The region has gained greater attention following the official launch of ASEAN Economic Community (AEC) at the end of 2015. ASEAN refers to the Association of Southeast Asian Nations.
With a combined GDP of over $2.6 trillion, the collective ASEAN economy is the seventh-largest in the world and the third-largest in Asia. Its population is also the third-largest in the world with 625 million people.
Against this backdrop, Korean firms are stepping up efforts to expand their presence in the region but struggling to grow due to high entry barriers, market complexity and fierce competition with global players, particularly those from Japan and China.
Will Ross, CEO of Lazada Crossborder, said Korean firms should capitalize on the e-commerce boom in ASEAN to strengthen their foothold in the region.
With more than 100,000 local and international sellers, Lazada is the number one online shopping mall in Southeast Asia, present in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Lazada Crossborder is the firm’s sourcing hub based in Hong Kong to serve onboard sellers from Hong Kong, China, Korea, Taiwan and Japan to enrich Lazada’s selection of products to the growing e-commerce consumer base in the region.
Ross, who is in charge of acquiring and developing sellers across the world, said ASEAN’s e-commerce market will provide great opportunities for Korean sellers thanks to the region’s growth potential.
“E-commerce has a huge growth potential in Southeast Asia, home to over 560 million consumers,” Ross said in a recent interview.
“With only about 3 percent of retail conducted online in the region, there are significant opportunities for growth in Southeast Asia.” He compared this with 11 percent in China and 13 percent in the U.S.
Ross, who recently visited Singapore to host the K-Beauty Showcase 2017 together with the Singapore office of Korea Trade-Investment Promotion Agency (KOTRA), stressed that Korean sellers should pay attention to two converging factors ― continued mobile and internet penetration, and the huge popularity of Korean products and culture.
Citing an AT Kearney report, he said the region’s online retail has the potential to grow at up to 25 percent per year on the back of increasing purchasing power, growing internet penetration and improving online offerings.
Winning hearts of ASEAN consumers
In particular, he believes Korean companies are able to benefit from hallyu, or the Korean wave, that continues to rise in ASEAN nations.
“Korean culture has slowly found its way, winning the hearts and minds of a wide range of Southeast Asian consumers in a way reminiscent of Hollywood's global ascendance in the postwar era,” he said.
He pointed out it is now entering a new era of evolution driven by business innovations by, for example, focusing on cross-selling and key opinion leaders in multimedia.
“For example, if you go to Singapore, Malaysia or Thailand, you will see people listen to Korean songs, follow Korean dramas and turn to them for style inspiration, making South Korea clearly the tastemaker du jour of Southeast Asia,” he said.
“In Southeast Asia, Korea in itself is a brand with immediate connotation to quality products, in particular health and beauty.”
Ross said Korean brands across several categories have already entered the market successfully.
“Health and beauty, home appliances, electronics and fashion are the key categories at the moment but the market is open for more.”
Lazada aims to attract more Korean sellers to help them tap into the region’s booming e-commerce scene.
“With the ever-growing influence of Korean products and culture in Southeast Asia, the Lazada and KOTRA collaboration is our commitment to deliver the best-in-class online retailing experience to our sellers and a premium shopping experience to our customers,” he said.
In cooperation with KOTRA, Lazada hosted the showcase event in six Southeast Asian countries ― Malaysia, Singapore, Indonesia, Thailand, the Philippines and Vietnam ― from July 18 to Aug. 8.
“At Lazada, we help Korean sellers capture this opportunity. We guide the sellers in finding tailored solutions whether the seller focuses on health and beauty or fashion,” he said.
However, he said that while the region is full of opportunities, the barriers of entry are also high.
“Southeast Asia is a vast and diversified market, where each country has its own distinct culture, payment and spending habits,” he said. “The lack of logistics and payment infrastructure is also a problem.”
Key success factors in ASEAN
The Hong Kong-based chief executive boiled down Lazada’s key success factors in Southeast Asia to three things ― end-to-end ecosystem enabled by best-in-class logistics and payments capabilities, tailored seller support program and quick response to consumer demands.
“We empower our sellers with our end-to-end ecosystem to address key challenges in Southeast Asia,” Ross said.
“Our unique business model as well as tailored seller support program allow the online portal to successfully distinguish itself as a secured, effortless one-stop online shopping and selling destination for both buyers and crossborder sellers.”
He said new technology is changing the e-commerce market landscape.
“Technology is bringing new disruptions, online sellers are becoming quicker to react to market changes in a way that traditional retailers can’t, and consumers are embracing online shopping at an exponential rate of growth,” he said.
To brace for the era of the Fourth Industrial Revolution, Lazada is now exploring artificial intelligence (AI) and associated machine learning and natural language processing.
Ross said his firm is seeking to use internet bots to help respond to a list of query options on orders and recommend the most relevant products to users based on their interests.
Source: The Korea Times
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
