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Here’s what you should know:

1. Baidu teams up with JD.com to send users straight to the checkout

China’s largest search engine, Baidu, has struck a deal to funnel users looking for products to online retailer JD.com.

Users browsing for product information on Baidu’s mobile search app can now buy items directly from JD.com within Baidu’s app, enabling the company to glean valuable data on its customers’ preferences.

The partnership will help Baidu build more personalised ads and product suggestions, while shortening consumers’ journey for JD.com’s products.

Read the full story here.

2. Pos Malaysia signed a bilateral arrangement for collaboration in ecommerce

Pos Malaysia signed a bilateral arrangement with its Tunisian counterpart La Poste Tunisienne for collaboration in ecommerce business.

The arrangement covers cooperation in areas such as developing and enhancing the ecommerce portfolio in terms of exchanging ecommerce parcels and small packets between the two parties at a competitive price.

The agreement will also serve as a platform for both parties to share information with regards to enhancing the ecommerce products, services and activities globally.

Read the full story here.

3. Recommended Reading: How will fashion retailers crack the last mile in ecommerce business?

Last mile remains both the most challenging and costly segment of the ecommerce journey, accounting for nearly 50% of the total cost of delivery.

For retailers, efficiency in the last mile translates into both savings and a more pleasurable transaction for the consumer.

“The main challenge for companies is that the last mile matrix is getting increasingly complex with all the different delivery channels. In order to succeed, retailers will have to orchestrate their logistics matrix strategically.”

Read the full story here.

A bit about Malaysia

Malaysia is one of Southeast Asia’s smallest nations, but that hasn’t affected its digital ambitions. In 2015, Malaysia’s ecommerce market was estimated at $1 billion and is on equal footing with Singapore in terms of market size and developed infrastructure, which may explain why the nation’s ecommerce industry is expected to increase by 8X to $8 billion within the next ten years.

It is no surprise then, that Alibaba recently announced the construction of a regional distribution hub (e-hub) that will act as a centralized customs clearance, warehousing and fulfillment facility for Malaysia and the Southeast Asian region in order to speed up clearance for imports and exports. The hub is set for a launch in 2019.

Out of the e-hub was born the Digital Free Trade Zone (DFTZ) – a joint initiative by Prime Minister Najib Razak and Alibaba Group to accelerate Malaysia’s digital roadmap that aims to double ecommerce growth from 10.8% to 20.8% by 2020.

What is the free trade zone?

In March 2017, Malaysia formally launched the Digital Free Trade Zone initiative at the Global Transformation Forum. This is the first digital global trade platform beyond China, and the Malaysian government believes that a collaboration with Jack Ma will increase SMEs’ contribution to the nation’s GDP, which currently stands at 37%, despite 97% of businesses in Malaysia currently being micro or SMEs.

The free trade zone is composed of three zones:

    1. The satellite services will facilitate end-to-end support and knowledge sharing for companies targeting the Southeast Asian market.

 

    1. The eFulfillment Hub will be connected to Hangzhou’s Cross-Border ecommerce pilot zone – Alibaba’s HQ – via Alibaba’s OneTouch platform. According to VulcanPost, it will digitise many of the trading operations like customs clearance, foreign exchange services, financing services and logistics solutions which will ease bilateral trade.

 

  1. The eServices platform is virtual and will complement the satellite services and Ma’s e-hub by digitally connecting users with government and business services.

Through DFTZ, the purchase of goods via the Internet worth $276 and below will be exempted from paying tax. Currently, goods worth $115 and below purchased online were not subjected to tax.

But what does the free trade zone really mean?

The partnership between Jack Ma and the Malaysian government was born from Ma’s concept of providing SMEs the infrastructure and overcome difficulties involved in conducting global trade – namely clearance and inspections.

If successful, DFTZ has the potential to double the growth rate of Malaysian SMEs’ goods export and create 60,000 direct/indirect jobs by 2025.

It is also estimated to support US$65 billion worth of goods moving through DFTZ.

“The establishment of DFZ would stimulate the economy as it gives room for online traders to compete in a healthy environment. Locations of the businesses will no longer be a hindrance to traders. For instance, a trader in Kota Belud would have an equal opportunity to market or sell his items, as a trader from the Klang Valley,” said Abdul Rahman, Head of Economic Planning Unit.

Although it is currently too early to quantify the benefits of the digital free trade zone, analysts have predicted that its launch will be good for the logistics sector. More specifically, for Malaysia Airport Holdings (MAHB) and postal company Pos Malaysia’s subsidiary, KL Airport Services.

