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Here’s what you need to know.

1. PromptPay is becoming more popular in Thailand

Transactions via PromptPay stood at around 15,000 a day on average last week, Bank of Thailand governor Veerathai Santiprabhob said at yesterday’s Post Today forum. “From what we have monitored, the PromptPay problems were caused by human error, not the system.”

“Even though the volume transactions keeps increasing, it only accounts for a very small portion of traffic the system can handle,” he said. Given that PromptPay’s backdoor system is scalable, the system can be upgraded to cope with a higher number of transactions in the future.”

Read the rest of the story here.

 

2. Gartner: Don’t expect uplift in delivery drones for years

The firm is expecting delivery drones to make up less than one per cent of the commercial drone market by 2020, asserting that it does not expect them to be “a major factor for several years”.

The firm expects that delivery drones will begin finding a niche in business to business applications first, particularly for internal services within one company where logistics will not be such a big factor.

Read the rest of the story here.

 

3.  Recommended Reading: Hermès Sales Gain Adds Evidence of Luxury Recovery in China

Chinese shoppers are shopping again.

Hermes International SCA added to evidence of a luxury rebound as shoppers in Asia buy more silk scarves and Birkin handbags.

At Hermes, revenue growth in Asia-Pacific, excluding Japan, slowed to 4% from 14.2% the previous quarter. The slowdown is due to lower inventories in leather goods after the company ramped up output and sales with new production sites earlier last year.

Read the rest of the story here.

Here’s what you need to know today.

1. Amazon source reveals Southeast Asia strategy

What markets are Amazon targeting? The source said Singapore will serve as the company’s launching pad to sell food throughout Australia and Southeast Asia, while another hub in Vietnam will eventually allow Amazon to sell into other Southeast Asian countries and parts of China. The Philippines, Thailand, Malaysia and Indonesia are viewed as target markets.

Going local Amazon will try to source locally as much as possible to cut costs, but if it does have to ship it in, they’ll ship it from Singapore. They’ll start putting a lot of inventory in Singapore, which means that an Australian customer will most likely get their product from Singapore, not the US.

Read the rest of the story here.

 

2. Alibaba goes Down Under to help businesses go global

Alibaba Group has launched its latest overseas headquarters in Melbourne this past weekend. The new office will support 1,300 Australian and 400 New Zealand businesses selling on Tmall and Tmall Global.

What else is Alibaba planning to do in Australia? The giant plans on building the entire operating infrastructure for regional businesses to expand globally, which includes cloud computing, online payments and logistics.

Not to mention Ma also signed a memorandum of understanding with Australia Post to bring the state-run logistics firm to Southeast Asia’s ecommerce market via Alibaba-owned Lazada Group.

Read the rest of the story here

 

3. Singaporean startup Yojee uses AI and blockchain to help logistics businesses

Yojee has built software that uses AI and the blockchain to help logistics businesses coordinate their fleets and make the most out of existing last-mile delivery infrastructure.

The system is powered by machine learning and automatically assigns delivery jobs to drivers, reducing the need for a human dispatcher. This lowers costs for logistics providers and makes deliveries faster for customers. It also uses blockchain technology to track transactions and deliveries so that they can always be verified.

Tackling the last mile problem: “A recurring message from founders and CEOs was that selling is getting easier because the market is growing, but delivery is still very difficult,” said co-founder and CEO, Ed Clarke.

Read the rest of the story here.

 

2016 was a buzz year for drone crafts. The technology gained instant coverage across different industries and media sites as more companies created drones or were rumored to have one in the works.

Various logistics industry specialists also came out to assess the role of delivery drones in the landscape of logistics and last mile and predicted that drones have the potential to disrupt and reduce costs associated with traditional supply chain.

Logistics companies and retailers such as Amazon and Walmart have invested in pilot projects, but no drone has yet been commercialized. Logistics players such as DHL and Flirtey have successfully completed a few drone deliveries but are currently still in trial period.

With so much chatter in the drone conversation, which companies in our industry have actually shown progress in drone deliveries? We take a look:

1. DHL

Having operated a drone research project since 2013, DHL reportedly made a trip around a mountainous area in Bavaria, Germany area three times faster than cars with its “parcelcopter” in May 2016.

