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Singaporean netizens rank at 4th place globally for sessions per year on Amazon, when judged in proportion to the number of internet users. That puts them just marginally behind Canada.

Source: SimilarWeb/World Bank

It’s probably one of the reasons why the company chose to enter Southeast Asia via Singapore; not only is there is an internet-savvy population with a high credit card penetration, consumers already have a stated preference to transact with the platform.

Amazon wasn’t physically present in Singapore until last year but the company’s white-label electronic products such as the Echo Dot and Kindle have been stocked and fulfilled by Lazada Singapore through grey market sellers as far back as March 2015, according to analytics platform BrandIQ.

Demand for Amazon in Singapore

BrandIQ mapped the number of reviews on Amazon products on Lazada SG over a three-year time period. When compared against Google Web Search data from Google Trends, there was a direct correlation between the volume of reviews on Lazada and Google search interest for Amazon from Singapore – until the marketplace’s official launch in July 2017.

Source: BrandIQ/Google Trends

Amazon products on Lazada witnessed a spike of product reviews towards the end of 2015, coinciding with the September 2015 announcement of the Fire Tablet and Fire TV product lines.

Google Trends data shows a very similar spike to that of product reviews on Lazada in December 2015, which can be attributed to the holiday season and popularity of the new Fire product lines.

A very similar trend was also witnessed in 2016; product reviews rose following the September 2016 announcement of the new Echo Dot product, with corresponding spikes in both Google Web Search and Lazada product reviews in December 2016.

Web search interest in Amazon reached a crescendo in July 2017 following the Prime Now launch in Singapore. This event also marked the first inverse trend between web searches for Amazon and product reviews on Lazada. While the number of product reviews grew approaching the December 2017 holiday season, it never recovered to 2016 or 2015 levels, suggesting decreased interest across Lazada following Amazon’s entry.

There’s a correlation between Amazon product launches and their popularity in Singapore based on reviews by certified users, but what does it mean?

Rival on Lazada’s marketplace

Despite Amazon’s belated entry into Southeast Asia, its products are still ranking high on Lazada.

The interesting part is that the products in question; Amazon Fire TV, Kindle, and Echo are simply unavailable on Prime Now and can’t be shipped to Singapore from AmazonGlobal, it’s international shipping site.

Instead, these products are sold and fulfilled by a multitude of grey sellers on Lazada such as GeekBite, that has been active on the platform for 3+ years.

Despite its Amazon Prime Now offerings for free international shipping, some of Amazon’s best selling items can’t be shipped to Singapore

There’s clear demand and interest for Amazon products, which leads us to the question: why is a customer-obsessed Amazon content with grey market sellers fulfilling this need?

Standard industry practices indicate that well-known brands often find a crowded grey market for their products to be a cause for concern. Leaving grey sellers to fulfill local demand for foreign products results in brands losing control of their brand image, as delivery, packaging, and warranties from grey sellers usually don’t correspond to the same brand guidelines adhered to by the company.

The answer here is likely linked to the outdated industry distribution rights for television/movie content on the Fire platform and e-book rights for the Kindle. Content distribution rights are negotiated geographically, and local distributors commonly have long term contracts with content producers. Amazon either hasn’t prioritized, or is still in the process of securing distribution rights for Southeast Asia, and thus can’t make these products available to purchase.

What Amazon is falling short of, grey market sellers are picking up admirably. In the electronics categories including “Tablets” and “Video” on Lazada, Amazon products rank in the Top 10 when sorting by “Popularity”. The Amazon Fire TV Stick and Amazon Kindle stand out within their own respective categories.

The prices of items like the Kindle are also marked up by almost 23% (US$79.99 on Amazon US vs US$103 on Lazada SG) and the Echo Dot is marked up by 15% (US$49.99 on Amazon US vs US$59 on Lazada SG).

Singaporean consumers itching for the new Amazon items are stuck with purchasing through grey sellers on Lazada, like local reseller SGKindleShop, who offers the Kindle for US$155, or like forwarder shipping service like comGateway, which can set you back another US$15 for the US$79 Kindle, only slightly cheaper than the US$103 price tag on Lazada.

