Amazon pushes into SE Asia with Singapore launch
SINGAPORE: Amazon launched its express delivery service in Singapore on Thursday, the US online retail giant’s first foray into Southeast Asia and a move that puts it in direct competition with China’s Alibaba.
Prime Now allows online shoppers in the affluent city-state of five million people to order a wide range of goods from baby products to food, electronic items and beer.
It marks Amazon’s entry into a region of more than 600 million people, where many countries have a growing middle class, and which is seen as the next e-commerce battleground.
“Amazon’s entry augurs well for shoppers in the region who will benefit from more choice, price competition and better delivery services,” said Prem Shamdasani, an associate professor for marketing at the National University of Singapore Business School.
Alibaba already has a headstart in the region with an 83 per cent stake in Southeast Asia-focused online retailer Lazada.
The Chinese firm, founded by China’s richest man Jack Ma, raised its stake in Lazada last month with a further $1 investment.
The Prime Now application was made available for download in Singapore on Google’s Play store and Apple’s iTunes.
By just entering their postal zip code after opening the app on their devices, online shoppers can start placing their orders.
The service promises delivery of items within two hours.
Business consultancy Frost & Sullivan projects online retail sales in Southeast Asia to more than quadruple to $71 billion by 2021 from $16 billion in 2016.
The e-commerce sector made up 4.1 per cent of the total retail market for the region last year but this share is set to rise to 11.5 per cent by 2021, the consultancy said.
But Shamdasani warned that it could be difficult market. Southeast Asia includes relatively wealthy countries such as Singapore, but also developing nations with poor infrastructure where it is harder to do business.
“While e-commerce is set to grow the market in Southeast Asia is relatively small and fragmented with narrow margins,” he said. billion