By Jax Tan on Jun 28, 2019 5:26:02 PM
There is a consensus amongst business owners and senior executives that overseas expansion is important for growing one's business. According to a report conducted by Stripe in 2019, 88% of Singaporean online businesses sell beyond the local market. This makes Singapore-based businesses the world's keenest to expand overseas in the world, followed closely by those based in Hong Kong and Japan. Even amongst smaller start-ups with fewer than 50 employees, 70% of businesses surveyed by Stripe have expanded overseas, many within their first year of operation.
Business owners have rightfully recognised the importance of overseas expansion, especially in Southeast Asia, which is currently experiencing a period of rapid growth. eCommerce in Southeast Asia remains small at the moment but is showing signs of large growth potential, especially in developing markets such as Vietnam and Indonesia. These markets are not only focused on developing technological infrastructure consumers there are also experiencing rising income levels and growing affluence. Growth in Southeast Asia will be buffeted by increasingly affordable internet accessibility and decreasing smartphone prices, removing barriers that have previously limited the potential of eCommerce in the region. Forrester Analytics predicts that eCommerce in six key Southeast Asian markets - namely Singapore, Malaysia, the Philippines, Indonesia, Thailand, and Vietnam - will almost triple in value in the next five years, from USD$19 billion in 2018 to USD$53 billion in 2023. Growth rates during this period are also expected to average 23% annually.
How Marketplaces Support Overseas Expansion
Indeed, businesses must act fast to take advantage of opportunities brought about by the rise of eCommerce in Southeast Asia. For example, businesses can now list their products on marketplace platforms such as Shopee, Lazada, Qoo10 and Zalora, making it much easier for businesses to expand regionally. From iPrice’s report “the biggest eCommerce Website and Apps in Southeast Asia 2019”, Lazada, Shopee, Zalora and Qoo10 constantly top the 3 positions of highest monthly active users.
Online marketplaces remove physical barriers, such as the need to choose a suitable physical location and renovation work, which increase expenses when expanding one’s businesses overseas, and business owners will be pleased to know that leveraging on these online marketplaces will also translate to higher sales and lower costs. For example, the rental will no longer a factor limiting overseas business expansion, since there will no longer be a need for a physical storefront. Not having a physical storefront also means being able to sell a larger variety of products round the clock and reaching consumers from various parts of a country. Being able to bypass the physical barriers, such as the retail floor area, store operating hours and geographical location, will hence increase the sales potential of the product.
Other benefits of having products listed on marketplaces regionally include increasing consumer awareness across the region. Instead of being limited to just a physical storefront in a home market, online marketplace listings help your products reach new consumers in overseas markets without needing to spend on costly advertising campaigns. Furthermore, the vast nature of the online marketplace means multiple products can be launched at once, allowing consumers to choose from a wider range of product offerings. Different markets may respond differently to the various product ranges, and large concurrent product launch on the online platform allows businesses to observe individual market trends and focus efforts on specific products more efficiently and effectively.
Consumer preference is shifting in favour of online marketplaces not only because of its wide product offerings but also because of the added advantage of shopping at their convenience, be it on their desktop or through a smartphone application. Items ordered online are also delivered directly to the consumer, saving them the hassle of needing to go shopping in stores.
Furthermore, marketplaces allow businesses to track inventories online, thus improving supply chain efficiencies and the delivery fulfilment process. This simplifies the supply chain process for businesses, a significant added advantage since expanding operations regionally through traditional methods risk complicating and overwhelming logistical operations, especially for small local businesses which are less experienced in dealing with these logistical changes. Marketplaces, such as Lazada, also have strong reputations that consumers trust, and can thus be a benefit to brands that consumers are less familiar with. This is an important factor to consider when expanding overseas since it can strengthen consumer awareness and improve consumer perception products. Logistics specialists with a regional presence can help businesses to expand and grow overseas. UrbanFox, for example, has a strong and growing presence in Singapore, Malaysia, and Vietnam, and plans to expand into Indonesia soon. It provides its customers with end to end logistics capability, meaning that overseas expansion is no longer a difficult and tedious process that it once was.
Expand Overseas with UrbanFox
UrbanFox can help businesses expand regionally in these dynamic and fast-growing Southeast Asian markets. In Malaysia, UrbanFox has partnerships with popular online marketplaces - Lazada, Shopee, Qoo10, and 11street (PrestoMall) - and more than 140,000 sq ft to cater to large amounts of inventories needed by customers. In Vietnam, our Online to Offline (O2O) Experience synergises the convenience of your the marketplace with the tangible benefits of shopping in the mall. As such, UrbanFox creates a seamless shopping experience for the consumer by combining the strengths of both the digital and the physical.
By leveraging UrbanFox's full suite of services, which includes Multi-Channel Commerce Platform (MCCP), Warehousing Space and Last Mile Delivery, eCommerce will become a straightforward and fuss-free process for businesses. This allows online businesses to take advantage of the market potential in Southeast Asia's eCommerce market easily. For example, UrbanFox's MCCP allows businesses to easily scale up and launch their businesses online by providing a centralized portal across channels. This means that businesses can manage their inventory levels on different channels, including Lazada, Shopee and Qoo10, on one unified interface. UrbanFox's MCCP not only makes it easier for business managers to monitor and respond to inventory levels across the various channels and various regions, but it also encourages optimization of the international supply chain, translating to more cost and time savings for businesses. UrbanFox's integrated inventory management system also allows businesses to stay efficient and competitive since orders can be processed and pushed into our delivery platform for fulfilment automatically.
Learn more about UrbanFox's MCCP and other ways to grow your business regionally by contacting one of our urban logistics specialists today.