Alibaba and Amazon.com, Inc. are in a sort of a cold war for e-commerce leadership in Asia, says a report from Forbes by Anh-Minh Do. This is the most important e-commerce battle worldwide, even more intense than the battle between Walmart or Amazon or between Amazon and other new players in the e-commerce business.
Investing big to enter Asia
In India, Snapdeal and Flipkart are facing cash-rich Amazon, who is set to pump around $3bn in the country . As per rumors, the US firm will also pump around $600m in Indonesia. The online retailer is playing a big game here, by trying to win Indonesia in the East and India in the west. The US e-commerce giant is picking its battles in the region quite carefully, with a new potential center point in Singapore, says Do.
Alibaba, the Chinese retailing giant is not wasting any time either. It is shelling out $1bn to buy the heavy spending e-commerce business – Rocket Internet’s Lazada. Also, the Chinese firm is extending its investments in the Southeast Asian region via Ant Financial, its financial arm.
The question is whether it is a good thing that both Alibaba and Amazon are entering the Southeast Asia from all sides. From the consumer perspective, the online companies will, no doubt, burn as much as possible for the market share. So, it will be good for consumers, but, what about the existing e-commerce sites and retailers in Southeast Asia?
Are smaller e-commerce sites prepared for Alibaba or Amazon?
Clearly, the smaller e-commerce businesses do not look prepared for Alibaba or Amazon.com, Inc. . Flipkart – the e-commerce business based in India – is marking down its valuation. In addition, the Southeast Asian e-commerce sites do not look much prepared as well. The smaller e-commerce businesses in Southeast Asia are about to face two online retailing giants that are ready to outspend each other.
Another question that arises is – Will the governments and large conglomerates of Southeast Asia do anything? Or will we see protectionist regulations that foster startups and innovation in local countries to fight against the giants? Well, as of now, there is no answer to this.
The war between the two – Alibaba and Amazon.com, Inc. , also emphasizes the importance of Southeast Asia as a market. Southeast Asia could decide the fate of Amazon and Alibaba in their global expansions. Africa, South America and the Middle East are surely on their long-term list, but Southeast Asia is ready. As for America and China, they both are already dominated by their e-commerce incumbents.
Will these two e-commerce giant be adding or subtracting value to the hottest subcontinent in the world and the most funded industry in tech? We will have to wait and see.