We have achieved a level of technical and procedural maturity to eventually allow for field trials in urban areas as well,” said DHL manager Jürgen Gerdes.

The delivery giant also reported to have built an automated system that can deliver packages such as medical supplies between two remote Bavarian villages. End-customers were able to visit a DHL “skyports” location where it stores the drones during the trial period in November 2016, insert their package into an allocated box and input a code that activates the drone.

DHL is also the first to apply to be a part of the mobile controlled UAV traffic research project, which will be effective this year.

 

2. Amazon

drone deliveries

Amazon already has a plane, a credit card, an employee-less grocery store so naturally the giant would have a drone delivery system they coin Prime Air. The company expects the drones to transport packages safely to customers within 30 minutes.

According to recent reports, Amazon has filmed for permission to run tests on experimental wireless communications technology – possibly to bolster Prime Air. Tests will take place at Amazon’s headquarters in Seattle before moving to its customer service facility in Kennewick, Washington.

If the requested tests are indeed related to Prime Air, it highlights how serious Amazon is about implementing drone delivery on a large scale. The senior manager of Amazon’s drone delivery service is Neil Woodward, a retired astronaut, and is listed as the primary contact on documents submitted by Amazon to the Federal Communications Commission regarding base stations for the wireless comms technology.

3. UPS

UPS made headlines in October 2016 when the package delivery giant sent a drone to deliver an asthma inhaler to a children’s summer camp on an island just off Massachusetts in the US.

According to UPS, the company is focusing on using drones to fly in remote locations to deliver emergency supplies. A more widespread delivery service is years away into the future.

 

 

4. Diamler

Diamler, the manufacturer of Mercedes Benz has been taking very active strides in drone innovation this past year. From its drone-equipped delivery van concept in September 2016 to its most recent $17 million investment in London based Startship technologies, a delivery drone startup.

Diamler’s drones aim to change last mile deliveries by integrating an advanced routing solution, which will provide information on where to place a package or whether a signature is required. It will still have to maneuver between the drone regulations set by the FAA in the US though.

 

5. Walmart

In collaboration with the Federal Aviation Administration and NASA, Walmart was developing internally autonomous drone technology that allows a quad-copter drone to take 30 images per second from a top-mounted camera, as well as deliver parcels. This was back in June 2016.

The Walmart drone is most likely still in the development phase, but the company plans to integrate the drones into all of its distribution centers in the future.

 

6. Alibaba

The buzz surrounding Alibaba’s Taobao drone started to circulate last February. Taobao ran a real world test that lets 450 people in Beijing, Guangzhou and Shanghai order ginger tea and receive it within the hour. The test period only lasted for 2 days, but it was one of the first practical instances of drone delivery in urban areas.

Since then, the Taobao drone has been PR shy.

 

7. 7-Eleven/Flirtey

7-Eleven actually got a head start in the drone race, beating everyone by being the first to successfully complete a regular drone delivery to consumers in the US in December 2016. Approximately over 70 orders were placed in Reno, Nevada and received doorstep drone treatment.

According to Flirtey, the average delivery time was 10 minutes. Customers mainly ordered snacks and beverages, including over the counter medicine.

Slurpees and sandwiches could be widely delivered within the US via drones in the near future.

 

What’s next?

Which logistics company or retailer do you think should pilot drones next? Is Southeast Asia too far away from launching commercial drones or would the bustling streets of Bangkok and Jakarta be prime locations for drones in the future? Let us know in the comments.

Here’s what you need to know.

1. Rocket Internet is entering the temp recruitment industry

The latest startup to launch in Asia is Ushift, a marketplace for businesses to hire temporary staff. Ushift will officially launch on January 16 with Singapore as its first port of call.

The decision to launch this startup is due to Southeast Asia’s fragmented short-term recruitment system. There’s a lot of demand from event management firms and restaurants, but most of the last minute recruitment is done through word of mouth or Facebook groups.

Read the rest of the story here.

 

2. Must Watch: How Amazon arranges its ‘Prime’ warehouses

[embedyt] http://www.youtube.com/watch?v=5TL80_8ACPc[/embedyt]

 

The reason it looks like such a mess is why an Amazon prime customer is able to place and order and get their items in an hour.

