Bracing for the Amazonian threat and treat

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Amazon’s customer base in Malaysia tends to consist of book and music CD aficionados looking for offbeat, rare or unusual titles – but all this may change when the AmazonGlobal Saver Shipping program arrives at our shores one day.

Amazon’s customer base in Malaysia tends to consist of book and music CD aficionados looking for offbeat, rare or unusual titles – but all this may change when the AmazonGlobal Saver Shipping program arrives at our shores one day.

By Oon Yeoh

Malaysia is a small country and its market is not big enough for big Internet players to pay much attention. That’s good because it has allowed home-grown dotcoms to emerge and, in some cases, to flourish.

Today, you have JobStreet, which is Malaysia’s answer to Monster. You also have Lelong, the local equivalent to eBay. Then, there’s Mudah, which is a sort of localized version of Craigslist. None of these would have had a chance had the Big Boys come to town at an early stage.

For almost every sector in the dotcom scene, there has emerged a local player which has grown to become quite big. But one sector that hasn’t seen a local player blossom in a big way is online retailing. There is no local equivalent to Amazon.com.

Amazon has always served the Malaysian market. I made my first order from that company about 15 years ago. The packaged arrived safe and sound. The postage and handling charges were rather high but I was willing to pay the cost in order to get certain books and music CDs that were hard to find here.

The high delivery costs have hindered its growth here. As a result, its customer base here consists of book and music CD aficionados looking for offbeat, rare or unusual titles that are not stocked here.

It was the same for our Southern neighbour Singapore. But things have just changed for them. Earlier this month, Amazon announced that orders amounting to more than US$125 would be eligible for free shipping to Singapore (as well as to India).

There were media reports that other Asian markets like Malaysia and Thailand would be next, but to date there’s been no confirmation of that and a query I sent to Amazon’s PR department has not yielded any response yet.

Will it happen? Malaysia is not a big market for Amazon but, then again, how big is Singapore? If the company can offer its AmazonGlobal Saver Shipping program to the island republic, it should have no problems offering it to us, eventually.

Assuming that Amazon does extend this program to Malaysia, what does it mean for the nascent online retailing scene here?

As mentioned before, there is no Malaysian answer to Amazon, only a lot of small little players. Those offering niche products through blogshops and eBay or Lelong won’t have to worry. They can continue to serve their niches.

The companies that have to be concerned are those that sell items similar to Amazon. Online book retailer MPHOnline is one company that has to find strategic ways to stay competitive should  Amazon start to offer free shipping here.

No doubt it would take longer for the books to arrive from the US but Amazon has a catalogue that’s far bigger than any other online bookstore in the world. That’s pretty tough to fight.

One area where MPH Online might be able to carve a niche for itself on is e-books. The AmazonGlobal Saver Shipping program does not include Kindle (the e-reader) or Kindle books for the Singapore market. It’s unlikely to offer it here in Malaysia anytime soon.

The other player that will be affected is Lazada, an online retail outfit whose parent company is in Germany but which operates a local online retailing portal here in Malaysia (as well as in Indonesia, the Philippines, Thailand and Vietnam).

Launched just last year, Lazada cannot be said to be an established online retailer. And it sells many of the things Amazon does, including consumer electronics, household goods and sports gear. It’s ripe for cannibalization. Can it have a chance if Amazon offers free shipping here?

Maybe, because there are still many things in Amazon’s catalogue, which includes some electronic items, that will not be available for sale to this region. This is where Lazada can come in and fill the gap. The fact that it has a local presence also gives it a competitive edge. By having things in stock locally, it can send out the goods much faster than Amazon can.

Whatever the case, increased competition is always a good thing. It keeps all the players on their toes and the consumers always benefits. I can’t wait for Amazon to extend its Global Savers program here!

Oon Yeoh is a new media consultant. He has written books on emerging technologies, entrepreneurship and social media.

Photo credit: Amazon

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