will be featured on Fliggy, Alibaba’s travel service platform.

The travel industry in China is experiencing a huge growth and it’s expected to see more than 700 million trips over the next five years.

Read the full story here.

3. GoWabi raises a seed round from 500 TukTuks

Thailand-based online booking platform for spa and beauty salons GoWabi has raised an undisclosed seed fund from 500 TukTuks.

Launched in 2016, GoWabi expanded its footprint to nine major cities in Thailand and partners with more than 300 beauty and wellness salons and boutiques.

The funding will be used to expand the team, further develop the platform, and onboard more shops and service categories.

Read the full story here

Here’s what you should know:

1. JD.com rumoured to acquire Tokopedia

Alibaba’s biggest rival JD.com is rumoured to have acquired majority stake in Tokopedia.

If the rumour is true, Tokopedia will be another Indonesian startup that reach unicorn status after Go-Jek and Traveloka – which has just received $350M investment from Expedia.

The rumour about Chinese ecommerce giants’ interests in one of Indonesia’s biggest ecommerce site has been surfacing for months. Last month, Alibaba is the one that reportedly in talks to invest $500 million in Tokopedia.

Read the full story here

2. Online marketplace Pinkoi launched in Thailand

Taiwan-headquartered online marketplace Pinkoi is officially launched in Thailand. Pinkoi is a cross-border curated marketplace for original design products.

Inspired by the weekend market, Pinkoi seeks out niche designers throughout Asia to appeals to specific demographics. Pinkoi support the designers through workshops covering various topics related to ecommerce.

The marketplace is focussed on China, Hong Kong, Japan, the US, and now Thailand. But it has presence in 88 countries with 1.6 million members.

Read the full story here.

3. Sinar Mas Land and Samsung to host Indonesia Next Apps 4.0

Sinar Mas Land and Samsung will collaborate to host Indonesia Next Apps 4.0, an app-creating competition across eight cities in Indonesia.

Sinar Mas Land is challenging participants to create apps that will be useful in the field of transportation, marketing, and community.

The eight cities where the competition will be held are: Jakarta, Medan, Bandung, Semarang, Yogyakarta, Surabaya, Malang and Makassar. A road show in these cities is expected to draw more participants.

Read the full story here

Outside of the world’s tech ecosystems, the digitization of retail hasn’t always been met with positive reviews. There is a fear of automation taking jobs away from humans, and that fear swells as brick and mortar stores go out of business. Are they warranted?

Research by the Bureau of Labor Statistics in the US and reporting by The New York Times show that ecommerce actually has added more retail jobs than traditional models over the last 14 years.

The large change in percentage of ecommerce related jobs in the US over 14 years. Source: The New York Times

During his meeting with the President of the United States, Alibaba founder and Executive Chairman Jack Ma shared his goal to create jobs in the US over five years to focus trade between the US and Southeast Asia.

“Alibaba will create 1 million U.S. jobs by enabling 1 million American small businesses and farmers to sell American goods to China and Asian consumers on the Alibaba platform,” the company said in a statement.

Although ambitious, it’s also quite possible for a company that had more than 10 million active sellers in 2015, and estimates its China retail marketplaces “contributed to the creation of over 15 million job opportunities.”

“Machines should only do what humans cannot,” said Jack Ma. “Only in this way can we have the opportunities to keep machines as working partners with humans, rather than as replacements.”

Not only has there been an increase in ecommerce related jobs in the last ten years, these jobs on average also come with a better pay check – roughly 30% more than traditional retail jobs as averaged by one economist (all based on US figures).

Taking into account only Alibaba stock given to in-house employees, Fortune reports each person was paid roughly $11,134 in the latest quarter, a 6% bump in bonus pay per head compared to the previous year – more than double the average American’s raise last year.

Comparison of jobs created by traditional retail models and ecommerce. Source: The New York Times

While ecommerce is growing, its labor force still represents a relatively small chunk compared to traditional stores but given how interconnected multi-channel retail has become,

How do you categorize a sales clerk that assists a shopper ordering online through an iPad?

And so, where do we stand?

Unsurprisingly, all of these conclusions have been met with skeptics but recent news reporting Amazon’s aim to hire 50,000 workers in one day is a positive sign that ecommerce will always have room for a human workforce.

To put this figure in relative terms, the US Labour Department reported that 220,000 jobs were added to the US economy in June. Amazon will fulfil a quarter of this total in a single recruitment event.

This Quartz headline puts it best,


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