Cross-border SEA sellers battle rise of Chinese platforms

Overseas orders make up 80% of Poong Craft’s monthly revenues, essentially enabling Tran Thi Tuyet Hoa to make ends meet in Vietnam via her online store on Shopee.

Over the past year, the platform has made Hoa’s hand-crocheted flowers available in places that she has never been to, such as Singapore, Malaysia, and Taiwan.

Thanks to ecommerce giants such as Shopee and Lazada, which have lowered entry barriers for Southeast Asian sellers, small businesses in the region have been able to internationalize closer to home.

Image credit: Timmy Loen

But what Hoa is constantly concerned about is the abundance of comparable Chinese products available in the international market. “They are often priced much lower, sometimes even at half the cost of my products,” she says.

A Deloitte report released this year found that cross-border digital sellers worldwide are viewing emerging markets as the new “gold mines,” with Southeast Asia as a key target market.

But industry insiders say that these going-global merchants in Southeast Asia still perceive significant barriers. These include intense competition with the likes of China, stricter overseas policies and regulations, rising operating costs, and increasingly restrictive platform rules.

Is Southeast Asia truly a gold mine?

According to Deloitte Research, 38.5% of Chinese cross-border ecommerce enterprises have entered the Southeast Asian market, including giants such as TikTok Shop, Shein, and Temu.

These big platform players, along with regional entities such as Shopee and Lazada, often apply a fully managed model to help online merchants with international logistics, including shipping, customs clearance, and payments.

“This streamlined approach reduces operational risks, enabling sellers to expand internationally without setting up foreign offices or managing complex supply chains,” notes Zhou Junjie, chief commercial officer at Shopee.

See also: Temu’s price game not enough for Southeast Asia

Shopee first launched a platform for cross-border sellers in Southeast Asia in 2019. It began in Malaysia and has since expanded to Indonesia, Vietnam, Thailand, and the Philippines.

In Vietnam alone, the platform has driven an 8x increase in international sales since 2022, with more than 350,000 local SMEs and 1,000 brands accessing ASEAN markets through Shopee.

Since August, Chinese shopping platform Taobao has been offering free international shipping on clothing purchases to shoppers in Singapore, Malaysia, South Korea, Taiwan, Hong Kong, and Macau. The program also covers return costs and redirects returned items to Taobao’s global warehouses, reducing risks for cross-border sellers.

Competition in the global market

Not meant to replace China