This comes as the chief executive announced the tech giant’s long-term plan to quintuple GMV to US$100 billion across their Lazada e-Commerce platforms.

Complementing this ambition for industry growth and dominance, Alibaba is pledging to achieve carbon neutrality across its operations by 2030, the group said in a statement.

In their Alibaba Group Carbon Neutrality Report 2021, the organization has introduced a “Scope 3+” target, claiming it is a pioneering initiative aimed at facilitating 1.5 gigatons of decarbonization by 2035. 

“We aspire to be a force for positive, innovative change in society. Our ESG strategy is predicated on our mission to be a good company that will live for 102 years and it is a vital foundation for Alibaba’s future development,” said Daniel Zhang, Chairman, and CEO of Alibaba Group. 

On Alibaba’s Scope 3+ and carbon neutrality 

Developed by the United States Environmental Protection Agency (US EPA), the Scope inventories are a set of tools and guidelines for organizations to develop action plans to lower carbon emissions. 

The inventories provide tools and practices to deal with different sources of emissions, which are categorized under Scope 1, 2, or 3.  

According to Alibaba, “Scope 3+,” refers to the emissions generated by a broader range of participants in the platform’s ecosystem, currently outside of Scopes 1, 2, and 3.  

Definition of Corporate GHG Emissions Scopes 1, 2, and 3, adapted from Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard. (IMG/Alibaba Group)

Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization, whereas Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.

Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but where the organization indirectly impacts its value chain.

Alibaba Group’s green roadmap 

The group is committed to carbon neutrality for Scope 1 and 2 emissions by 2030 and has set a 50% carbon intensity reduction target for Scope 3 by 2030 using 2020 levels as a baseline. 

Alibaba Cloud will bear responsibility for a higher Scope 3 target and aims to achieve carbon neutrality by 2030 in all three scopes.

Greenhouse Gas emissions by Alibaba in 2020 (IMG/Alibaba Group)

Alibaba Group has also committed to joining the Science Based Targets initiative (SBTi) and has aligned its decarbonization measures and strategy with the “Business Ambition for 1.5°C” pledge, a critical target to ameliorate the catastrophic impacts of climate change as outlined by the 2015 Paris Agreement.

The company will adopt a “systematic and science-based approach” to plan and manage decarbonization initiatives. 

These include leveraging energy-saving and efficiency-improving technologies to reduce emissions; actively transforming the energy structure with progressive use of renewables; and exploration of carbon removal initiatives. 

“We believe the use of digital platforms can play a significant role in empowering a low carbon circular economic model that can lead to achieving the 1.5-degree target of the Paris Agreement.

“The concept of ‘Scope 3+’ is based on the potential of leveraging our digital platforms to influence and advocate for low carbon products, services, and behavior among a wider group of stakeholders in our ecosystem. 

Highlights of Alibaba’s Decarbonization efforts (IMG/Alibaba Group)

“This is in addition to sharing our energy-efficient technologies and innovative business tools with customers and business partners to reduce the carbon footprint together,” said Dr. Chen Long, Vice President of Alibaba Group and Chair of Alibaba’s Sustainability Steering Committee.

As a general principle, the company prioritizes carbon reduction over removal, and removal over offset.

Alibaba will continue to improve its carbon reduction measurement and metrics in Scope 3+ by working and partnering with leading expert organizations globally. 

Dedicated ESG Governance Body

The group also announced a new three-tier ESG governance framework to oversee, enable and support the achievement of its carbon neutrality targets and broader ESG goals. 

Chaired by independent director Jerry Yang, the board-level Sustainability Steering Committee will be responsible for strategic planning, goal setting, and management of Alibaba’s carbon neutrality efforts. 

An ESG cross-business action group comprising representatives from each business unit at the working level will be responsible for coordination and execution.

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Meanwhile, Alibaba aims to continue to improve its information and data disclosure and reporting mechanism. 

Starting 2022, the firm “aims to release its ESG report annually”, in which concrete and specific annual progress will be included. 

All reports will adhere to the most reputable metrics laid out in domestic and international standards and will be verified by accredited auditors, said the statement.

Alibaba fintech arm pledged carbon neutrality too

In March this year, Ant Group, the fintech affiliate of Alibaba Group first detailed a roadmap to achieve carbon neutrality by 2030.

The fintech giant aims to neutralize direct and indirect emissions associated with the purchase of electricity from this year and seeks to fully cancel out carbon emissions generated from external sources it does not own or control by 2030. 

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This includes emissions within its supply chain and business travel. It also set up a carbon neutrality fund to support the research and development of renewable energy and other green technologies, as well as work with industry partners to promote green finance. 

The Asia-Pacific, comprising 60% of the world’s population, consumes half the world’s power supply. China is Asia’s leader in the production, procurement, and utilization of sustainable and renewable energy. 

However, nearly 60% of the Chinese economy is powered by coal, which has spurred President Xi to pledge carbon neutrality by 2060.

The post Alibaba Group pledges carbon neutrality by 2030 appeared first on Tech Wire Asia.

Shopee Indonesia has officially entered the ride-hailing business. According to reports the e-commerce giant has partnered with Indonesian taxicab company, Bluebird Group. The partnership enables users to hail taxi rides straight from the Shopee App.