Cost of shipping a 1kg package using a forwarder shipping service from the US to Singapore.
Prices in SGD

Amazon is missing out on a large potential revenue source by foregoing some of its best selling products on Prime Now. It’s also unable to cross-sell by offering enhanced product warranties, which are an important addition to overall product revenue streams.

Unless Jeff Bezos makes a conscious decision to include Amazon’s products on Prime Now SG, it’s going to continue to cede the market to grey sellers on its largest regional competitor.

Osman Husain of ecommerceIQ contributed to this report.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’s TOP MARKETPLACE

Here’s what you should know:

1. Amazon hiring taxis to fulfill the demand of Amazon Prime in Singapore

As the launch of Amazon’s Prime Now Singapore is met with a high demand, the company has resorted to booking taxis — on top of tapping freelance drivers — to make deliveries.

Transport operator ComfortDelGro confirmed bookings through its call centre by Amazon Prime. Meanwhile, ride-hailing apps Grab and Uber have said their drivers are also free to explore other sources of income.

Drivers in Singapore is said to earned an hourly rate of up to S$30 from making Amazon Prime deliveries.

This move is likely taken as temporary measure before Amazon put a more efficient delivery infrastructure as it is defied the company’s strategy in the US, said transport economist Walter Theseira from the Singapore University of Social Sciences.

Read the full story here.

2. PayPal opens innovation labs in India

US-based PayPal has launched its third Innovation Labs at the Chennai and Bengaluru technology centres, after opening such facility in the US and Singapore.

The lab will serve as a platform to promote innovation in the newest technology areas across diverse fields including machine learning, AI data science, internet of things (IoT), and augmented reality/virtual reality (AR/VR).

The company is looking to diversify its employee pool to address new age innovation so that new solutions can come from mobile first and mobile savvy countries like India which is innovating solutions for the other emerging economies as well.

Read the full story here.

3. Singapore’s Temasek may come to the SoundCloud’s rescue

Temasek Holdings and boutique-bank Raine Group are buying SoundCloud’s stakes that would help stabilize the owner of the popular music-streaming service.

The deal could be closed by the end of this week but the terms of the deals weren’t immediately available.

The Berlin-based startup has failed to generate money despite attracting more than 175 million users. As a result, it laid off 40% of its staff earlier this month, and closed offices in San Francisco and London.

Read the full story here.

 

Here’s what you should know:

1. Grab starts full operations in Myanmar

After four-month trial period, Grab has begun full operations in Myanmar by launching localised apps with new safety and technology features.

Myanmar is the seventh market for Grab where it already has 5,000 drivers registered in its Myanmar’s network. The drivers is said to have seen 30% growth in their average income during the trial period.

Grab is also rolling out GrabVenue terminals at major shopping malls in Yangon that will allow customers without a smartphone to access the service.

The company claimed to have more than 1.1 million drivers in 65 cities across the seven countries and has recently raised $2 billion to strengthen its operations in Southeast Asia.

Read the full story here.

2. Malaysia’s parliament passed two bills legalizing e-hailing services 

Malaysia’s parliament passed two bills that will legalize the e-hailing services like Grab and Uber in the country.

The amendments will allow the services to operate on an “intermediation business license”, a new category specific for the service.

The new license will regulate “the business of facilitating arrangements, bookings or transactions of an e-hailing vehicle whether for any valuable consideration or money’s worth or otherwise”, according to Malaysia’s Land Public Transport Act and the Commercial Vehicles Licensing Board (CVLB) bill.

The bill is supported by the cabinet even as taxi driver associations protested. The CVLB had previously declared that both Uber and Grab drivers were operating illegally in the country.

Read the full story here.

3. Amazon’s entry into Singapore marred by delivery problem

The company is unable to deliver goods to customers in Singapore after introducing its Prime Now two-hour delivery service in the state-country.

As of Friday afternoon, its Prime Now app was telling users that “delivery is currently sold out. Check back soon.” The service appeared to go down hours after its official launch on Thursday, according to media reports.

The company launched Prime Now app for customers in Singapore where they can shop and get tens of thousands of items delivered to their door with free delivery on orders of more than S$40 ($29). The service is available for trial for free for a limited time in Singapore, before the company rolls out its Prime membership program.

Read the full story here.