Santitarn Sathirathai

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1b:T67b,{"@context":"https://schema.org","@graph":[{"@type":"ProfilePage","@id":"https://kr-asia.com/author/santitarn-sathirathai","url":"https://kr-asia.com/author/santitarn-sathirathai","name":"Santitarn Sathirathai | KrASIA","isPartOf":{"@id":"https://kr-asia.com/#website"},"breadcrumb":{"@id":"https://kr-asia.com/author/santitarn-sathirathai#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https://kr-asia.com/author/santitarn-sathirathai"]}]},{"@type":"BreadcrumbList","@id":"https://kr-asia.com/author/santitarn-sathirathai#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://kr-asia.com/"},{"@type":"ListItem","position":2,"name":"Archives for Santitarn Sathirathai"}]},{"@type":"WebSite","@id":"https://kr-asia.com/#website","url":"https://kr-asia.com/","name":"KrASIA","description":"Decoding China's tech and business 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Using the past month to let some of these themes take shape, I’m sharing what we might expect to see for this hugely exciting industry, in an equally thrilling and promising region. E-commerce in Southeast Asia - a global growth bright spot Broad-based economic growth may become a scarcer commodity in 2019, owing to near term macro factors such as global trade tensions and rising interest rate environment. But in a potentially challenging year ahead economically, Southeast Asia’s digital economy is likely to be one of the global bright spots here. A number of structural drivers and strong fundamentals contribute to this optimism. E-commerce in the region has grown by more than 62% CAGR over the past 3 years according to the Google-Temasek e-Conomy SEA 2018 report. The report also estimates that e-commerce will exceed $100 billion in GMV by 2025, from $23 billion in 2018. Despite such astonishing numbers, online commerce remains hugely underpenetrated, at around 2 -3 % of total retail sales. This pales in comparison to around 20% and 10% in China and US respectively. As such, we expect that in 2019 the digital economy – and e-commerce in particular – will continue to shine. The emergence of experiential e-commerce - discovery, entertainment and social engagement At a time when consumers have limitless shopping choices, both offline and online, experiences are the new currency. Consumers want more than just to shop for what they need – they want to discover new products, be entertained, and even engage with the community and friends. As a result, online shopping in Southeast Asia is becoming an increasingly social, increasingly immersive experience. Increasingly, e-commerce apps in our region are not simply in-and-out transactional platforms for consumers. Rather, consumers may dip into the app without a prior desire to buy specific items and instead simply browse through products and deals curated by e-commerce platforms. Consumers may also want to chat with sellers to learn more about different products, or catch up on the social feeds of their friends or family. They may even come to e-commerce apps to consume content. For example, one of Shopee’s most popular new features is an interactive in-app quiz that you can play with family and friends, hosted by celebrities. As the boundaries between shopping, social and entertainment fade, time spent on apps and the ability to retain the attention of users will likely become more important performance metrics for e-commerce platforms. Offline retailers and e-commerce platforms build non-zero sum partnerships Some observers have long assumed that offline retailers and e-commerce platforms are locked in a zero-sum rivalry - for one to succeed, they must take a consumer away from the other. 2019 will see that paradigm challenged more than ever before, as more offline retailers engage e-commerce platforms as trusted partners, even the brands who already have some online presence. Beyond just transacting online (listing and selling, processing payments and arranging for the necessary logistics, etc.), traditional brick-and-mortar stores are increasingly looking towards e-commerce platforms to manage their overall online strategy and offline logistics needs. This signals a shift in the role e-commerce platforms play; towards becoming trusted e-commerce partners. Stores coming online and placing their trust in e-commerce platforms could potentially reap the many benefits that the partnership offers, from data utilisation and predictive technology, to more effective advertising and promotion and fulfilment services. In other words, the offline-online retail industry is not a zero-sum game; offline stores and large online platforms have become complementary players. We are already seeing a rising number of large retail chains and consumer goods company partnering with e-commerce platforms in the region – recent examples include Miniso in Singapore, Nestle in Malaysia, and BigC in Thailand – and we expect this trend to continue in 2019. Unlocking hidden assets in Southeast Asia As a digital platform, e-commerce marketplaces empowers entrepreneurs and brands of all sizes to reach beyond their local markets, beyond the well-penetrated Tier 1 cities. In places like Indonesia, the growth of the upwardly mobile generation of middle-class consumers and rapidly improving smartphone penetration means the importance of consumers outside the capital regions (Jabodetabek) is constantly rising - this group accounts for approximately 90% of the total population of Indonesia, yet has traditionally been an afterthought in many brands’ retail strategies. This afterthought might soon be the centre of focus for many bands this year. But this isn’t a one-way flow of goods. In fact, budding entrepreneurs and SMEs from beyond the Tier 1 areas are also finding that e-commerce enables them to tap into new market opportunities. Take the example of Ibu Vina from Bali in Indonesia. She produces high-quality, false eyelashes and began with a small store. But selling offline was difficult as rents were high and it was difficult to scale just by relying on foot traffic and going door-to-door to neighbourhood salons. At first, she only sold 100 pairs of eyelashes per month. In April 2017, however, Ibu Vina made the decision to shift her business online. By opening up an online store, she immediately accessed a huge market for her high-quality but affordable products far beyond her home province of Bali. They can now sell up to 10,000 pairs of eyelashes per month, a 100-fold increase. She started the shop with just herself and her husband. Today, they have more than 50 people working with them to process all the orders. 2019 will be a year of exciting change and positive growth for the e-commerce industry, from the emergence of new ways to experience commerce to platforms playing a central role for brands coming online. The article was written by Dr Santitarn Sathirathai, Group Chief Economist of Sea Group. 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