Visual China. The Indonesian market (hereinafter referred to as Indonesia) is the first choice for Chinese enterprises to do cross-border e-commerce in Southeast Asia, and the market size is considerable. However, at the policy level, the Indonesian market is still uncertain.
In the early days, e-commerce in Southeast Asia was dominated by local enterprises. In the past two years, as Chinese enterprises have accelerated their layout in the Southeast Asian market, Southeast Asian e-commerce has risen rapidly. This also sparked some reaction from the local **. In 2023, Indonesia's ban will put a hard brake on the wild run of TikTok e-commerce, causing many Southeast Asian merchants to be confused. At present, it seems that the policy game that began in 2023 is just the beginning. Recent policy changes on the ground have sent a nervous signal.
Southeast Asian e-commerce companies have been caught in a longer period of layoffs and adjustments. E-commerce platforms can only "cross the catastrophe" while looking for new developments.
Shopee is involved in a monopoly investigationRecently, Southeast Asian cross-border e-commerce shopee has been in trouble.
Indonesia's Business Competition Supervision Commission (KPPU) questioned Shopee's monopoly of freight ** services on the platform by prioritizing the use of Shopee Express, and accused Shopee of increasing its e-commerce turnover fivefold in two years through this practice, according to overseas ** reports.
KPU member Gopprera Panggabean said that previously users could choose from other delivery providers on the platform, and that there were multiple options for the services and ** offered by each provider. However, after 2021, Shopee implemented a new policy where users could no longer choose their preferred delivery service provider.
According to digital research firm Populix, Shopee Express delivery is the third most used freight** service by consumers, with other top-ranked service providers also linked to Shopee.
Currently, the case is still in the filing stage, and the KPPU will review the sufficiency of the investigator's allegations to decide whether to proceed with the next procedure. If Shopee is found to be in violation, the company faces a minimum fine of Rs 1 billion (about $64,000), as well as a fine of 50% of net profit or 10% of gross sales during the maximum violation period.
It is not only Shopee that faces KPPU doubts, but also other e-commerce platforms that have business in Indonesia, such as Lazada and TikTok.
In September 2023, Indonesia banned e-commerce transactions on social platforms, citing the protection of small and medium-sized enterprises and user data. TikTok's TikTok Shop has been deeply affected. On February 20, Indonesia's SME Cooperative Minister Teten Masduki once again said that TikTok is still not fully compliant.
TikTok is trying to return to the Indonesian market by investing in the local e-commerce platform Tokopedia. It is understood that KPPU has also been monitoring the progress of TikTok's acquisition of a 75% stake in Tokopedia.
In the context of stronger supervision, e-commerce companies in Southeast Asia have ushered in a wave of adjustment cycle.
With the entry of TikTok Shop and Pinduoduo's overseas station Temu, the competitive environment of e-commerce in Southeast Asia is becoming increasingly fierce. In 2023, Li Xiaodong, founder and CEO of Shopee's parent company Donghai Group (SEA), once issued an internal letter saying that he was facing a strong challenge from high-dimensional world opponents, and called on all employees to prepare to enter the "all-out battle mode". The internal letter also mentions that "we are ready to start investing again." This means that we may incur losses in certain quarters. When you do, don't worry: know that this is a deliberate choice and part of a longer-term strategic plan. I am confident that we will have sufficient funds and will not need to rely on external capital. ”
Despite regulatory challenges in Indonesia, TikTok Shop remains the fastest-growing e-commerce platform in Southeast Asia. Data shows that its GMV in Southeast Asia has exceeded $13 billion in 2023, tripling from the previous year. TikTok CEO Zhou Shouzi has said that TikTok will invest billions of dollars in Southeast Asia in the next three to five years to strengthen its influence in the Southeast Asian market.
Li Xiaodong also said at the release of the financial report for the second quarter of 2023 that the company has begun to continue to increase investment in e-commerce, and models such as live broadcast e-commerce and short ** are the focus of investment.
At present, the top e-commerce platforms in Southeast Asia include Shopee, Lazada, Tokopedia, TikTok Shop, Temu, etc., all of which are backed by major Chinese manufacturers - Tencent, Alibaba, ByteDance, and Pinduoduo. According to the 2023 Global Retail E-commerce** Report released by eMarketer, Southeast Asia has become the fastest-growing region in the world in terms of e-commerce scale for three consecutive years. Southeast Asia has become a battleground for e-commerce.
Logistics services are both a force and a point of controversyUnlike the development history of domestic e-commerce, which has experienced TV shopping, e-commerce, mobile terminal to interest e-commerce, live broadcast, and short e-commerce, Southeast Asian e-commerce has directly jumped from shelf e-commerce to interest e-commerce and live broadcast delivery.
