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Battle of the E-commerce Giants: Amazon comes to ASEAN

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Sat, 31 Dec. 2016
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    ASEAN Today

Retailing giant Amazon will arrive in Southeast Asia in 2017 as it opens a Singapore operation. However, existing e-commerce firms are in the process of pulling out of the region in the face of huge losses, poor infrastructure and pervasive logistics challenges.

Editorial

Amazon is planning to take the first step into the Southeast Asian e-commerce market with an upcoming launch in Singapore. Meanwhile, Alibaba’s Lazada is also looking to diversify with the acquisition of the online grocer, RedMart. But these new moves come at a difficult time for the industry. The top players in the region’s e-commerce market are losing money, even though customer and transaction numbers are rapidly growing.

Looking at the current state of play, Lazada is the most established player in the market. Rocket Internet originally started the goods retailer and its sister fashion website, Zalora, in 2012 and they have grown rapidly ever since. According to Rocket’s 2014 and 2015 financial reports, Zalora’s revenue growth rate was over 70% – driven by an expanding customer base and a strong increase in the number of transactions. However, despite Zalora’s 6.7 million customers at the end of 2015, it still showed a net loss of US$98.175 million.

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