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[Updated July 27 11:12am]: A light version of Amazon Prime, Prime Now has become available in the App Store for Singaporeans (previously only a redirect) as well as the website is live: https://www.amazon.com.sg/primenow.

Updated July 26 6:23pm]: The Amazon Prime Now app has become available to download in Singapore (Prime Now is the two-hour delivery service for Prime members meaning). It can only be downloaded through primenow.amazon.com redirect.

Amazon in Singapore

Amazon Prime Now app now available for download in Singapore.

Amazon in Singapore

Available inventory for Amazon Singapore Prime Now.

Recent headlines, first reported by TechCrunch, say that the US retail giant is finally (finally) coming to Southeast Asia, Singapore first.

There hasn’t been any official word from Amazon as the company told e27 it would not comment on speculation.

Taking a look at the Amazon website for job postings in Singapore also hasn’t given any further signs of an aggressive hiring spree for local retail employees though it would be wise to keep an eye for updates.

So what points to the retailer’s confirmation landing in Singapore?

Social media influencers.

Popular accounts such as “theramengirl” and “superadrianme“, each with thousands of followers have posted sponsored photos in the last week alluding to Amazon’s Prime service soon to be available in Singapore.

Amazon in Singapore

Source: superadrianme

Amazon in Singapore

Where could that familiar ‘a to z’ blue packaging be from? Source: theramengirl

Impact of Amazon in Singapore

Everyone, e-marketplaces and traditional retailers alike, has been holding their breath ever since the circulation of Amazon’s Singapore Q1 launch rumours began in November 2016.

It’s not wrong to be worried if one has followed the disruption caused by Amazon in the US retail industry. Brick and mortar businesses have filed for bankruptcy, 25% of shopping malls in the US are expected to shut down by 2022, and brands (Nike) that were likely to never go ‘marketplace-strategy’ have hopped onto The Everything Store to gain control over third-party pricing and distribution.

In Southeast Asia, ambitious plans to build more stores in the next five months by retailers in Thailand may slow down. Service providers, namely logistics players with strong regional networks, are ready to offer a helping hand in Amazon’s initial business growth but should stay weary if the giant plans to replicate its impressive logistics network in-house in the region.

Alibaba has recently doubled down on its Southeast Asian efforts by investing another $1 billion in Lazada for 83% stake and rumoured to be competing with JD.com Inc to lead a funding round in Tokopedia, one of Indonesia’s largest marketplaces.

JD.com Inc, China’s number two ecommerce player has also announced plans to enter Thailand by end of the year to increase their regional footprint.

Lazada, arguably the leading online retailer in Southeast Asia, began offering a Prime-like membership program called LiveUp in April in hopes of keeping customers loyal.

Sign-ups for the program have been quite healthy, tells a source from Lazada to eIQ.

Aimone Ripa di Meana, co-founder and Chief Marketplace Officer at Lazada, recently commented that Lazada was confident about its position in the region.

“It’s not an easy balance [being local and nimble], but it’s something that we’ve invested a lot of time to get to and I don’t think it’s acquired or built in a day,” says Aimone.

Shopee, another strong contender affected by news of Amazon’s arrival, has also been quite active in strong arming its retail strategy. The once only C2C marketplace announced “Shopee Mall” earlier this month, a new in-app platform that follows the same Lazada B2C model and already offers products from over 200 brands.

Shoppers can enjoy free shipping with no minimum spend and a 15-day return policy when they make a purchase. But will it all be enough?

Survival in one of the last battlegrounds Amazon has not yet stepped into will boil down to which company has successfully created a loyal fan base by fulfilling promised perks of fast shipping, cheap prices and an endless assortment of products.

These are already the cornerstones of Amazon thanks to Bezos’ long-standing and highly touted ‘customer obsession’ and what will ultimately give them an advantage in acquiring shoppers without any heavy marketing

For those holding their breath, it’s time to let it go because the “Amazon Effect” is coming.

Amazon in Singapore

And you’re done. Source: Flickr


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To build or not to build?

This is the question many retailers around the world are struggling to answer. In the US, the answer is pretty evident.

A 31% increase in 2017 retail bankruptcies from 2016 and an estimate from Credit Suisse claiming that as many as 25% of America’s malls will shut down by 2022 all point to no.

Source: Credit Suisse

It’s the “Amazon Effect”, analysts say, the shift of spending from offline channels to online ones as young people become more accustomed to ‘online-only’ retail. No money in means brick & mortar stores are bleeding out trying to operate labor intensive businesses.

ecommerceIQ

Source: FT

Meanwhile, news overseas is quite disparate.

The country’s largest retailers and department stores like Tesco Lotus, Robinsons, and HomePro are all planning to open new stores in the next five months. Big C SuperCenter has allocated roughly $351.5 million for store expansion locally and abroad this year.

Online or offline: what’s the right way to go?

Although the rise of ecommerce has been a major contributing factor to the demise of traditional retail; the brick and mortar store is not dead as most claim.

Ecommerce only accounts for a single digit percentage in overall retail sales in Southeast Asia and ‘mall culture’ is not seen as a chore but as a weekend excursion, especially with malls adding new exhibitions such as Central Embassy’s recent interactive art display, “The Beach”, in Bangkok.

ecommerceIQ

Credit: adaymagazine

“Considering rapidly changing consumer behaviour, we may create shopping mall concepts that fit such changes. We want our complexes to become a third home for customers,” says Pakorn Parthanapat, COO of Central Pattana (CPN), a development arm of Central Group.

As well, there will always exist a large population that requires to see, feel and touch a product before making any purchase decision – a problem that many pure players retailers can only ‘solve’ by burning up cash.

Retailers understand these concepts, which is why the smarts ones with existing offline and online footprints are using it to their advantage.

The answer isn’t to label brick & mortar as a dying breed but instead businesses must become more deliberate with how many stores, what to offer in each and their locations.

Uniqlo is closing down stores in the US to only build others in premium locations.

In Thailand, HomePro’s new stores are testing its “HomePro S” concept, a shop that occupies only a sixth of its original store and in locations where young people frequent.

ecommerceIQ

Source: Marketeer

As well, Makro is opening one medium and three small sized cash and carry stores.

[cash and carry]: “Cash-and-carry” refers to a business model that virtually excludes all credit transactions, requiring up-front payment for all goods and services. Companies with a cash-and-carry business model eliminate accounts receivable from their books and are able to match all sales with actual cash receipts.

JD.com Inc., China’s second largest ecommerce company is also expanding into both urban and rural China with over 1 million JD convenience stores in the next five years.

Jason Yu, GM of consumer research firm Kantar Worldpanel comments, “it is more challenging to grow purely in ecommerce, so both Alibaba and JD move into offline business.”

Ecommerce is not the ‘end all’ solution to today’s retail evolution, but the trend appears to be that pure play companies – Pomelo, Xiaomi – are the ones that have a say in whether to open more offline locations or not, whereas traditional retailers are scrambling to go online in order to save their businesses.

Multi-channel is the inevitable future.