Shopee Indonesia’s move to ride-hailing signifies the growing competition faced by e-Commerce giants in the country as well as the endless possibilities in store for them. Indonesia’s largest ride-hailing company, Gojek merge with Tokopedia, the country’s largest e-Commerce provider several months earlier as well.

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The new feature is called Taksi. Available in some areas in Indonesia, users can not only make bookings for their rides via the Shopee app but also make payments using Shopee Pay. In August this year, Shopee had also established a partnership with Blue Bird to form a logistics service called BirdKirim, enabling users to use Blue Bird drivers for courier deliveries.

The ride-hailing market in Indonesia is forecasted to be worth US$5.6 billion by 2025. It is currently dominated by two companies, Gojek and Grab. While Grab is not a top e-Commerce player in Indonesia, it is the biggest ride-hailing company in the region. Grab’s a super app already offers multiple services apart from ride-hailing. They include food delivery, wallet services, and others.

With ride-hailing being a critical component of a super app, Shopee is definitely heading in the right direction to be a super app in Indonesia. Apart from e-Commerce services like online shopping, their app also offers food delivery, hotel reservations and even has its own wallet.

 A new horizon for Shopee Indonesia?

As such, Shopee Indonesia may not be the biggest e-commerce player in the country, but they are definitely becoming a force to reckon with. In fact, as e-Commerce continues to grow rapidly around Indonesia the competition is also increasing among the providers.

Currently, the biggest e-Commerce provider in Indonesia is Tokopedia. Statistics showed that Tokopedia has an average of 150 million visits per month on its e-Commerce website. Following closely for second place are both Shopee and Bukalapak, with around 100 million visitors per month.

According to e-Conomy SEA report by Google, Bain, and Temasek, Indonesia’s e-Commerce value is expected to reach US$ 83 billion by 2025. In fact, the report also stated that e-Commerce for the entire ASEAN region could reach US$ 1 Trillion by 2030, with Indonesia remaining the largest e-Commerce market.

With that said, it is not surprising that some of the e-Commerce companies are venturing out beyond e-Commerce into other verticals as well. For example, following Tokopedia merger with Gojek, the new company, GoTo recently announced appointed underwriters to manage its US$1bn initial public offerings (IPO), which could take place as early as the first quarter of 2022.

For Shopee Indonesia, the competition in the country also meant they would need to branch out to other verticals as well. SEA Limited, the parent company of Shopee, is already making huge investments in their brands in Europe and Latin America. There were also rumors of the company planning to start offering services in India, but there has been no official announcement on that yet.

The post Shopee Indonesia ventures into taxi-hailing services appeared first on Tech Wire Asia.

Alibaba, one of the world’s largest e-commerce companies, have lately been doing all it takes to navigate a new regulatory environment amid Beijing’s crackdown on the country’s tech sector. It started with a recent biggest reshuffle and now the company is looking at accelerating its overseas expansion, targeting a long-term goal of quintupling gross merchandise value (GMV).

During the Alibaba Investor Day conference call last week, the company’s CEO Zhang Yong shared that the e-commerce giant is targeting a long-term goal of quintupling GMV, the sum of transactions across Lazada’s platforms, to US$100 billion. Alibaba is eyeing for Lazada to serve more than 300 million users eventually, according to a slideshow posted on its website.

Zhang also said that the company’s three strategies including domestic demand, globalization and advanced technology have progressed. To recall, based on the earnings report released by the company on November 18, Alibaba’s global business volume grew 41%, with extensive coverage in approximately 200 countries and regions around the world. 

To recall, Alibaba took over Singapore-based Lazada in 2016 and have ever since been the Chinese corporation’s main e-commerce business in the booming Southeast Asian market. Based on a Bloomberg report, Lazada has grown its GMV to about US$21 billion over the past 12 months, after enlarging its active consumer base by 1.8 times to 130 million from March 2020 through September this year.

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Lazada’s Zhang is optimistic and sees a “huge potential in the international markets” going forwards. “In Southeast Asia, ecommerce penetration is only 11%, and Lazada’s annual consumers have reached only 34% of regional Internet users. There’s tremendous potential in both the overall market size and our penetration,” he added.

Lazada, however, has been losing out to Sea Ltd. ‘s Shopee, which also operates in Southeast Asia and Taiwan over the last few years. For context, Shopee reported more than US$56 billion of transactions over the four quarters to the end of September. 

Alibaba’s incoming chief financial officer Toby Xu said during the presentation last week that its China commerce segment has faced “near-term challenges of a slowing macro-environment and a heightened level of competition.” That, he said, has resulted in slower GMV and the revenue growth in the most recent quarter, Xu said. “But we also see opportunities to tap into new addressable markets to grow new users that will position us well for the long term.”

The post Alibaba targets US$100 billion SEA e-commerce business appeared first on Tech Wire Asia.

In fact, just Southeast Asia alone is predicted to reach a US$1 trillion digital economy by 2030, according to Google, Temasek, and Bain.

It might even overtake the West’s digital economy, and this is quickly showing potential with just how cross-border trade is flourishing in the region.  

According to a new report by Deloitte published yesterday, the ‘Technology-empowered Digital Trade in Asia Pacific’, the firm predicts that digital trade will further accelerate, and leapfrog the region into the golden age of digital trade in the next three years.

The report accounts for this dramatic shift through increased dynamic cross-border e-Commerce activities, strengthened regional cooperation through the RCEP, increased digitalized lifestyles, and ongoing development of digital infrastructures.

