Disrupt #9: Is it game over for e-commerce?

By Karamjit Singh July 18, 2013

Can lightly-funded local players stand and survive against well-funded competitors?
Is a deep knowledge of the nuances of the local market enough to give them an edge?

Disrupt #9: Is it game over for e-commerce? IT has gotten to the point that if you need to ask whether e-commerce has taken off in Malaysia, then you deserve the “Did you just land from another planet” look the question will get you.

Just last month Gartner Inc revealed that Asia Pacific's mobile payment transaction value is expected to grow 38% in 2013 to reach US$74 billion. No doubt the vast majority of this will be around Internet banking transactions, but the size of the market just for this year, and just in mobile, is amazing. The potential, staggering.

But we at Digital News Asia (DNA) do have a question to ask about e-commerce in Malaysia, and in the greater South-East Asian region; and that is, “Is it game over?”

That will be the topic of discussion at this month’s DNA-TeAM Disrupt panel discussion and networking session, organised with the Technopreneurs Association of Malaysia (TeAM).
Disrupt #9: Is it game over for e-commerce?
We will sit down with Masaya Ueno (pic), chief executive officer and president of Rakuten Malaysia; and Maximilian Bittner, Chief Executive Officer and Founder of Lazada, which aims to be the Amazon of South-East Asia. Our third panellist will be announced pending confirmation.

The topic was chosen for a specific reason. For while we have plenty of hobbyist e-commerce type businesses and an increasing number of brick-and-mortar firms dipping their toes gingerly into the waters, a tidal wave is coming to Asia, emanating from a well-funded European player.

Germany’s Rocket Internet has raised large amounts of money from mainly European investors to fund a coterie of e-commerce sites, throughout South-East Asia in particular.

To be sure, money will not guarantee one success in e-commerce, but it does buy you volume, better pricing that comes with that, product variety, stronger delivery which is often tied closely to customer service, and better talent to help you execute seamlessly.

In the face of this, local players like to fall back on the fact that they have a deep knowledge of the nuances of local customers and are better positioned to serve their needs.

What’s fascinating about the models of these two players is that Rakuten brings these strengths to the table, for the brick-and-mortar merchants to help them get online fast, with minimum fuss and maximum efficiency.

Rocket Internet however, brings these capabilities to bear for its own advantage as it procures items and resells them under its own online brands. Malaysians will be familiar with Lazada and Zalora.

Incidently, Bittner joined the Munich office as managing director before moving to where the action is in South-East Asia.