Cross-border B2C e-commerce in Southeast Asia: Key trends, challenges and solutions


August 8, 2021
5 MIN READ
Vinculum
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Vinculum
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A rising online trading strategy, cross-border eCommerce empowers international online trade and enhances the shopping experience for customers worldwide.

Cross-border eCommerce refers to online trading amid various groups using various marketplace platforms such as eBay and Amazon. Popular cross-border eCommerce modes include:

  • Between a business and a consumer (B2C)
  • Between two wholesalers or brands (B2B)
  • Between two private companies or individuals (C2C)

Let’s explore Cross-border B2C e-commerce and look at market trends in Southeast Asia while exploring smooth market experiences.

Accenture’s report on cross-border e-commerce reveals more than 2 billion e-shoppers who are expected to raise overall consumption by around 13.5% annually. Also, it is predicted that one out of every five e-commerce dollars shall be generated cross-border.

Cross-border e-commerce insights for South-East Asia:

Based on a detailed report by Quan Nguyen and Quan Mei Lee, here are cross-border e-commerce insights which can be the key to your success in the budding marketplace.

eCommerce Operating Environment

Due to issues like low internet connectivity in SE Asia regions like Vietnam, the Philippines, and Indonesia, e-commerce shopping itself is considered a new concept. However, Singapore, Malaysia, and Thailand have a deeply penetrated market with the best players heading towards cross-border eCommerce.

Readiness 

How prepared a location is to take up cross-border e-commerce is also essential. For instance, it’s easy to connect with technical professionals in the Philippines but challenging to find global traders and e-commerce experts.

From the perspective of financial readiness, Vietnam, Indonesia, and the Philippines continue to struggle. However, Malaysian and Singaporean MSMEs are highly motivated to fund and devote time towards cross-border e-commerce.

Customer Drive

South East Asian locations like Singapore come with high customer willingness. Whereas, Philippines and Vietnam do not trust the payment system, leading to low customer drive.

Marketplace Platforms

Most eCommerce platforms are currently working with South East locations, including Thailand, Singapore, and Vietnam. Indonesia, though it has a robust online presence, needs to accelerate e-commerce shopping to the mainstream.

Payments

The trust towards payment holds a crucial role in cross-border e-commerce. Even today, Cash on Delivery or COD is highly preferred across landscapes. In Indonesia, credit card usage is less than 15%, while 50-70% of shoppers choose COD.

However, when it comes to Singapore, credit card reliability is pretty higher.

Logistics

Cross-border e-commerce needs an efficient logistic network. Singapore, Malaysia, and Thailand, for instance, have good networks for the transportation of packages. When we look at 47% of rural population locations like Indonesia, it’s challenging to work through logistic issues, making it challenging to explore cross-border e-commerce.

Customs and Border Administration

Singapore is the only South East location with a streamlined customs and border process. The system is transparent, consistent, and reliable. When it comes to Malaysia, Vietnam, Indonesia, and Philippines, it’s a different ball game altogether; the locations have no systematic customs and border administration.

Immense improvement is needed for South East Asia to ace customs and border administration.

Foreign Market Access

Due to the above reasons, somewhere Malaysia, Vietnam, Thailand, Indonesia, and Philippines face tremendous challenges for international MSMEs to take off. Due to a lack of tariff regulations, several businesses struggle to cross-border e-commerce here.

Singapore’s government has recognized the need for lowering barriers to trading activity and keep an open mind towards the growing cross-border e-commerce.

eCommerce Regulatory Environment

Not all parts of the SEA region come with e-commerce regulations. Laws supporting such businesses are too forward to think, and countries like Indonesia, Thailand lack it. Singapore again takes the lead and has rules that address e-commerce. Malaysia is growing and needs a lot of improvement.

How do we accelerate Cross-border e-commerce in SEA Region? 

Providing consumers cross-border e-commerce shopping experiences would be a great start

Online platforms such as eBay, Amazon, Alibaba, and others can empower your SEA location to buy and sell at a global level. These brands come with simple guides and assign all.

Offering merchants with e-commerce solutions

With quick payments solutions, warehouse management solutions, marketing, and sales in the SEA region, merchants will perform better, and consumers will enjoy the shopping experience.

Summing Up…

The future looks ambitious for the central banks of Malaysia, Indonesia, and Thailand. With careful planning and strategic development of business growth, the SEA region can progressively accelerate towards a globally driven cross-border e-commerce. This, in return, will improve the economic status around the locations, developing countries like never before.

Your ticket to cross-border eCommerce lies here. Learn how to expand successfully with Vinculum.

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