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Opinion: Marketplaces are the new search engines in Southeast Asia

Ecommerce in Southeast Asia (SEA) is heating up. Google Shopping Ads recently launched in Singapore, with plans to expand across the region. Amazon is similarly making headlines for an upcoming regional launch and new advertising solutions. Alibaba is also already in the market, with its latest move of putting 400,000 products on Lazada through Taobao Collection.

The fact that international giants are investing in SEA shows we are building toward a tipping point. In eight years, ecommerce in SEA is predicted to grow 43 times, from US$5.5 billion to US$238 billion, mostly due to rising mobile penetration, infrastructure, and income levels. Indonesia alone is set to capture 52 percent of SEA’s ecommerce business by 2021, and ecommerce revenue is forecast to double in the next four years.

Sellers are now looking at an unprecedented opportunity to increase their visibility and break into new markets through the growth of global channels. Underpinning that is a need to structure ecommerce product data for compatibility across platforms.

Delivery Challenge

In Southeast Asia, the majority of ecommerce buyers shop mobile-first, which usually means marketplace-first. For instance, in Indonesia, marketplaces with lightweight mobile apps such as Bobobobo and Shopee are on the rise. However, delivery presents a challenge for sellers trying to reach customers both locally (in tight Jakarta traffic) and overseas, where shipping costs can skyrocket.

If Amazon can replicate its Fulfilment by Amazon (FBA) product in these markets, sellers may have an easier way to solve the challenges of last mile delivery. However, sellers will need to integrate FBA with their existing logistics and platforms to ensure they maintain their reach.

Growth Opportunities

Google Shopping entering the region provides new opportunities for brands to expand their presence. Shopping ads offer visibility and the ability to show information about what products are available at the time of intent.

In Thailand, we’re also seeing the rise of social commerce—searches that start through social. Buyers see a recommendation based on something they like on Instagram and buy it from the seller’s personal account through a direct message. Facebook is already testing buy buttons in Thailand to make this process more seamless, enabling users to see a post they like and immediately pay via a credit card, debit card, or bank transfer.

As more products are uploaded onto marketplaces, competition for share of voice will continue to grow. Younger marketplaces like Tencent are also aggressively expanding their regional presence.

Each platform, whether Amazon, Google, or various local marketplaces, uses their own system to manage keywords and categories. That makes high-quality searchable data even more important.

What should sellers do next?

Sellers need to have a multichannel approach to their marketing. Customers are searching not just on search engines, but marketplaces themselves. Hence, they need to be present everywhere their customers are searching.

In the US for instance, major retailers have a presence on Amazon, Google Shopping Ads, and other platforms as part of their multichannel marketing approach. These platforms require an up-to-date product data feed to surface a retailer’s catalog.

In order for this to happen, the foundations are automation and high-quality, structured data. It is critical that prices and stock levels are synchronized to ensure visibility.

This post is also available in: Indonesian