According to Taylor Lam, Vice-Chair and Technology, Media & Telecommunications Industry Leader at Deloitte China, the combination of the Covid-19 pandemic together with these other factors will see new development opportunities in digital trade.

“Digital technologies enable global sellers to participate in global trade without any entry barriers,” said Gary Wu, Deloitte Global Lead Client Service Partner.” 

Wu also added that the continuous improvement of digital infrastructure will effectively resolve the two major constraints affecting cross-border trade: logistics and payments, with blockchain technology also “creating a new space of imagination for digital trade.”

Digitalization, mMNEs will drive cross border trade

The report highlighted some key insights for the Asia Pacific, with the first revolving around key technologies and the important role they play. 

According to Deloitte, data factors will feature prominently alongside how other critical infrastructure such as 5G, which will help build data distribution platforms and new network architectures and facilitate the Internet of Everything (IoE). Unsurprisingly, AI will continue working alongside big data to bring deeper insights for better decision making. 

Secondly, the report identified and analyzed various APAC markets for the development and maturity of digital trade across two dimensions: cross-border e-Commerce (60%) and digitalization (40%).

Deloitte classifies the markets as follows: 

• Mature markets: China, South Korea, Singapore, and Japan;
• Developing markets: Thailand, Malaysia, Indonesia, Vietnam, and the Philippines;
• Early-stage markets: Myanmar, Cambodia, Laos, and Brunei.

Comparison of the three market types in terms of development (IMG/Deloitte)

Thirdly, there is a substantial rise of micro-multinational enterprises (mMNEs) in the region, which has been identified as the main driver of the transformation of digital trade across the Asia Pacific.

With the help of digital platforms, entrepreneurs and small businesses have become mMNEs as they are engaged in cross-border e-commerce across global markets.

mMNEs provide diversified “locally-made products” and light customization services for global buyers while contributing to over 85% of Asia Pacific’s cross-border e-commerce activities.

Here are the main characteristics of an mMNE:

• More adept at leveraging digital platforms
• Small in scale, typically with fewer than 100 employees
• Globalized operations with an average of 3.56 overseas outlets

Regional cross border business opportunities 

Invariably, the degree of digitalization differs across markets, depending on their maturity stage. As digitalization is a yardstick by which market maturity can be measured, it is crucial to track the development of digitalization across developing and early-stage markets.

Matured markets generally fared better in terms of sales, payments, and logistics, whereas developing markets tended to lead in production and trading. 

Understandably, early-stage markets are still in their nascent stages of digitalization across all facets of cross-border e-Commerce. 

Vietnam, as expected, leads digitalization in terms of production, whereas Indonesia leads in trading. Singapore, a mature market, leads in digital payments as well as logistics digitalization. 

However, this isn’t always linear. 

Degree of digitalization in cross border e-Commerce verticals (IMG/Deloitte)

Interestingly, the report found that Malaysia, classified as a developing market, leads the APAC region in e-Commerce market size at US$6.3 billion. This is a whopping 61.4% of the total e-Commerce market size in China. 

The Southeast Asian nation of 32 million also has the highest penetration rate for sales digitalization for cross-border e-Commerce, at 65.7%. However, Malaysia suffers from bottlenecks such as logistics and production (20.2%). 

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At present, cross-border consumption only accounts for 42% of the market size of the internet economy in Malaysia, which is much lower than mature markets.

Although Indonesia leads digitalization in trading, they are still lagging far behind in production, sales, payments, and logistics. Indonesia has been pointed out by experts to lead the Southeast Asian region in terms of the digital economy. 

Vietnam seems to be steadily rising and doing decently in digitalization across most other facets of e-Commerce, whilst also leading digitalization in production. 

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For these developing markets to move towards maturity, these areas, especially logistics, would need to see more work in terms of development and sophistication.

But at the same time, this presents huge opportunities for private players to come in and develop these industries in these countries.

The state of e-Commerce: Opportunities and analyses

Deloitte expects that the e-Commerce consumer market in APAC will continue increasing in line with continuous digitalization penetration. Here are other key takeaways:

• Singapore: Within Asia Pacific, Singapore continues to act as a central hub for many cross-border e-commerce platforms in Southeast Asia, with companies such as Shopee, Lazada, Amazon, and Zalora setting up their headquarters there. The e-commerce market in Singapore is predicted to double in size in 2025 compared with 2020, with gross merchandise volume (GMV) amounting to US$8 billion.
• Indonesia: Demographic dividend, internet penetration rate, and consumer habits create great potential for developing e-commerce and cross-border e-commerce in Indonesia. Social e-commerce is thriving, and consumers are fond of trading on social media. Indonesian consumers like buying in-expensive products, and the average transaction is low at US$36, much lower than Malaysia (US$54) and Singapore (US$91). Users also prefer e-commerce platforms in their local language, which greatly affects their shopping experience.
• The Philippines: E-commerce has huge growth potential but is constrained by a low internet penetration rate and an undeveloped e-payment industry – the penetration rate of e-commerce users only accounts for 39% of the total population.
• Thailand: The penetration rate of cross-border e-commerce in Thailand is relatively high and has a certain digitalization foundation, but their degree of development is limited. However, quality improvements of internet infrastructure will raise the efficiency of information exchanges and unleash the vitality of e-commerce platforms.
• Vietnam: Although high logistics costs are almost the biggest challenge in cross-border e-commerce in the APAC, 61.8% of the surveyed enterprises in Vietnam believe that the largest challenge is the difficulty in customs clearance inspections, with more than 60% of businesses focusing on green development goals.
• Brunei: Brunei takes the lead in internet penetration rate in Asia even though early-stage markets have a relatively low overall level of digitalization, and generally have no sophisticated infrastructure and platforms in place to develop the digital industry.

