Alibaba’s presence in ASEAN region will help integrate China, SE Asia markets

By Hu Weijia Source:Global Times Published: 2016/9/12 0:33:39

Following Chinese e-commerce giant Alibaba Group's recent announcement of boosting investment and its presence in the market of the Association of Southeast Asian Nations (ASEAN), a question comes to mind - can China and Southeast Asian countries integrate each other's huge consumer markets via e-commerce platform?

The 13th China-ASEAN Expo kicked off Sunday in Nanning China's Guangxi Zhuang Autonomous Region, with a speech at the opening ceremony from Alibaba Chairman Jack Ma. Ma's ambition to expand the company's investment in the ASEAN region has once again attracted wide attention, after Alibaba earlier this year bought a controlling stake in the Singapore-based e-commerce platform Lazada Group, which is reported to operate in six countries that have a total population of around 560 million.

"Southeast Asia's e-commerce market will likely more than double in the next five years," according to the Nikkei Asian Review, citing a report by research company Frost & Sullivan.

Despite the fact that retail e-commerce represents a very small share in total retail sales in Southeast Asian countries, the nascent e-commerce sector, which has great potential, has attracted global e-commerce giants, Alibaba included.

However, it is unlikely to be plain sailing for Alibaba in its attempts to win local consumers in ASEAN countries due to challenges such as underdeveloped logistics systems and low use of online and mobile phone payment in the region. Additionally, all global e-commerce giants will be beset by the complex procedures on customs clearance in ASEAN countries.

Fortunately, governments in many ASEAN countries hold a positive attitude toward Chinese investment targeting the e-commerce sector. Media reports said Indonesian President Joko Widodo visited Alibaba's headquarters in Hangzhou, China's Zhejiang Province earlier this month and asked Ma to be an e-commerce adviser on a government committee. It seems the Southeast Asian country wants to learn from China's experience to develop its nascent e-commerce sector.

After some ASEAN countries have embraced Alibaba with passion, Ma on Sunday responded in kind. Ma said at the China-ASEAN Expo that the e-commerce giant would "participate in the development of local small and medium-sized enterprises (SMEs)," according to Xinhua News.

Hopefully we can look forward to Alibaba's cross-national e-commerce platforms helping to integrate the consumer markets between China and ASEAN countries. For instance, Alibaba's increased presence in ASEAN markets and its close cooperation with local SMEs is likely to help encourage the sale of "Made in ASEAN" products in the Chinese market.

According to official data, China saw its overall trade with ASEAN drop 7.3 percent year-on-year in the first eight months this year, with ASEAN suffering a deficit with China. A cooling in economic exchanges between China and its southern neighbors has drawn attention following the South China Sea dispute. Now China may need to consider a more positive attitude about promoting the development of cross-border e-commerce. A number of concrete measures such as simplifying customs procedures for e-commerce platforms may need to be taken.

The author is a reporter with the Global Times.

Posted in: Eye on The Economy

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