The companies now trying to launch or increase online sales range from big multinationals to small local outfits. SMEs are especially keen because ecommerce lets them sell across national borders to reach consumer markets throughout the region and beyond. Small businesses don't even need to develop their own e-commerce platforms, thanks to popular online malls and marketplace websites like Alibaba, eBay and Thaisecondhand.com. Bricks-and-mortar stores used to worry about online cannibalization, but now they see that internet sales tend to complement and increase in-store sales, helping them reach as many potential customers as possible. Shoppers today prefer to gather lots of information before buying, so engaging them online is important even if they make the final purchase in the store
Companies focusing on the mass market should first target ecommerce via mobile platform (m-commerce). In countries like Cambodia, Laos, Myanmar and Vietnam, where internet penetration remains low, online purchases via cell phones are climbing rapidly. A survey by Nielsen in August 2014 found that 58 percent of Vietnamese internet users have made online purchases via cellphones, compared to the global average of 44 percent.
Asean's e-commerce sector is highly fragmented, with a large number of small players. Consolidation is likely, because companies need to gain scale in order to offer a wider variety of products, increase their bargaining power with suppliers and boost logistics efficiency. Small players will be pressured to team up or be acquired because they face fierce competition from large ecommerce development groups like Rocket Internet, which owns the popular Lazada and Zalora shopping sites. Amazon and Alibaba are beginning to establish strong bases in the region, increasing pressure. One recent acquisition in Thailand was the purchase of trendy goods site Moxyst.com by WhatsNew, a retail ecommerce group. Alibaba acquired a stake in Singapore Post, whose international shipment network and airport warehouses will facilitate faster, cheaper shipping for ecommerce.
Rising competition means it helps to seek out unexploited opportunities. Countries that might appear to be less attractive, such as Myanmar, with its weak telecommunications infrastructure, could actually be worth targeting if it is possible to secure a first-mover advantage. Rocket Internet, for example, decided to pioneer online stores in Myanmar in anticipation of high growth in the future.
Small firms should focus on niche markets in which they can specialize in order to outperform larger, less nimble competitors. For example, Miss Lily, the online flower ecommerce succeeds in utilizing its expertise in fast delivery of fresh and delicate products by expanding its product line such as fruit to fulfill the demand of customers. Another option is to form partnerships with other small companies. Whatever the product, successful ecommerce demands studying the needs and behavior of consumers in each market. Companies that truly understand their online customers and respond effectively will profit most from the epochal opportunities now emerging.