The Southeast Asian e-commerce market has seen a massive growth in the last couple of years since the pandemic and it’s expected to grow at a CAGR of 11.14% within the next 5 years. With over 600 million potential buyers, and robust shopping platforms, there are many reasons and benefits for businesses to pursue cross border e-commerce.
Lazada was made available in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. And later in 2015, Shopee was launched in all those markets plus Taiwan. Both of these platforms can handle shipping, payments and even translations, letting you focus on your products.
Maybe you’re already running a successful e-commerce business and thinking of diversifying your market reach to the rest of Southeast Asia. Or you’re a seller looking to setup on marketplaces both locally and internationally. If so, cross border e-commerce is a great place to start.
What is Cross Border E-Commerce?
Cross-border e-commerce refers to the buying and selling of goods or services between consumers, merchants, or brands across different countries through online platforms. Essentially, it involves transactions where the seller and the buyer are located in different countries.
This is usually facilitated by the platforms, which includes local solutions such as eWallets and online banking that cater to cross-border functionality. Logistics is another cornerstone, encompassing shipping, customs clearance, and last-mile delivery to ensure timely and efficient fulfillment of orders.
Sellers must also be aware of compliance requirements, taxation policies, and import/export regulations to avoid legal issues, maintain operational efficiency and manage customer service.
Cross Border E-Commerce with Shopee and Lazada
Shopee and Lazada make cross-border e-commerce easy by offering integrated solutions tailored for sellers in Southeast Asia. For example, Shopee’s International Platform (SIP) allows Malaysian sellers to list products across regional markets like Thailand or Singapore without needing separate accounts. Lazada offers a similar program, enabling sellers to reach six SEA markets, including Indonesia and Vietnam.
Both platforms simplify logistics with services like Shopee Logistics Service (SLS) and Lazada Global Shipping (LGS). Sellers drop off items locally, and the platforms handle international shipping, customs clearance, and delivery. They also process payments in local currencies, making transactions seamless for buyers while sellers get paid in their preferred currency.
Language barriers are reduced with automatic translation tools for product listings, and regional marketing campaigns, like Lazada’s Birthday Sale or Shopee’s 11.11, increase visibility. Customer service teams handle buyer inquiries in local languages, so sellers can focus on selling without worrying about managing international customers.
However, since these programmes are still smaller scale and in development, sellers within Southeast Asia often have to be invited to reap the benefits.
International sellers looking to enter Southeast Asian markets have a comparatively easier time. To set up a store on Lazada or Shopee, you simply need a registered company in their home country and the ability to ship products to sorting centers in China/Hong Kong. Once these requirements are met, Red Dino can assist in connecting you with the right platform representatives to facilitate account activation.
Alternatively, sellers can establish a local presence in SEA, but this requires setting up a local company. Red Dino offers a proxy seller account setup service, where accounts can be created under a local partner’s name, provided the products are stored locally. This setup enables selling in SEA without directly registering a local company, with operational support and remittance coordination handled on your behalf.
Not a Cross Border Seller Yet? Want to Know More About Setting Up Your Online Presence in SEA?
Positional Advantages of Cross Border E-commerce into Southeast Asia from Malaysia
Why should you expand your e-commerce business to the rest of Southeast Asia? Well, if you’re based in Malaysia, there’s many positional advantages that make it an ideal hub for regional expansion.
1. Strategic Geographic Location
Malaysia is centrally located in Southeast Asia, giving it easy access to key markets in the region, including Indonesia, Singapore, Thailand, the Philippines, Vietnam, and Myanmar. This central position enables efficient shipping and distribution across multiple countries, minimizing delivery times and reducing shipping costs compared to other regional bases.
2. Established Logistics Infrastructure
Malaysia boasts a well-developed logistics and transportation network, including air, sea, and land routes, making it a convenient base for managing cross border e-commerce. The country is home to major ports like Port Klang and airports like Kuala Lumpur International Airport (KLIA), which facilitates smooth international trade and faster product deliveries to neighboring SEA countries.
3. Trade Agreements and ASEAN Membership
As a member of the Association of Southeast Asian Nations (ASEAN), Malaysia benefits from various trade agreements that facilitate easier and more cost-effective cross-border commerce within the region. These agreements often reduce tariffs, encourage regional collaboration, and streamline customs processes, making it easier to sell across SEA countries.
4. Developed Digital Economy
Malaysia has a rapidly growing digital economy, with high internet penetration rates and a growing tech-savvy population. The adoption of e-commerce platforms like Shopee and Lazada in Malaysia is high, and many consumers in SEA countries are already familiar with Malaysian-based sellers. This digital landscape makes it easier for Malaysian businesses to scale their cross-border e-commerce operations with a local and regional customer base.
