Southeast Asia is the New EU (eCommerce Union)

Whenever the EU is mentioned, the European Union is probably the first thing that comes to mind. But did you know there is another EU that’s fostering a new wave of inter-country growth right here in Southeast Asia?

The region’s new eCommerce Union has the potential to radically transform ASEAN economies for the better.

This is hardly surprising. With growing internet connectivity and a high proportion of young digital natives in Southeast Asia, some predict that the region’s online economy will be worth a whopping USD300 billion by 2025.

Since 2015, the region has added more than 100 million internet users, many of which are young users aged 15 to 19. It is this new generation of mobile-first, digital natives that will pave the way for exponential eCommerce growth with their needs and wants for an omnichannel customer experience.

(Source: Temasek, Google and Bain & Company, 2019))

(Source: DataReportal, 2020)

Many businesses are already conducting cross-border sales today, especially through marketplace platforms like Shopee, Lazada, Qoo10 and Zalora. What has changed is the accelerating rate of initiatives introduced by governments and the private sector to help businesses fully tap into this huge opportunity in eCommerce.

For example, Malaysia launched a Digital Free Trade Zone as part of the Alibaba Group-led Electronic World Trade Platform (eWTP) initiative, designed to enable storage, fulfilment, customs clearance and warehousing operations more efficiently. In Singapore, a local electronic services provider CrimsonLogic introduced a solution to facilitate the electronic exchange of trade documents and help businesses meet regulatory and compliance requirements across borders faster and more easily.

On a regional level, an agreement has also been reached between ASEAN nations last January to facilitate cross-border eCommerce transactions and create an environment of trust and confidence. 

(Source: eWTP.org, 2020)

However, there are still hurdles to overcome. A report by Bain & Company in conjunction with Google and Sea, a leading consumer internet company in Southeast Asia, shared how 57 per cent of Small and Medium Enterprises (SMEs) see logistics and export processes holding back cross-border trade.

Southeast Asia’s potential for cross-border eCommerce growth is also a double-edged sword – retailers will now have to compete not just with other local brands within the market, but up and coming ones keen to grow beyond their home market.

Setting up cross-border logistics systems from scratch is likely beyond the means of many SMEs. After applying for the right licences, businesses have to ensure they adhere to the right regulations and invest in the right logistical infrastructure structure from warehousing to delivery, which differs from market to market. For example, the ‘de minimis’ value for parcels to qualify for free duty still varies widely across Southeast Asian countries – from US$290 in Singapore, to US$40 in Vietnam.

(Source: Global Express, 2019)

A brand’s success – or even its very survival – may come down to how it can ensure seamless, safe and frustration-free delivery to consumers, meaning it may make more sense to work with an experienced cross-border and omnichannel logistics partner.

As a leader in supply chain solutions, UrbanFox’s unique omnichannel approach to warehousing, inventory management and last-mile fulfilment of goods has empowered customers to expand their operations and better serve their customers.

This omnichannel approach also enables brands to tap into multiple eCommerce channels, integrating e-marketplaces (Lazada, Shopee and Qoo10, etc.) and brand sites (brand.com) through UrbanFox’s channel management solution.

To help brands tap into the vast eCommerce opportunity in the region, UrbanFox recently launched its digital cross-border solutions in April, offering intra-ASEAN routes with a key focus in shipments between Singapore and Malaysia.

Retailers are able to enjoy seamless cross border shipping for eCommerce packages between Singapore and Malaysia within two to four working days, with full end-to-end tracking visibility. This one-stop solution means brands can have peace of mind, by being able to manage inventory centrally across borders, and without having to manage deliveries to overseas customers.

This new service covers loose parcel and direct-to-doorstep deliveries as well, helping smaller businesses to also take part in the eCommerce journey underway. UrbanFox also plans to introduce new routes connecting the whole of Southeast Asia to China and Australia in due course.

Having worked with more than 500 brands across different verticals, UrbanFox can help businesses to capitalise on the burgeoning online economy in Southeast Asia with this new suite of cross border eCommerce solutions.

About UrbanFox

As an Omnichannel enabler, we empower homegrown and global brands to strengthen their presence in the region through integrated B2B2C fulfilment, cross-border and last-mile distribution, real-time inventory, and online-to-offline retail management.