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Earlier this month, e-Commerce companies in Southeast Asia made huge profits from the shopping festivals in the region. While many would say the e-Commerce companies have been successful due to the pandemic, the reality is, consumers in the region are preferring online shopping and the opportunities are only increasing.

In fact, Google’s SEA e-conomy report in 2021 stated that 8 out of 10 of SEA’s internet users are digital consumers. The report also indicates that 90% of Thai, 81% of Malaysian, and 71% of Vietnamese internet users have had an experience of shopping online. As online shopping becomes the norm, the market itself is predicted to reach between US$ 700 billion and US$ 1 trillion by 2030.

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For e-Commerce companies, the market is still growing and the opportunities are aplenty. The only problem now is, how can be they be the top e-commerce platform in the region. Compared to other parts of the world, the ASEAN region is unique due to its diversity. While some e-Commerce companies have been successful in some countries, they tend to often play catch up in a neighboring country.

As such, e-commerce aggregator iPrice Group analyzed the performance of the top e-commerce companies in Thailand, Malaysia, Singapore, Indonesia, the Philippines, and Vietnam to determine which e-commerce sites are holding the most of the market share, and which of them have been successful in drawing social engagement.

Interestingly, Shopee and Lazada are still dominant in most markets across the region. In Malaysia, Shopee holds 71% of the region’s overall e-commerce web traffic, followed by Lazada with 18%, and PGMall with 9%. Shopee Malaysia recently launched its Shopee food feature, which flooded both new and existing users with food vouchers and free deliveries. Meanwhile, Lazada Malaysia added a Chinese language option to cater to a wider market.

Homegrown e-Commerce companies making a mark

An interesting trend seen in some ASEAN countries is that local sites rank in the top three. PGMall (Malaysia), Central Online (Thailand), and Tiki (Vietnam) have done quite well in establishing themselves in their respective markets. These three rising e-commerce sites have carefully executed strategies to earn their top spot.  The cross-country collaboration between PGMall and JD Worldwide, for instance, has encouraged local sellers to offer unique local brands to the Chinese market. With access to China’s extensive market, PGMall’s platform has become one of the most prominent domestic online businesses in Malaysia.

Meanwhile, Tiki, which holds 13% of Vietnam’s e-commerce market share. They signed an exclusive partnership with insurance company AIA Vietnam for 10 years. Due to this, policyholders may manage their insurance accounts and seek health insurance solutions and claims through the Tiki website. This resulted in garnering the platform’s well-deserved web traffic.

Central Online, on the other hand, has allowed its thousands of mall tenants to sell their products through its digital platform during the pandemic. This decision amounted to the diversification of online merchandise and average web traffic of nearly 2.6 million.

In Indonesia, which is the largest e-Commerce market in the region, Tokopedia is top of the list followed by Shopee and Bukalapak. This is probably due to both Tokopedia and Bukalapak being preferred among the local consumers for their e-Commerce activities.

 At the same time, social media is becoming an important tool in e-Commerce as well. iPrice reported that based on Facebook reactions, Malaysians engage the most with posts related to the top e-commerce sites on social media, which accounts for 44% of the total social engagements recorded. Vietnamese users account for 36% of the engagements while Thai users account for 20%.

With the industry expecting to see more sales in the future, the competition among e-Commerce companies is increasing as well. Most platforms are already providing new features like shoppertainment to keep shoppers hooked on their sites. Some have also reduced shipping fees or even provided more free shipping vouchers to consumers.

The reality is though, the merchants are the ones who are also benefiting from the increased sales. While the pandemic may have forced them to move their business digitally, these e-Commerce platforms have enabled them to reach out to more customers around their region, allowing them to not only increase sales but also branch out for more opportunities.

The post Mapping e-Commerce companies in Southeast Asia appeared first on Tech Wire Asia.

As the fourth most populated country in the world, BNPL (buy now pay later) in Indonesia is an increasingly popular payment method among the consumers there. The millennial and Gen Z consumers in particular are thrilled with the flexible financing options for impulse or unexpected purchases.

In fact, reports show that BNPL payment in Indonesia is expected to grow by 72.8% on annual basis to reach US$ 1537.0 million in 2021. The low credit penetration in Indonesia has provided a substantial boost to the growth of the BNPL industry in the country. With 98% of the population now owning credit cards, the demand for the payment method has soared tremendously in recent times, with more BNPL companies venturing into the country.

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As one of Indonesia’s fastest-growing BNPL payment methods, Kredivo has more than 4 million users, representing over 50% of the local BNPL market. Consumers who use the payment method are largely made up of Indonesia’s middle class. Kredivo recently announced an integration with local payments infrastructure provider, PPRO.

The integration enables merchants to reach a large pool of underbanked or unbanked Indonesians.  It gives consumers access to flexible instant credit that enables them to make purchases for essential or bigger ticket items.