5. Cost Efficiency
Running a business in Malaysia can be more cost-effective compared to other regional hubs. Labor and operational costs, such as rent and utilities, tend to be lower, providing an advantage when scaling up e-commerce operations. This allows for competitive pricing while maintaining healthy margins, especially when selling to price-sensitive markets in SEA.
6. Strong Financial and Payment Infrastructure
Malaysia has robust banking systems and financial infrastructure, making it easier for businesses to manage cross-border transactions and currency conversions. Local payment gateways like iPay88 and international ones like PayPal are widely used, and Malaysia’s financial regulations make it relatively easy to transfer money across borders, facilitating smooth international business operations.
7. Government Support for E-commerce
The Malaysian government offers various programs to support the growth of e-commerce, especially in cross-border trade. Programs like the Malaysia Digital Economy Blueprint (MyDIGITAL) promote digital transformation in the country, while the SME Corporation Malaysia provides support for small and medium enterprises (SMEs) aiming to expand internationally.
With these advantages, Malaysia provides a solid foundation for businesses looking to tap into the lucrative SEA market. Whether you’re looking for logistical convenience, favorable tax conditions, or a diverse, multilingual workforce, Malaysia’s position and infrastructure offer a strategic edge for cross-border e-commerce.
How Difficult Is It To Manage Cross Border E-Commerce?
Managing cross border e-commerce can range from moderately challenging to complex, depending on the scale of your business, the number of markets you target, and the resources you have. Here’s some of the things you’ll have to consider–
Logistics & Fulfillment
Shipping products internationally introduces complexities such as ensuring timely deliveries, managing customs clearance, and offering efficient return solutions. Each country’s customs regulations and duties can vary, making it necessary to work with logistics partners who specialize in cross-border shipping.
Regulatory Compliance
Adhering to local tax laws, import/export regulations, and data privacy rules in each country is one of the most critical challenges. Non-compliance can result in fines, delays, or even bans on selling in certain markets.
Marketing & Competition
Breaking into new markets often means competing against established local players and global giants. Building brand awareness in a saturated market requires innovative marketing strategies and a significant budget. Leveraging local influencers, optimizing listings for regional e-commerce platforms, and running targeted ad campaigns are just some tactics to stay ahead.
Inventory Management
Effectively managing stock levels across multiple markets is essential to avoid issues like overselling or delayed deliveries. Balancing inventory requires real-time tracking and integration with your supply chain to ensure demand is met in each country. Businesses may need to establish regional warehouses or use fulfillment centers to streamline operations.
Customer Support
While platforms like Shopee and Lazada offer basic customer service, they often don’t provide dedicated support tailored to your brand. Outsourcing customer support can give you multilingual 24/7 chat or email support, along with specialized assistance for product-specific queries or complaints.
Logistics and Fulfillment
Though platforms offer shipping solutions, some sellers prefer to outsource logistics to maintain control or reduce costs. Outsourcing warehousing, inventory management, international shipping, and handling returns can ensure a smooth operation.
Tax Compliance and Accounting
Cross-border e-commerce involves complex tax regulations such as VAT, GST, and import/export taxes. You can outsource tax filing, currency exchange, and financial reconciliation to accounting firms or tax compliance software.
Photography and Content Creation
High-quality visuals are essential for product listings and marketing. Outsourcing photography, videography and graphic assets ensures your products are presented in the best light, and it includes services like editing and optimizing visuals for e-commerce platforms.
Data Analytics
Platforms provide basic insights, but outsourcing advanced data analytics can help guide your business strategy. This includes performance analysis, customer behavior trends, and competitor benchmarking. Tools like Tableau and Google Data Studio (with consultant assistance) can provide in-depth analysis for better decision-making.
Business Consulting
Expanding into cross-border e-commerce requires strategic planning and localized expertise. Business consultants can help with market entry strategies, scaling your operations, and partnering with local distributors.
The Southeast Asian presents immense opportunities, thanks to the region’s rapidly growing economies, high smartphone penetration, and increasing middle-class purchasing power.
But to reach potential buyers, businesses must navigate challenges like regulatory compliance, logistics, and competition, while tailoring marketing strategies to local needs. Partnering with established platforms like Lazada or Shopee can streamline entry, and outsourcing key tasks like logistics and customer support ensures efficiency.
With approach, businesses can tap into SEA’s thriving e-commerce potential and expand their market reach.
Discover End-to-End Solutions with Red Dino Ventures
Interested in expanding into or within Southeast Asian markets? Easily manage platforms across different regions with Red Dino’s e-commerce expertise. Get in touch now for a customisable plan and pricing for your business!
Address: No.15-2 Jalan Equine 10D, Taman Equine, 43300 Seri Kembangan, Selangor
Email: support@reddinoventures.com
Phone: +603-5879 9269
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