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News  19, Jun 2014

Echelon 2014: Where is e-commerce headed? Redmart Co-founder reveals

Martin Pasquier, Lead Explorer, Innovation is Everywhere writes about Redmart’s Roger Egan’s address during Echelon and the predictions made

roger

I do love to network at tech events, and I also do love to sit down and listen when it’s worth. At Echelon, I’m rarely disappointed.

The morning session on the ‘Future of e-commerce’, by Singapore online grocery store RedMart Co-founder Roger Egan proved insightful, making both a synthesis of all what’s been happening recently with Apple, Alibaba and Uber, while also providing a lot of reasonable (or not!) predictions for the coming years.

Also Read: Echelon 2014: How e-commerce is evolving and what the future holds

To give a few words on the context, Echelon is the biggest tech conference in Southeast Asia, which took place a few days ago in Singapore, and RedMart is one of the top e-commerce companies in the region in online groceries, with US$12M raised so far, 200 employees in a bit less than three years.

E-commerce is eating the world… and there’s still room for disruption

ecomm1

It’s never useless to get a refresher on e-commerce and online shopping stats. This graph – stopping in 2011 – shows how much online shopping is booming, and also what industries remain to be shaken up by startups. Food & Beverage looks like a tough one, but hey, who said it would be easy anyway?

As Roger Egan stresses, e-commerce beat brick and mortar on every point, from price (no space to rent or idle employees), product range (no physical limitation to ware houses) and of course the experience (no queues, no heavy bags for groceries).

And it’s a vicious circle. Once online shopping starts in an industry, there’s no going back, as better prices/range/experiences keep people online, increase cost of maintenance of shops with less revenues.

Southeast Asia is quite an untapped US$330 billion market with less than one per cent of shopping actually taking place online. Little wonder that companies like Rocket Internet, Alibaba or Rakuten all invest here.

Evolution of e-commerce trends
This is when having a co-founder of a success story makes a difference, they know what they talk about and are able to simplify the complexity of announcements, investments and acquisitions happening at a fast pace these days.

First, you can see the field of e-commerce as a game of platforms (yes, I also wanted to write “of thrones”). These two pictures show how different it works for:

  • B2C e-commerce (less control on experience, on stock availability) such as Amazon and RedMart or Lazada in Southeast Asia
  • Traditional marketplaces (lot of selection, no customer experience) like Tmall, Rakuten in Asia
  • Asset Light Instant Delivery Marketplaces like FoodPanda, Instacart, Uber, eBay. Now, who partners with retailers and have personal shoppers who buy the stuff and get it delivered in an hour or a day
  • Subscription based e-commerce such as BellaBox, Dollar Shave Club — highly convenient if you have the purchasing power
  • C2C platforms like Taobao
  • Private Label and value added services such as Zalora, Warby Parker, Bonobos (you send back what you don’t want)
  • Daily Deals such as Gilt, Groupon
  • Price comparison engines — mySupermarket, Pinterest, VroomVroomVroom, mogujie.com — where you select from many, keep only the best
  • Fulfillment/Delivery such DHL, or recent alliance of SingPost and Alibaba, Ta-Q-Bin
  • e-commerce software platform to ensure the last mile delivery.

Recent e-commerce trends in the industry includes:

  • From “the everything store” (Amazon, Alibaba, JD.com) fighting with big retailers such as Walmart or Tesco, teaming up with delivery and added services, and a few being out of the scope (Bonobos: let’s do everything ourselves)
  • Blurring lines between logistics and e-commerce companies (the site is the easy part), between retailer and manufacturers as well (what future for P&G or Unilever?)

Future e-commerce trends: Tech companies will win in any case
Last but not least, Roger Egan played the game of predictions and gave a few cool insights and bets that we share here:

  • The great e-commerce convergence: B2C and marketplace converge (purchasing power of B2C + fast growth of marketplace) as seen with Amazon buying Zappos, Diapers.
  • The entire control on supply chain and logistics win: The site is easy, the supply chain is hard. It’s hard not to think about how Apple made a closed garden, but one which works.

  • Tech companies and e-commerce companies converge, especially if we take into account the recent moves of Google Express, Alibaba in Singpost, Apple into Beats, Uber into same-day delivery ambitions.
  • Content, community and commerce converge, with Pinterest being an obvious case (and winner), where pictures can be shared and links back efficiently to e-commerce websites (you can now even have e-mail alerts when the price of one of your pins drop)
  • Ecosystem wins, with a bigger value than the sum of its part.
  • Retailers will become manufacturers: now that they master the distribution, why wouldn’t they be tempted to build the things they sell? P&G and Unilever may well be next on the list of big disruptions
  • Convenience and gratification are key: drone-delivery, 3D printed replacement parts, will increase brand loyalty.

These trends should be a tool for you to use and ask yourself where do you position yourself and potential lines of future disruption.

The author of the article is Martin Pasquier, Founder and Lead Explorer, Innovation is Everywhere 

The views expressed are of the author, and e27 may not necessarily subscribe to them.

e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested to share your point of view, please send us an email to writers[at]e27[dot]co

Martin Pasquier

Martin Pasquier

A globe-trotter by education with 10+ years in Europe, Central Asia and South-East Asia, Martin travels a lot to keep his brain "on" and discover new people, new uses, new cultures. He's based in Singapore, where he also runs a boutique social media agency where he serves clients of all sizes in their digital journey, a trade he's been doing for more than 6 years.

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