For Krishnadas, Vice President of Business Development at Kredivo, the integration with PPRO allows more merchants to offer their customers the option to pay with Kredivo. Through them, Kredivo can strengthen its commitment to allowing Indonesian consumers to access more of the world’s e-commerce market.

The integration is a cooperation between PPRO, Kredivo, and DOKU, a leading payment technology company. The news follows the recent announcement of the integration of two of the most popular payment methods in Indonesia, Jenius Pay and LinkAja, into the PPRO platform. Other payment methods on PPRO’s wider global network include Alipay, WeChat Pay, GrabPay, Bancontact, iDEAL, BLIK, and Boleto Bancário. As part of its ongoing growth strategy, this year also saw PPRO announce that it had raised US$180 million, taking the firm’s total value to over US$1 billion.

“Indonesia continues to be recognized as the world’s hottest battleground for digital payments. The addition of Kredivo to our platform is a milestone in our Indonesia expansion, with the BNPL being the first such player to be integrated into PPRO’s infrastructure. Kredivo now sits alongside other key Indonesian payment players on the platform that enable merchants to better cater to the demands of consumers in one of the world’s fastest-growing markets,” said Kelvin Phua, Head of Global Market Development at PPRO.

Indonesia currently has about 10 BNPL players. Apart from Kredivo, the other major BNPL players in the country include Atome, Akulaku, Splitit, Shopee, Home Credit, GoJek Paylater, Indodana PayLater, AfterPay, and GoPayLater. While the BNPL market has seen increased transactions, there are still concerns about the after-effects of BNPL.

As BNPL offers short-term repayment schemes without any background credit check, critics of the payment method feel that it will only lead to more users falling into the debt trap. Although BNPL does not charge high interest and only offers a minimal late payment fee (depending on the company), the worry is that many consumers will just spend their funds without thinking about the effects in the long run.

There is no denying that BNPL will enable consumers to own more products easily and affordably. But the only worry is, can consumers truly afford and need these products in the first place. Either way, the Indonesian BNPL market is definitely seeing a growing trend among consumers, with no signs of slowing down.

The post BNPL giant Kredivo making it big in Indonesia appeared first on Tech Wire Asia.

According to a statement by Amazon, over 52,000 new products are being launched by Indian exporters on Amazon websites, The Economic Times reported. Amazon has been helping Indian businesses with exports through its Amazon Global Selling program.

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“The BFCM sale marks the beginning of the global holiday season. Coming right after the festive season in India, it has traditionally been a key growth period for our selling partners and with more and more people relying on e-Commerce for products globally, we believe that the 2021 BFCM sales period will accelerate the export business for our sellers,” said Abhijit Kamra, Director of Global Trade, Amazon India.

While the BFCM sales period is expected to bring in big numbers, Amazon has also found itself in trouble with Indian law enforcement. AFP reported that Indian police have charged executives from Amazon’s local arm over claims the US retail behemoth’s online portal was used to smuggle and sell marijuana.

Two men were arrested last week with 21 kilograms (46 pounds) of the drug in central Madhya Pradesh state and told officers they were using Amazon’s India platform to ship their goods elsewhere in the country. They admitted to shipping their crop by falsely marketing it as stevia leaves, a natural sweetener, according to a police report seen by AFP on Sunday.

Executives from Amazon’s India unit had been included in the charges because of contradictions between evidence collected in the police investigation and responses received by the firm, the report said.

Neither police nor Amazon gave any indication of how many employees were facing charges. Amazon said it was investigating the case and pledged full cooperation with police in a Sunday statement to AFP.

“We do not allow the listing and sale of products which are prohibited under law to be sold in India,” a company spokesperson said.

The drugs case is the latest legal headache for the online marketplace’s Indian arm, which is also facing an antitrust probe along with Walmart subsidiary Flipkart. Both firms are being investigated by competition watchdogs over claims they gave preferential treatment to some sellers.

An opportunity for other e-Commerce players in India?

While the Amazon executives are being investigated in India, this might be an opportunity for smaller e-Commerce players in India to make a mark as well. The Indian e-Commerce industry is a rather unique one, divided between local and international brands.

Local e-Commerce players like Flipkart, SnapDeal have been competing with Amazon, which launched their business in India several years ago. In fact, Amazon’s business with local partners in India is worth about US$6.5 billion.

The Indian Brand Equity Foundation predicts the Indian e-Commerce market to grow to US$ 111.40 billion by 2025. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. Out of the total internet connections, about 61% of connections were in urban areas, of which 97% connections were wireless.

E-Commerce giant Shopee has also announced interest in the Indian market. Reports showed the company had begun recruiting sales employees several weeks ago but no official announcement has been made by the company yet.

At the same time, e-Commerce customers in India are also demanding better services, with a majority of them preferring services that offer them flexible payment methods and such. For example, Snapdeal started using “Online Dispute Resolution” to solve customer issues by making resolutions tech-enabled, easy, and fast.

Going back to Amazon, the probe on the company’s India unit marks the concerns that come with e-Commerce as well. As the investigations continue, the reality is, e-Commerce will not slow down, especially with BFCM just around the corner. For e-Commerce players in India, one company’s problem might just be an advantage for them.

With additional reporting from © Agence France-Presse

The post Will Amazon’s probe affect India’s e-Commerce industry? appeared first on Tech Wire Asia.

According to statistics from Shopee, the visits on their platform spiked 5.5 times in the first two hours compared to an average day. This time, there were more shoppers from outside major cities, with a five-time increase recorded among rural and small-town shoppers. Sales for some merchants soared 18 times compared to an average day.

