Who are the challengers worrying e-commerce leaders in Southeast Asia?
The Asian e-commerce market represented 57.4% of the global market in 2019, and this figure is set to reach 61.4% by 2024. In Southeast Asia, and Singapore in particular, two main marketplaces stand out.
Lazada, acquired by Alibaba, dominated the landscape until a few years ago. In 2021, it was overtaken in terms of market share by Shopee, launched by Sea Limited, the region’s biggest tech firm. Despite the dominance of these two players, newcomers such as Kaikai, Carousell and aCommerce, offering fresh approaches to the traditional marketplace model, are determined to make a place for themselves in this hyper-competitive market… Can they really succeed?
Kaikai enables customers to compete for limited offers to be retrieved in stores
The Singapore-based company Kaikai stands out with a model that gamifies the buying process. It puts customers into competitiobn for exceptional offers, with discounts of up to 50% on goods such as luxury products. Users must log in at noon and 8 pm sharp, and have just 100 seconds to decide whether they wish to buy before the offer expires.
First come, first served! The app generates a frantic race to be the first to reserve the offer before the set deadline. It also stands out with a click-and-collect model where customers buy online and pick up their order at a store. To keep on offering more and more discounts, Kaikai works only with local retailers. This enables the company to avoid managing logistics, which is one of the most complex dimensions of e-commerce.
An immediate success
Just one week following its launch in Hong Kong in September 2021, the app reached first place in the shopping category and third place in the overall ranking of downloads in the App Store. The business model is based on partnerships with brands looking to promote specific products, generate footfall in their stores, and collect data on consumer tastes and habits.
Carousell, the secondhand marketplace app, is already attracting more visits than Lazada in Singapore
Carousell is a classifieds app enabling people to buy and sell goods, similar to Facebook Marketplace. Founded in Singapore, in 2012, the company now has a presence in many Southeast Asian countries. With 12.8 million monthly visits notched up in January in Singapore alone, the leading secondhand goods platform is attracting almost as many visitors as Shopee, with its 16 million visits, and has even overtaken Lazada, which records 7.7 million monthly visits.
Diversification from C2C to B2C
Capitalizing on its impressive visitor numbers, Carousell is now looking to diversify and seems set on expanding its offering to professionals. The company recently acquired Ox Street, a sneaker and streetwear marketplace, and there are rumors that the group may soon buy out 99.co, a property and real estate listings website.
CEO and co-founder of Carousell, Quek Siu Rui, recently stated that the company is looking for potential acquisition opportunities to develop re-commerce by expanding its buying categories and markets. Carousell is also aiming to enhance the secondhand goods user experience.
"Our goal is to make transacting in a secondhand marketplace as convenient and trusted as any e-commerce platform so that secondhand can truly be the first choice.”
Thanks to the growth of the secondhand market and greater awareness of the impact of over-consumption on climate warming, Carousell has its sights set on becoming an Asian e-commerce market leader and shaking up the current model. Carousell is also planning for its likely public listing in 2022.
aCommerce wants to give power back to brands
Brands themselves could well become competitors of marketplaces. This is the mission that the company aCommerce has set itself. It wants to enable its clients to develop their own e-commerce platforms and thereby regain access to precious data on consumers and their buying habits. Founded in Thailand in 2013, the company provides a wide range of e-commerce solutions, particularly for digital marketing and platform development, as well as customer service and delivery service management. As the main e-commerce facilitator in the region, aCommerce has already assisted more than 173 clients, including big names such as Uniqlo, Philips and Nivea, in five Southeast Asian countries. Brands that previously relied on Shopee and Lazada are now launching their own online sales platforms, hoping to win independence from marketplaces.
The dominance of e-commerce giants like Amazon seems to be unshakeable. However, the example of Southeast Asia shows us that, against all odds, a firmly established model can be rapidly disrupted. Lazada lost its leading position to Shopee last year, while direct and indirect competitors like KaiKai, Carousell and aCommerce are gradually gaining ground. Lazada’s parent company, Alibaba, has been weakened by a number of regulatory setbacks in China, while that of Shopee by Sea Limited, has also suffered several blows related to the loss of momentum of its hit game Free Fire and copyright infringements. Troubles destabilizing these two big players are opening up an ideal window of opportunity for outsiders looking to elbow their way into the e-commerce market!