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The long-awaited official arrival of ecommerce giant Amazon into Singapore and Southeast Asia (SEA), initially planned for Q1 2017, has been shouted from the rooftops, but can it gain a foothold in a region where Alibaba already dominates? –reported The Drum.
After launching Prime Video in Singapore in 2016, Amazon today announced the availability of Prime Now, which aims to deliver orders to doorsteps within two hours, after officially unveiling its Prime Now facility at Mapletree Logistics Hub and announcing details of its delivery services in the country.
Alibaba meanwhile, prepared for the arrival of the Seattle-based company by buying a majority stake in Lazada, a local e-commerce service start-up last year, before purchasing Redmart, another local start-up that deals in e-grocery.
Speaking to The Drum, Ken Mandel, president of innovation and commerce, Publicis Media Asia Pacific believes that the fear of letting Alibaba become the undisputed market leader is the key to Amazon’s decision to launch in SEA now.
Mandel also added that Alibaba-Lazada is unquestionably the leading ecommerce platform in SEA and feels that Amazon has their work cut out for them.
“Amazon is in danger of letting Lazada and Alibaba run away with the market lead in SEA if they waited longer,” explained Mandel.
“Keep in mind they are not launching with their full retail offer, but have decided to only launch Prime.
“Amazon moved fairly fast in India, but are still in a head-on battle with one large local competitor (Flipkart) there. SEA has large local competitors in each market, plus Lazada across five markets, so for Amazon, it was now or never.”
iProspect Asia Pacific head of strategy Bowan Spanbroek agreed with Mandel’s assessment and noted that Amazon’s arrival not only challenges Alibaba, but also poses a danger to smaller ecommerce start-ups and platforms in SEA.
“Amazon entering Singapore will be a wake-up call for retail brands and ecommerce providers across South East Asia,” Spanbroek told The Drum.
“In bigger markets like India, Amazon disrupted what was a Flipkart market almost immediately, causing rapid consolidation.
“From a consumer perspective, Amazon’s aggressive pricing and superior consumer experience shifted loyalty away from Snapdeal and Flipkart. In a connected and mature ecommerce market like Singapore, change will happen at break-neck speed in terms of consumer adoption.”
Big Data For Humans chief executive officer Peter Ellen shared Mandel and Spanbroek's opinions and adds that Amazon will find have to find a unique local positioning if it wants to break Alibaba's stranglehold.
"I believe they will find it challenging when up against the combined Lazada and Redmart 'LiveUp' program," said Ellen.
" 'LiveUp' has incorporated aspects of all online lifestyle benefits which has a very localized flavor."
Mandel also believes that despite the late arrival of Amazon, Singaporeans will warmly welcome the company, which will result in a fierce battle between Alibaba and the American company.
“Amazon is a very well known brand and already has a base of loyal customers who order from abroad,” explained Mandel, who has worked in Asia for 22 years.
“Generally, when Amazon enters a market, they grow the entire market pie in the near term before they eventually eat the majority.
“In this case though, Singapore has become the proxy for a much bigger battle against a very competent competitor. This will be good for shoppers.”
In terms of how Amazon’s arrival will affect the advertising industry in Singapore and SEA, especially in advertising spend, both Mendel and Spanbroek are in agreement that agencies and brands need to have a solid strategy.
“Ad dollars are being eaten by commerce dollars, so unless agencies are well positioned for commerce, this might reduce ad spend in the long run,” said Mandel.
“eretailers like Alibaba and Amazon both have “media” inventory, and given the amount of time consumers spend on these platforms, they should be thought of as publisher platforms, especially as they expand their advertising inventory and targeting capabilities.
“At Publicis Media, we are very focused on partnering with these players, just as we do with Facebook and Google.”
Said Spanbroek: “If Amazon bring the sophistication of the advertising ecosystem we see in the US, product marketing dollars will quickly follow consumers into this ecosystem. Brands must prepare for this new platform, beyond just being listed.
“You need an end-to-end Amazon strategy including granular marketplace optimisation tactics. Brands who attempt this without the right approach or partner will face challenges in competing for consumer attention and loyalty.”
For Alban Villani, the general manager of Criteo for SEA, Hong Kong and Taiwan feels that it is more important for advertisers to think about how they are investing and maximising their advertising dollars.
He also added that the digital ad experience of the future will be quite different and will need to be hyper-personalised as digital advertising across mobile sites and apps, when done right, will help ecommerce players showcase new products on all connected devices and inspire sales.
Read more at thedrum.com
show source http://www.thedrum.com/news/2017/07/27/amazon-versus-alibaba-finally-happening-southeast-asia-who-will-prevail