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More than 3.5 billion messages were also sent on the in-app Shopee Chat across the sales period. The chat function enabled shoppers to have live chats with sellers, allowing them to get more information about products before making any purchases. Live streaming continued to be a core part of the online shopping experience with over 300,000 hours of live streams watched on Shopee Live, as users connected with sellers.

For Junjie Zhou, Chief Commercial Officer at Shopee, “the digital economy continues to present many growth opportunities, and we want to enable more people to benefit from this growth by increasing e-commerce adoption and helping more consumers and businesses come online.” 

As e-Commerce platforms enable greater convenience for shoppers, one of the most important features for any platform is payment security. While Shopee and most e-Commerce platforms offer secure payment gateway services, the third-party payment provider may at times be not able to deal with the heavy traffic during the sales period.

Realizing this, some e-Commerce platforms have launched their own payment platforms. For Shopee, they offer their customers ShopeePay, a secure and seamless mobile wallet. The wallet enables shoppers to make seamless purchases, especially for those in rural areas.

ShopeePay was the preferred payment platform for rural shoppers during the sales period with transactions growing nine times more from an average day. As the payment wallet offered extra deals for shoppers, over 2.5 million offline payment vouchers were claimed. Examples of payment vouchers include coupons for meals that shoppers purchase online and redeem at selected restaurants. The vouchers are offered to shoppers based on their location, ensuring everyone is able to get a piece of the pie.

(Source – Shopee)

What do these numbers mean for e-Commerce?

The record-high sales by Shopee only increase the app’s dominance in the region. While Alibaba’s Lazada also recorded good sales during the shopping festival, the platform was still unable to match the success of Shopee.

Shopee continues to grow its influence not only in the region but around the world as well. The e-Commerce platform has already launched services in the Americas and Europe and is now planning to offer services in India as well. While it is uncertain when exactly the company plans to begin operating in the subcontinent, the prospects are looking good for them, especially with some rivals facing issues there.

With shoppertainment gaining traction in e-Commerce, Shopee has also ventured into the food delivery industry. ShopeeFood is available in selected areas in the region and is becoming increasingly popular among consumers, especially with the sales vouchers offered to consumers. The app is slowly matching the competition set by established food delivery apps like Food Panda and Grab Food.

More interestingly, the e-Conomy report by Google, Temasek, and Bain & Co showed that e-Commerce, online media, and food delivery are poised to grow to over US$300 billion by 2025. The numbers are a clear indication that the pandemic has not derailed e-Commerce businesses, even as most countries begin to recover slowly. And Shopee is ticking the right boxes with its services as well as the report pointed out that aside from Vietnam and Thailand, the majority of new consumers are from non-metro areas.

In fact, over a third of last year’s online commerce was generated by new shoppers, of which 8 in 10 intend to continue buying online going forward. The purchase frequency has also increased, though the shift towards essential goods has shrunk average basket sizes. There is no denying that many SMEs moved online as e-Commerce became the only available retail channel. But it’s only good news for them as consumers who have now tried online shopping indicate they’ll continue post-COVID-19.

The reality is, as long e-Commerce platforms offer a secure environment for consumers, offer good deals, and keep communicating with consumers in real-time, the possibilities are endless. E-commerce may have been around for some time, but for Shopee, the sales potential and opportunities achievable are still growing.

The post Shopee breaks sales record, over two billion items sold appeared first on Tech Wire Asia.

E-CommerceDigital retail today is an omnichannel experience that allows consumers to easily maneuver and engage with a business’s platform. This, in turn, provides the information and education to facilitate purchasing decisions. 

In the second part of an interview with Andrew Martin, head of AI & data company Databricks, Tech Wire Asia sought to understand more about the challenges digital retailers face, and how SMEs can address them with data and AI. 

What are the challenges that digital retailers commonly face? 

While expectations surrounding the customer experience have certainly risen to new heights, few retailers have invested in the right technology for meeting these new standards. 

From our research, we’ve identified four customer challenges SEA retailers face. They include fraud, delivery theft, returns, and customer service. 

These aren’t only common, but significantly impact their bottom lines. 

So how can data and AI address these four challenges?

Fraud

Fraud has become too commonplace — SEA stands to lose US$260 million annually to online fraud, with Indonesia, Thailand and Vietnam expected to be the most heavily affected.

Losses associated with fraud soared to US$56 billion in 2020 globally and accompanied a huge dip in customer confidence in the brand. 

Data and AI can help retailers get ahead of fraud and avoid financial and reputational damages, especially when it comes to proactive approaches. 

A modern data architecture that brings data together from geospatial data to sales trends, across the business can effectively enable anomaly detection at a massive scale to protect losses caused by fraud in real-time with machine learning.

Delivery Theft

Logistics costs are high in most SEA nations due to geographical challenges, the imbalanced concentration of economic activities, and poor connectivity between various parts of the countries. 

The lack of adequate shipping infrastructures will make it difficult to deliver parcels within the promised delivery timeframe. This increases the risk of package theft, which is a significant operational burden on retailers, with global estimates of over a million packages being stolen or lost daily. 

Data and analytics can help logistics providers identify common sites of traffic accidents or package thefts and design their services around those. 

