For Ganesh Kumar, executive chairman of Commerce.Asia, there is one underlying fact surrounding e-commerce in Southeast Asia – if you’re a business that doesn’t participate in e-commerce, you could be killed.
Ganesh was speaking as part of the Top in Tech Talk series by Digital News Asia and Malaysiakini, which latest episode delved into e-commerce and retail innovations in Malaysia. Joining Ganesh was Clarence Leong, founder and CEO of EasyParcel, as well as Jason Wong, general manager of hoolah Malaysia.
The e-commerce industry in Southeast Asia, Ganesh says, is the fastest growing sector in one of the fastest-growing regions in the world. Getting onboard isn’t just inevitable, but necessary.
The numbers certainly indicate as much. In 2019, e-commerce in SEA was a US$38 billion industry – a number that is expected to hit US$170 billion in 2025, according to Google and Temasek’s eConomy SEA 2020 report. In Malaysia, the industry was worth US$3 billion in 2019. It will likely grow to a US$13 billion sector by 2025.
[RM1 = US$0.241]
This is all further compounded by the Covid-19 pandemic, which Ganesh describes as the greatest accelerator in e-commerce. Add to it the growing population in the region, plus a high number of existing and new internet users, and you have a proverbial tsunami that will bring sweeping influence across SEA.
But it isn’t just about embracing e-commerce. As the panel explored, it’s also vital for businesses to keep an eye on e-commerce’s innovations and trends in order to stay ahead.
For Ganesh, the current innovation in e-commerce to look out for is live commerce, essentially e-commerce combined with live-streaming. Live commerce has already taken China by storm, where its live commerce industry is expected to hit US$157.7 billion in 2020, according to a KPMG and AliResearch report.
The thing to focus about live commerce is how its purchasing process differs from purchasing from a web store. Ganesh says that consumers enter e-commerce marketplaces with the intent to purchase a product. Live commerce isn’t about intent anymore, but “entertainmerce”, where the merchant pushes a product to the buyer.
What more, our buying behaviour is not against it, Ganesh notes. He points to the success of TV commerce, which helped local media like Astro and Media Prima gain positive growth last year. Commerce.Asia, the e-commerce ecosystem platform, has already made headway into live-commerce, having invested in a joint venture with Netccentric to acquire and develop technology that aids live commerce sellers handle back-end processes.
Jason Wong, on the other hand, is already entrenched in one of e-commerce’s latest and most intriguing innovations. hoolah is one of the most prominent Buy Now, Pay Later (BNPL) companies in the region.
BNPL essentially allows merchants and customers to split payment of a product into three more manageable and interest-free portions, which makes purchasing more accessible and also helps merchants convert more sales.
For Wong, a lot of companies adopt e-commerce expecting people to “go with the flow” of picking items and digitally checking out without issues. In reality, the process is also tinged with uncertainty and decision-making.
Wong says that a key aspect of e-commerce today is reducing that friction and ease conversions. “I think having a frictionless option of BNPL is where we’re changing the landscape,” he says. “The product innovation is to reduce the price of a purchase decision.” (Ed Note: this episode of Top in Tech is done in collaboration with hoolah).
Wong observes that merchants who have engaged with hoolah saw an increase of younger customers that they couldn’t previously tap until they offered a more robust payment option. What more, these conversions happen without the need for discounts, just more convenient and accessible payment options. “It’s this mindset shift that will change the e-commerce scene,” Wong predicts.
The way ahead
For Clarence Leong, founder and CEO of EasyParcel, innovation comes in the form of digitalisation. EasyParcel is a logistics service platform that allow you to check for delivery rate from different courier companies and book for delivery online.
During the first movement control order (MCO) period in Malaysia due to the Covid-19 pandemic, EasyParcel noticed that their customers could not send out their parcels because they lacked the office equipment (like printers, ink and paper) to print out an air waybill.
They proceeded to launch the Pgeon Paperless delivery service, which allows their customers to only write the sender’s contact number and air waybill number on the parcel for EasyParcel to make the delivery. EasyParcel would also pick up the item on their customer doorsteps for free.
For Clarance, startups and businesses within the e-commerce space would need to innovate with the industry. Yet, innovations need not be complicated. “Sometimes, we need to think from a very simple perspective. Don’t overcomplicate things,” he says.
Going forward, Clarance believes the next step in e-commerce innovations would be focused on logistics – in how technology can be optimised to reduce delivery times and support their logistics team. One challenge, Clarance says, is to enable more retail points so that a product can be dispatched from a localised area rather than from a central warehouse, thus reducing time.
Ganesh, on the other hand, believes that augmented reality (AR) and 3D visual technology will play a big role in the near-future of e-commerce. High-quality photos and videos of products may not be enough in the near future – 3D versions of the products that customers can view before purchase will become the next big thing.
“The tech is already there,” he says, pointing out that holographic technology can already put a person on stage.
For Wong, the experience of e-commerce is most important. The next
innovation will be how businesses provide a shopping experience – of
experiencing and feeling a product virtually before purchasing – will be the
biggest retail innovation going forward.
Watch the replay here: