Here’s what you need to know about the future of ecommerce in Southeast Asia

Photo credit: Pomelo.

Being the new kid on the block means that ecommerce ventures in Southeast Asia have the luxury to learn from others’ mistakes from mature ecommerce markets like the US and China.

It’s been over 20 years since Amazon (1994) and eBay (1995) were founded. Jack Ma started Alibaba in his Hangzhou apartment in 1999, right before the Internet 1.0 bubble burst. A lot has happened in global ecommerce since then, including the slow but steady march of Amazon, the quick rise and fall of daily deals and flash sale sites, and Alibaba’s blockbuster IPO in 2015. What’s next?

This historical review creates the two frameworks, the Ecommerce Lifecycle and Ecommerce 1.0/2.0, to help predict the future opportunity of ecommerce in Southeast Asia.

1. The ecommerce lifecycle – How ecommerce models evolve over time

There is a distinct pattern that has emerged from the more mature ecommerce markets’ evolution that offers a degree of prescience for ecommerce in Southeast Asia. This follows the trajectory of Classifieds and C2C to B2C to eventually Brand.com.

The US went from Craigslist, eBay and Amazon to brand sites like Nike, J.Crew and Gap. China went from Taobao, Tmall and JD to the many standalone and marketplace brand sites, like Estée Lauder, Burberry and Coach.

Today’s Southeast Asia is following a similar pattern but at a much faster pace due to “1 to n,” horizontal progress and the resulting leapfrogging behavior. In our region, we have Classifieds (OLX), C2C (Tarad, Tokopedia, Shopee), B2C (Lazada, Zalora, MatahariMall) and Brand.com (L’Oreal, Estée Lauder, Adidas) all happening at once within a very short time frame.

Figure 1: Ecommerce lifecycle model

Limitations to the model

Local nuances give rise to unique ecommerce business models

eBay could only have been invented in the US because of its auction-driven model in a consumerist culture characterized by excess goods and plenty of hobbyists (think baseball cards and Pez dispensers).

eBay didn’t work in China for many reasons, one being the auction model was not appealing to Chinese users who preferred to buy first-hand goods and to negotiate person-to-person via chat.

2. Ecommerce 1.0 to ecommerce 2.0: 4 strategies to avoid the imminent ecommerce bloodbath in Southeast Asia

The future of ecommerce in Southeast Asia