8 tips for e-commerce retailers entering the South-East Asian Market

18 February, 2022

E-Commerce

Entering a new market can be very challenging for a retailer, especially when it comes to a market located in another region. South-East Asia (SEA) offers e-commerce retailers huge potential, thanks to its fast-growing digital uptake and mobile penetration across the region. Adapting your marketing strategy is one of the first key steps to help your business grow in South-East Asia. Asendia has put together 8 important tips to help you develop in the region.

8 tips for retailers entering the South-East Asian Market
  1. Adapt your marketing strategy
  2. Know your competition
  3. Optimize your logistic process
  4. Offer exchange & returns
  5. Achieving scalability
  6. Offer the right assortment and price strategically
  7. Consider foreign regulations and payment
  8. Secure dedicated local resources

1. Adapt your marketing strategy

Having a better understanding of the South-East Asia region is the first step to adapting your marketing strategy as each market of the region is unique and has its own challenges. Building a digital marketing strategy dedicated to the market is the key, and it should be driven by a deep knowledge of your target audience, a localized channel mix, and a strong website with relevant SEO.

Your marketing strategy will vary depending on if you are a marketplace seller or if you have your own website, and of course, you can have both!

Being a marketplace seller will allow you to benefit from advantages such as multi-market entries, a localized market approach, and a quicker entrance into a new market.

Selling via your own website, you will have better control of your marketing strategy by having direct and personalized customer interactions, building your own brand equity, and having more loyal customers. Facing multi-brand competitors will not be such an issue and you can benefit from higher price margins.

 

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2. Know your competition

Competition is fierce especially from unauthorized resellers called the grey channel importers who are selling at lower prices on the same platform. To overcome those unauthorized resellers, you should monitor your prices across all your distribution channels.

Another competition comes from sellers who are selling counterfeit items on platforms at a fraction of the average price.

 

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3. Optimize your logistics process

When expanding into new regions, retailers can decide if they would like to keep their inventory and fulfillment in the origin country or opt to set up individual warehouses and fulfillment centers in local markets as both scenarios have both positive and negative points:

Centralized warehousing and fulfillment:

Pros + Cons -
Keeps your warehouse and ordering costs low Often results in long transit times and limited access to the last mile operator 

Decentralized warehousing and fulfillment:

Pros + Cons -
Quick delivery times and close access to last-mile providers High capital investment, and limitation on the number of assortments they can bring into each market

 

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4. Offer exchanges and returns 

Consumer behavior tends to favor purchases with free/convenient returns or exchanges. In e-commerce, the return percentage for certain categories such as fashion can be very high up to 30%, and become a hefty component in their supply chain.

With a robust and cost-efficient return management process, you will improve the profitability of your e-commerce business and customers satisfaction.

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5. Achieving scalability 

Retailers are looking at large amounts of transactions on e-commerce and therefore having a saleable digital integration is the key with little human intervention. Automating manual processes will allow for high-velocity onboarding and growth.

 

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6. Offer the right assortment and price strategically

When entering the South-East Asia market there are three points you need to take into consideration:

  1. Every South-East Asia market has its own consumer preference and spending power
  2. A “hero” product in one market might not result in good sales in another one
  3. The marketing approach to South-East Asia consumers also diverse greatly from western consumers

Therefore, you will need to have a good marketing strategy to drive brand awareness and convert sales with the “right product at the right price at the right time”.

 

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7. Consider foreign regulations and payment

Transparency and customs procedures can vary across South-East Asian countries.

E-commerce regulations and non-tariff barriers over products are also not consistent. Furthermore, there is an additional complex of receiving payments, COD, and forex risks.

Even though this can seem overwhelming and possibly deter you from directly entering the markets, make the decision to work with authorized distributors and offline retailers to mitigate this risk.

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8. Secure dedicated local resources 

Being in a different time zone from South-East Asia will also pose a challenge to your response times. To grow and gain traction on the e-commerce platform, you will need to have local and knowledgeable resources to manage the stores, update the campaigns, and answer the buyers’ queries.

Get in touch with us today to learn more about breaking into the South-East Asian market.

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