The heightened connectivity should propel the growth and development of ecommerce in the region, lower trade barriers and benefit local players due to increased opportunities.

However, it isn’t simple infrastructure that Malaysia is building.

In order to create a functional logistics ecosystem that can improve regional level trade, it requires collaboration from various parties, companies and more. The success of the digital free trade zone also depends on the rate of retail growth – both offline and online in Malaysia and the region because it will need to grow in tandem with the scale of the free trade zone itself.

To leverage from the initiative, smaller players and SMEs need to scale their businesses to ensure that they are ready to utilize the ecosystem.

As this is the first time the free trade zone has ventured out of China, it simply cannot be a copy and paste of what has worked in the past with Chinese SMEs. Smaller Southeast Asian companies currently need help in shaping their businesses, along with help in lowering trade barriers.

Although the free trade zone will surely bring opportunities, SMEs will also need to be ready for 2019, as increased opportunities often come with increased competition.

Here’s what you need to know today.

1. Lazada partnership a ‘major positive’ for POS Malaysia

HLIB Research has issued a ‘hold’ call on Pos Malaysia Bhd, with a raised target price of RM6.08, following the company’s Memorandum of Collaboration with Lazada Malaysia.

Under the agreement, the two parties will collaborate and develop an ecommerce ‘Regional Distribution Centre’. The successful execution of this collaboration will propel strong growth for the group’s courier, transhipment, logistics (KLAS) and warehousing divisions in the long-term for Pos Malaysia.

Read the rest of the story here.

 

2. Vietnam’s Alibaba is building an ecosystem around commerce and fintech

Vietnam is now following the footsteps of China to bring physical retailers to go online. Just like how Alibaba helped China to become the best mobile payment, nearly 50 times greater than those in the US last year, NextTech is becoming a gateway in Vietnam to digitize traditional business into ecommerce.

“As you stroll the streets in Hanoi, you find out the most of the shops on the street are traditional ones. We want to digitize them and create a platform for commerce, fintech, logistics, incubation, and investment,” says Nguyen Hoa Binh, chairman of NextTech.

Read the rest of the story here.

 

3. Recommended Reading: How custom footwear retailer Shoes of Prey cut its delivery time to two weeks

Shoes of Prey’s e-commerce site offers trillions of variations of heels, boots, flats and sneakers, which shoppers can tailor themselves — they start with a blank-canvas silhouette shoe style, and then choose material, color, toe shape, heel height and width.

“We’re heading to a future where customized product is the norm, and so the immediacy of that product is extremely important,” says founder Jodie Fox.

Shoes of Prey’s factory, located in China, has allowed the brand to double production volumes without increasing its workforce. The company does not disclose specific production or revenue figures, but its 2016 end-of-year report said that, to date, customers had designed 6 million shoes.

Mass customization at scale has come closer to a reality for retailers hoping to differentiate themselves in a crowded market by offering bespoke products.

Read the rest of the story here.

Shopee empower mothers in Malaysia

source: Shutterstock

GARENA online-backed C2C (consumer-to-consumer) marketplace operator Shopee has set aside $250K (RM1 million) to help mothers in Malaysia become entrepreneurs.

They are hoping to overcome the three most common barriers these ‘mompreneurs’ face; high cost structure, insufficient knowledge on how to sell online, and lack of marketing exposure.

“With the extension of our free shipping programme, expansion of Shopee University, and increased marketing efforts, we hope to have 10,000 mompreneurs on Shopee by end-2016,” said Ian Ho, Shopee regional managing director.

Shopee Malaysia is collaborating with the Women’s Aid Organisation (WAO), a non-profit organisation that provides counselling and shelter for abused women and their children, to support mothers who want to start their own online business. Empowering women is an important move as they’re alone create an untapped market of $2.4T in Southeast Asia.

Syllabus for Shopee University for the Malaysian market is similar to the one in Singapore, with three tiers: Beginner, advanced and expert. The beginner stage would be how to use and sell on Shopee, while the more advanced stages will include mentorship by Shopee professional trainers, including ways to tailor local Facebook and Google Ads.

National courier Pos Malaysia has also agreed to let Shopee use post offices across Malaysia to organise classes for its sellers and will help to educate on how to pack items properly before shipping them out. The number of classes will be increased between three and six per month from the previous one or two.

Shopee operates its C2C marketplaces in Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. It has seen over 13 million downloads of its app, and there are more than 26 million product listings across all these sites. In Malaysia alone, they have over one million users and one million product listings on our platform. While eventually plan to monetise the platform, they are focusing on customer service, and building the platform and the ecosystem for now.