The potential of ecommerce business in Southeast Asia

I am getting excited about the opportunities of eCommerce, especially after reading this post by Jeff Jordan called “the case of ecommerce acceleration“.  Basically, the point he made was the retailers have low margins due to their high operating costs that includes expenses such as rental, manpower, truck fleets for moving inventories, warehousing etc. The low margins meant that any pressure on the revenue line means a loss and a sustained loss of over 6 quarters can bankrupt any retailers.

However, despite the optimism of Jeff Jordan, there is a realistic issue that Chris DIxon has raised in his famous article on ecommerce startup: How to beat guys like Amazon who has better product range, customer service and prices? The answer, it seems, is to sell stuff that Amazon is not selling or sell in countries that Amazon has little footprint. It is due to the latter statement that I think Southeast Asia might be an interesting choice to start an ecommerce business.

The downside of course is whether the buying habits and the payment infrastructure can support such ventures. To understand this, I try looking for data points on the growth of ecommerce in Southeast Asia but couldn’t find any useful data. I even search the, which is the industry association for ecommerce in Singapore but their information is so low quality that it borders on being spammy. I download their free report and the ads contained within that report is simply incredible.

So, here I am. Faced with something that might be a solid online business idea for Singapore and yet has no facts or data to support my hypothesis. The best way then is to do something small and interesting and see how things go. I shall report back on any findings that my experiment will yield.

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