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E-commerce in South-East Asia

From The Economist
March 6, 2015

TROPICAL rain pounds on the roof of a cavernous warehouse near Jakarta, Indonesia’s capital. Inside, youngsters in orange T-shirts haul around clothes, luggage and electrical goods for Lazada, an e-commerce firm, which has just moved in. The 12,000 square metre space is three times the size of the depot it has vacated, but it already looks full. Three years ago Lazada’s entire stock filled a storeroom the size of a studio flat, recalls Magnus Ekbom, its twenty-something boss in Indonesia.

Internet shopping accounts for less than 1% of all purchases in South-East Asia—a region twice as populous as America, where the proportion is nearly 10%. But surging smartphone use and a broadening middle class mean the market is set to multiply; perhaps fivefold by 2018, reckons Frost & Sullivan, a consulting firm. Since it launched in 2012 Lazada has laid claim to six South-East Asian countries, largely unchallenged by e-commerce giants such as Amazon of the United States, Alibaba of China and Rakuten of Japan. It may soon have to fight them for its territory.

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