Will Ama­zon kill the re­tail stars?

Singapore Business Review - - CONTENTS -

When Ama­zon of­fi­cially launched its Prime Now ser­vice in Sin­ga­pore, one of the big­gest talk­ing points is whether it will snap most of the mar­ket share out of in­cum­bent e-com­merce play­ers and e-tail­ers like Lazada and on­line clothes store Zalora whilst can­ni­bal­is­ing tra­di­tional brick and mor­tar stores like Tesco in Sin­ga­pore.

To some ex­perts, Ama­zon Prime Now’s en­try may not ex­actly be a bad thing for e-com­merce and brick and mor­tar in­cum­bents. Lo­cal e-tailer Pe­lando.sg’s co-founder Mehul Joban­pu­tra be­lieves that the talk of com­pe­ti­tion is too pre­ma­ture for now. “Lazada has been around since 2011 and it has ex­panded to neigh­bour­ing South­east Asian coun­tries grad­u­ally,” he said, adding that Lazada’s on­line mar­ket­place is too well-po­si­tioned to be af­fected by the ar­rival of Ama­zon in Sin­ga­pore since they are cur­rently the “mas­ter of the re­gion with lo­cal ex­per­tise and Alibaba back­ing.” Mean­while, Gart­ner’s re­search di­rec­tor Adrian Lee said, “The in­cum­bents should worry as the fo­cus shifts to dif­fer­en­ti­a­tion of cus­tomer ex­pe­ri­ence and abil­ity to ful­fill a grow­ing and more dis­cern­ing con­sumer base.” Food­panda manag­ing di­rec­tor Luc An­dreani said that the whole can­ni­bal­i­sa­tion of the mar­ket and its play­ers re­ally de­pends on what kind of op­er­a­tional and growth model are be­ing com­pared.

For ex­am­ple, mar­ket­place models, like food de­liv­ery ser­vice food­panda, may not nec­es­sar­ily mean can­ni­bal­is­ing bricks and mor­tar be­cause there is still a value chain con­nec­tion there with these phys­i­cal stores pro­vid­ing the goods and the on­line ser­vice act­ing as the plat­form for con­sump­tion or de­liv­ery.

De­mo­li­tion of brick and mor­tar?

Shirley Zhu, pro­gramme di­rec­tor at IGD Sin­ga­pore, em­pha­sised the im­por­tance of the hu­man ex­pe­ri­ence in food shop­ping. “Shop­pers will al­ways want to touch and ex­pe­ri­ence a prod­uct in the flesh, es­pe­cially fresh food, so we be­lieve there will al­ways be a place for brick and mor­tar stores.” Zalora, for in­stance, needed to adopt and launch mo­bile pop-up stores in cer­tain cities in South­east Asia tagged as growth ar­eas, al­low­ing peo­ple to phys­i­cally see and ex­pe­ri­ence their prod­ucts as a guide be­fore pur­chas­ing on­line.

Shop­pers will al­ways want to touch and ex­pe­ri­ence a prod­uct in the flesh, es­pe­cially fresh food, so we be­lieve there will al­ways be a place for brick and mor­tar stores.

Zalora’s mo­bile pop up store

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