The global shipping industry is also using AI to enhance security measures, both within and outside of business grounds, with shipping carriers using drones to patrol the grounds around their warehouses to collect real-time information and data. Data and AI allow retailers to easily identify such hotspots and frame apt responses.

Returns

Without the tactile experience of brick-and-mortar shops, consumers are returning their online purchases at an alarming rate. According to industry data, at least 30 percent of all products ordered online are returned compared to only roughly 9 percent bought in bricks-and-mortar shops. 

The ability to uncover trends in that data with the power of machine learning allows retailers to better understand customer behaviors, spot high-return items and take action with data to minimize returns. 

To any e-commerce retailer, returned products mean additional shipping costs, which can constitute a significant portion of any retailer’s operating margin. Retailers can also incorporate predictive analytics using data and AI in their returns and reverse-logistics operations, to improve service levels with fewer queries and reported issues.

Customer Service

Customer satisfaction, customer retention, and cost to serve are three factors that can define the long-term profitability for retailers. Although customer issues can be wide-ranging, many issues will be common to reoccur amongst customers. 

For example, Natural Language Processing (NLP) tools can be used to quickly analyze service call notes and easily identify the straightforward and most common issues. These can be tackled by blending digital and call center channels and driving self-service usage for common queries. 

Finally, businesses can arm their customer care teams with visual data snapshots of helpful customer insights – an at-a-glance view of the context, key data points in their history, and next-best-step suggestions while the customer is on the call. This is especially useful while dealing with an at-risk customer identified by machine learning (ML) models who have been routed to the retention specialist.

Are there other challenges that SEA retail SMEs face today? 

Across SEA, countries are still battling uneven vaccination rates and are still dealing with outbreaks and lockdowns. While regional online retail has skyrocketed, SEA economies continue to rank poorly in being able to prepare and adapt to the pandemic’s changing conditions. 

When looking at the retail industry holistically, one needs to be mindful that logistics, supply chain and last-mile delivery are also as critical as the products and services sold and the user experiences provided. With SEA’s retail and consumer goods markets in flux, accurate forecasting that considers variations in day-to-day product demand and distribution will be essential.

Accounting for these shifting market conditions is often well beyond the capabilities of legacy, data warehousing-based tools. The retail industry and related organizations working with ever-growing, day-to-day digital data will need a centralized hub — a logistical control tower of sorts — to orchestrate the technology, tools, and processes used to capture data across all stages of the supply chain. 

The demand for more granular, timely forecasting, can be met with solutions that employ data insights derived from machine learning. These can power the retail industry to generate forecasts that move away from traditional linear models and historical-based algorithms, towards flexible inventory planning that can be precisely adjusted on an individual day and store level.

The post AI can solve your online retail woes appeared first on Tech Wire Asia.

In Asia, the final quarter of the year is often filled with shopping festivals. Despite the pandemic disrupting retail sales in shopping malls, e-Commerce sales continue to see tremendous success due to the change in consumer behaviors.

Yearend shopping festivals like 11.11, Singles Day, Black Friday, Christmas, Boxing Day, and such not only bring more sales but also increase the risks of cybercrime among some businesses. While e-Commerce platforms have been benefiting from these, SMEs account for 96% of all businesses in Asia and need to future proof their digitized businesses.

In fact, the Cyber Security Agency of Singapore reported that ransomware cases spiked by 154% in Singapore alone last year, affecting mostly SMEs in sectors like retail and healthcare. Another report flagged that Asia’s users are 1.7 times more likely to encounter ransomware than in the rest of the world.

At the same time, consumer preference in payment methods and the user experience in platforms from start to checkout has also evolved. Customers want a seamless experience when shopping online and SMEs need to do their best in delivering that.

To understand more about how SMEs can not only secure their business but also their customers as well deliver what customers really want, Tech Wire Asia spoke to Jim Magats, Senior Vice President for Omni Payments at PayPal to get his insights on the industry.

There is a myriad of tech companies offering a variety of solutions for SMEs to build a sustainable digital e-Commerce business. How do SMEs make the right choice, especially when it comes to securing payments?

One of the biggest decisions to make when setting up an online business is selecting the right platform to build and manage your website and online store. To start, look for an open and interoperable e-Commerce platform that fits your particular business and enables you to easily connect with other platforms you may need to help with everything from payments to shipping to inventory and order management. As we move toward a multichannel or omnichannel world, it’s also critical to make sure you work with a partner that can help connect your in-person and online stores from a backend perspective, so things like cataloging, payments, and inventory and order management are seamlessly integrated so your customers have a consistent experience across channels.

In addition, it’s important to think about the payments piece. Work with a partner that enables you to offer your customers choice in terms of payment methods, so your customers can pay with traditional cards but also digital wallets, buy now pay later solutions, rewards points, and more. Finally, as online commerce is increasing, so too is online fraud. It’s important to work with a partner that can help you effectively combat and manage fraud.

Studies have shown that a bad customer experience will lead to customers moving away from the brand. How much attention should SMEs give to improving the customer experience? Which aspects of it should the focus mostly on?

Customer experience truly is a differentiator. Customers are looking for fast, seamless, secure, and delightful experiences, and they have a lot of brands to choose from. If a customer has a bad experience on a site, there’s a strong chance they won’t go back to that site again. With more than two billion digital global buyers, according to eMarketer, the reach has never been higher. Research has found that 80% of shoppers stop transacting on sites with a poor experience, and 47% of customers trust a seller with a good payments process.

