The Southeast Asian e-commerce market provides opportunities and challenges for independent website sellers

In recent years, Southeast Asia has become a popular area for the cross-border e-commerce market. In the past five years, e-commerce in the region has developed rapidly. However, e-commerce suffered a certain blow in the early days of the epidemic. Many platforms banned the sale of sensitive and epidemic prevention products, and Google also restricted related promotions. This has put a large number of cross-border e-commerce sellers in trouble, prompting them to turn to independent websites as a “self-help” solution.

Compared with mature markets such as Europe and the United States, the Southeast Asian market is full of opportunities and challenges. Chinese sellers still account for a relatively low share of the independent website market in Southeast Asia, leaving huge room for future growth. At the same time, independent website sellers have higher profit control rights than platform sellers, can avoid platform commissions, and have relatively controllable operating costs.

Nonetheless, one of the main challenges independent sellers face in this market is the maturity of online payments. The online payment system in Southeast Asia is still in its infancy, and many transactions still use the cash on delivery (COD) model. In addition, the region’s e-commerce infrastructure is relatively backward and logistics conditions are not ideal, resulting in high operating costs, further squeezing profit margins and thus affecting consumers’ willingness to repurchase.

In terms of products, consumer preferences vary greatly between countries. For example, the Vietnamese market prefers electronic products, Filipino men have strong purchasing power, and there is a strong demand for 3C electronic goods and household products, while online shopping in Thailand is mainly concentrated in the fields of electronic products, clothing and beauty. The Indonesian market has high demand for maternal and infant products and clothing. At the same time, various countries have different restrictions on the sale of products. For example, Singapore prohibits the sale of e-cigarettes. Therefore, independent sellers need to be cautious in product selection. Considering that Southeast Asian consumers usually prefer lower-priced products, this also brings considerable challenges to sellers.

When it comes to logistics choices, many sellers need to consider the current situation where the COD model is not yet mature. If consumers choose cash on delivery, sellers need to choose a logistics service provider that can provide flexible COD remittance cycles. In addition, since Southeast Asia is close to China, air, land and sea transportation are relatively fast, so it is recommended to use double-clearance and tax-guaranteed logistics channels. Sellers can also further improve logistics efficiency by building their own overseas warehouses or cooperating with local third-party overseas warehouses, such as shipping goods directly to JD.com’s overseas warehouses in South Korea, which will provide COD services. This is an effective way to avoid the loss of both funds and goods, and ensures that when customers reject goods, they can return them to overseas warehouses and put them on the shelves for sale again.

Taken together, although the Southeast Asian e-commerce market faces many challenges, it is still full of opportunities. If independent website sellers plan to take root in this market, they must be fully prepared and seize development opportunities in order to ultimately achieve success.