According to statista data, the total size of the ** retail market in major Southeast Asian countries will reach 87.8 billion US dollars in 2025, and the development of e-commerce is in an explosive period.
The rapid development of e-commerce has led to the rapid growth of the express delivery market. Vietnam's postal and express delivery market will achieve a double growth rate of 24% between 2022 and 2030 and is expected to reach 115 trillion in 2030, according to a joint market study. The growth momentum of the market is driven by the high demand for e-commerce freight.
shopeelazada、tiktokin Southeast AsiaThe war is raging。Logistics is one of the competitive advantages that several e-commerce platforms are building. The suspected monopoly investigation also came due to logistics issues.
Shopee has built its own cross-border logistics service system SLS (Shopee Logistics Service). For cross-border merchants, SLS includes warehousing, transportation, export declaration, import customs clearance, delivery and delivery services to the region and other related logistics services from Chinese mainland to the delivery area where the buyer is located at Shopee's seven major sites. As long as the goods are sent to the transit warehouse, Shopee can complete the work of transportation export declaration, import customs clearance, and follow-up distribution.
For local last-mile pick-up, intra-city express delivery, etc., Shopee Express is responsible for Shopee's self-operated logistics. In 2023, Shopee's localized fulfillment performance will grow rapidly, and the daily order volume will increase by as much as 280% compared with the beginning of the year. In order to provide a faster and more efficient service experience, Shopee Localized Fulfillment has launched a new model of multi-operation in three warehouses and one store, and Shopee Express VIP last-mile pickup service.
The self-operated logistics service eliminates the participation of third-party logistics companies, improves the logistics speed and reliability of Shopee platform merchants, and establishes the advantages of platform services. However, Shopee was also investigated for suspected monopoly. At present, Shopee Express's coverage has covered most of the countries in Southeast Asia.
At the beginning of its establishment, Lazada realized the importance of logistics and built its own logistics system. At present, Lazada has established at least 30 warehouses and "last mile" distribution centers and more than 3,000 pick-up points in 17 cities in 6 countries in Southeast Asia. For cross-border sellers, after the seller issues an order, the package needs to be delivered to Lazada's sorting center in China, and then Lazada's logistics department will complete the international freight and customs clearance from the sorting center to the destination country. After customs clearance, the last mile of the parcel is delivered by Lex (i.e. Lazada Exres, the logistics service provider that belongs to Lazda) or 3PL (Third Party Logistics Company).
However, for the e-commerce industry, the logistics system in Southeast Asia has always been an unspeakable pain for practitioners. Problems such as relatively backward logistics infrastructure, a large number of dependence on people, low overall logistics efficiency, high proportion of cash on delivery methods, and poor terrain hinder the effective operation of express logistics in Southeast Asia. To establish an efficient and smooth self-operated logistics system, each platform needs to invest a lot.
Jiang Zenghan, a senior researcher at Pangu Think Tank, told Titanium Technology that "in the future, the concentration of the express delivery market in Southeast Asia will become higher and higher, and the competition will become more and more fierce." The express delivery market in Southeast Asia will become more and more regional. There is practically no way to achieve economies of scale in a single national market. Therefore, the entire Southeast Asian market should be regarded as a whole. Only a large overall market can promote the long-term sustainable development of Southeast Asia. ”
At present, the e-commerce market pattern in Southeast Asia is still the two giants of Shopee and Lazada, and Tik Tok is developing rapidly. In addition, there are many players such as Bukalapak, Tiki, Amazon, and Sendo who are close behind.
In 2023, most e-commerce companies have made major business adjustments. Shopee laid off about 500 employees in Indonesia; Tokopedia laid off about 600 employees, and its parent company, Goto, said the realignment included the integration of certain businesses and teams across the ecosystem to create a leaner organization that better responds to market demands; Lazada underwent a major restructuring of its organizational operations and laid off employees to streamline its structure.
At present, it seems that the changing cross-border policies of local countries in Southeast Asia are becoming a sword of Damoris hanging over the heads of various e-commerce platforms. How to communicate more effectively with the ** level is a compulsory course for many players now and in the future.
As more and more new cross-border e-commerce enters the market, the challenges faced by platforms in Southeast Asia are becoming increasingly competitive, coupled with headwinds such as slowing economic growth and inflation in Southeast Asia. Whoever can succeed in "crossing the catastrophe" may be one step ahead.
This article was first published by Titanium**app, author|Yang Xiujuan, editor|Fang Yu).