Optimizing how and where payment options are presented throughout the shopping journey, not just at checkout, is critical. Busy, distracted consumers demand frictionless checkout. Despite the rise in e-Commerce, the average e-Commerce conversion rate across the industry is around 3%.

A good payments experience helps remove barriers that lead to reconsideration. It also lets customers stay excited about what they’re purchasing, instead of overthinking the payment and checkout piece and potentially abandoning their cart.

One thing businesses should consider when thinking about the customer experience is the full end-to-end customer journey—identifying points of a drop-off in the sales funnel, enabling cart abandonment retargeting so customers can easily pick back up where they left off and enabling customer choice when it comes to payment options.

Enabling a range of seamless and secure payment options – like PayPal for example – can help consumers convert. According to a comScore study, PayPal Checkout converts at 88.7%, which is 82% higher than checkouts that use other payments. So, the payment piece is a critical part of the customer experience.

While securing digital payments are key, customers have a variety of payment options to choose from today. What pitfalls should businesses avoid when managing their payments?

The way people pay has changed during the pandemic and we see a definitive shift towards digital payments. Consumers are also using smartphones and other wearable tech to make these payments. Understanding your customers’ behaviors and expectations is key to deciding the kind of e-Commerce and payments platform you choose Consumers could be abandoning their carts because they are expected to key in too much information, or it takes too long to process the payment, or their preferred payment option isn’t available.

Pick a platform that is customer-friendly, convenient, and secure. Finally, it’s important to offer your customers a choice. Don’t offer your customers just one form of payment. Consumers want to be able to choose from a range of payment options, from cards to digital wallets to buy now pay later solutions and even rewards points.

How is PayPal helping SMEs scale up their businesses, transact securely and protect their data?

(Photo by JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

Whether you’re selling online, in-person, or some combination of the two, PayPal delivers a complete and secure payments and commerce solution with the global scale and flexibility a business needs to stay competitive.

PayPal’s Commerce Platform helps businesses increase their local and international sales by providing flexible solutions that help businesses accept payments in over 100 currencies. We also help safeguard these transactions with 24/7 fraud monitoring, while Buyer and Seller Protection helps protect eligible transactions against chargebacks, reversals due to fraud, and claims that items were not received.

To ensure transactions are secure, PayPal tokenizes payment credentials and employs two-step authentication, which sends businesses a one-time personal identification number (PIN), which is unique for each login session.

End-to-end encryption is key to keeping data and PayPal business transactions secure. Our team of security and compliance experts is dedicated to educating customers on industry standards and supporting them in securing their critical assets.

As a two-sided platform, we can help businesses grow by connecting them with our more than 400 million global active accounts and helping them sell across borders and across channels – from social media to marketplaces to in-store, online, or in mobile apps.  We also have solutions for every stage of a company’s growth – from casual sellers to SMEs to large enterprises.

How is the PayPal business dealing with the competition in payments today? With the rise of digital banking and e-wallets, where does PayPal see itself in the industry in the future?

Since its founding more than 20 years ago, the PayPal business has been the leader in digital payments. Over the past several years, we’ve moved beyond our existing offerings to offer more financial services solutions for our consumers and more commerce solutions for our businesses. We processed $936 billion in total payment volume (TPV) in 2020 and are on track to reach US$ 1 trillion a year.

Digital payment usage surged during the pandemic and will only continue to increase. We expect the annual volume of payments we handle to triple by 2025, rising to US$ 2.8 trillion from US$ 936 billion in 2020.

To meet our customer’s evolving demands for safe and secure digital payments over the past two years, we launched new products like QR Codes for safe in-person payments, our buy now pays later solutions Pay in 4 and Pay in 3, and our buy hold and sell cryptocurrency service.  We also recently launched PayPal Zettle – our in-store POS and omnichannel solution for small businesses in the U.S.

Our latest development is the new PayPal App, which is laying the groundwork for other new products in the quarters to come. It currently offers a combination of financial tools including direct deposit, bill pay,  peer-to-peer payments, shopping tools, crypto capabilities, and more. PayPal business customers will be able to browse the discounts and offers inside the app, then shop and transact through the in-app browser. And this is just the beginning.

Lastly, how different are SMEs’ adoption to e-Commerce and payment security in the region? Are Singaporean SMEs better prepared compared to other SMEs in Southeast Asia?

An  ASME-Microsoft study has found that 83% of SMEs in Singapore now have digital transformation strategies in place, and these businesses have also transformed at a more rapid pace than what has been seen across other markets during the pandemic. Digitization has also led to an increase in cloud adoption, a 30% increase from 2019. Adoption has also been supported by the initiatives by the government to help SMBs shift to digital.

We have also seen significant growth in cross-border selling by Singapore businesses. According to PayPal’s Borderless Commerce Report 2021, amid its greatest-ever recession, cross-border shopping remains a defining feature of Singapore’s e-Commerce market. 78% of Singaporeans shop cross-border—the highest in the region (i.e. compared to 73% in Hong Kong, 49% in India, 39% in China, and 21% in Japan).  Almost 80% of online consumers purchase from international websites, largely driven by lower prices (56%), greater access to products not available in the local market (45%), and discovery of new and interesting products while browsing online (37%).

The post PayPal wants to help SMEs future proof their digital business appeared first on Tech Wire Asia.