 

3. Indian fashion ecommerce firm Fynd targets southeast Asia 

“If you look at Middle East or Southeast Asia, they have very similar structures in terms of how retail organisations are—they’ll have a master franchisee and their own systems. We’ll start off with Southeast Asia first because delivery in-store infrastructure is much more well-developed there than in Middle East,” says Harsh Shah, Fynd’s co-founder.

Earlier this month, Fynd also deployed an omni-channel in-store product called Fynd Store that allows customers to browse through all products of a particular brand on screens placed inside the brand’s physical outlet.

Read the rest of the story 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

Amazon’s rapid expansion into private label brands

Earlier today, TechCrunch published an article titled “Amazon to Expand Private-Label Offerings—From Food to Diapers” detailing Amazon’s successful push into private label brands covering lucrative categories ranging from batteries, mom & baby to even perishable food items. The concept of retailers selling their own private label brands has been around for ages, mainly adopted by grocery chains with the goal to increase margins for often low-profit consumer packaged goods (CPG) categories. It’s not so much players like Amazon are doing this but how and why they’re doing this that should ring some alarm bells with brands.

The ultimate bait and switch

Global ecommerce giants like Amazon and, increasingly, local Southeast Asian players like Lazada and MatahariMall are offering perks to entice brands to open stores and sell through their platforms. This strategy resembles Ladies Night at clubs, where women are offered free drinks to indirectly lure men, who, more often than not, end up with a headache, alone and having burnt a hole in their pocket at the end of the night.

With aggressive promotions and subsidies from their hosts, brands often see quick short-term gains in online sales. The extreme example here is 11.11, a man-made online shopping festival during which retailers compete in the Discount Olympics. Obviously, brands benefit from spikes in sales but little do they know that they’re actually selling their souls in the long-term. It’s like crack, it makes you feel great for a while but sooner or later it’s hollowing out your body.

With the massive amounts of data generated on a day-to-day basis, these ecommerce platforms can easily identify consumer trends, such as best selling products and categories beyond what brands are able to see themselves. This data is then leveraged by retailers to develop and introduce their own private label brands to compete with the brands they partnered with in the first place.

Once launched, these platforms could favor their own white-label brands by giving them more visibility through favorable product placements as well as top rankings on internal search result pages.

The bigger picture

Players like Amazon and Alibaba’s Tmall aren’t really traditional ecommerce retailers. Their main objective is to use competitive pricing, often subsidized, on retail products to acquire more and more users, which they then monetize through other means such as Amazon Prime subscription fees for Amazon and onsite advertising and Alipay transaction fees for Tmall.

Amazon’s new CPG brands like Happy Belly and Mama Bear are only available to Prime members in a move to incentivize joining its $99-a-year unlimited shipping program that’s fueling Amazon’s retail growth behind the scenes.

In a post-Alibaba acquisition world, ecommerce power-players like Lazada could potentially increase awareness of their own private label brands through better placements on their marketplace, eventually forcing other brands to pay more for advertising to rank higher and get traffic.

With private labels, Amazon and the likes of Lazada also have more “room” to play in terms of pricing, allowing them to maintain sustainable low prices, keep driving more users and spinning the flywheel.

Strategies for brands

Brands like P&G, Unilever and Nestle should look at ecommerce marketplaces as a relatively easy way to test selling online but in the long-term, brands are arguably better off selling direct-to-consumer where they have full control of the brand image, customer experience and, most importantly, user data.

A case in point is Coach. The luxury brand was one of the first brands to set up shop on Tmall in China but recently closed down its official flagship store, leaving the brand with only a brand.com and WeChat presence. Many luxury brands have expressed concerns about the mass-market image of some of the bigger marketplaces.

Brands don’t have to pick between marketplace and brand.com only. Some brands like L’Oreal have adopted a multi-channel approach where their marketplace presence generates sales for their more mass and lower price point items whereas their brand.com site sustains long-tail and higher average order value sales.

At the end of the day, marketplaces are a great way for brands to jump into ecommerce. However, brands should be aware of the pros and cons and especially long-term implications of such a decision.

BY SHEJI HO