Is Cross-Border E-commerce in Southeast Asia’s future?

Is Cross-Border E-commerce in Southeast Asia’s future?

The ebay Inc. website is displayed for a photograph in Tiskilwa, Illinois, on Jan. 20. Daniel Acker/Bloomberg NewsJAKARTA, Indonesia—Growth of interconnected e-commerce across Southeast Asia could help improve the flow of goods in the region, create jobs and stimulate the economies of individual countries, say industry analysts.And with Internet penetration still low, there is plenty of opportunity for expansion.But to increase the e-commerce segment in the Association of Southeast Asian Nations (Asean), and eventually create a region-wide digital economy, both governments and businesses will need to address barriers to things such as online payments, lack of trust in online purchasing and logistical challenges that slow deliveries, both analysts and officials said at a panel during the World Economic Forum on East Asia.Other major economies have moved to building an interconnected e-commerce sector, said Aldi Harypratomo, co-founder of Ruma Indonesia, an organization that supports small-businesses in Indonesia by helping solving e-payment issues.“We can’t let Asean stay behind because we can’t figure out e-payment,” he said.Indonesia’s Minister of Information and Communications, Rudiantara, said a lack of infrastructure needed to provide speedy deliveries, and warehousing capabilities, drives up costs for e-commerce companies.

For example, e-commerce companies must ensure that the items they export are cleared by customs and ready to be shipped as soon as possible. The longer an item sits at customs, the greater chance it has of becoming unused inventory, since consumers will turn to turn physical retail shops rather than wait.Mr. Rudiantara said Indonesia is preparing rules that would support the integration of e-commerce with other sectors, such as transportation, logistics services, finance and payment gateways in an effort to solve the problem.By allowing these sectors to work together, the government can better tap into the huge potential offered by the cross-border sale of goods online, Mr. Rudiantara said.The coming of a region-wide Asean economic community by the end of 2015 could help since it’s meant to allow for the free flow of people, goods and services within the 10-member grouping.One of the AEC’s objectives is to create a seamless customs process, in part by removing tariffs and easing trade barriers.But the market in Southeast Asia also needs to build trust, sophistication and work to better educate consumers before e-commerce can really take off, said Yobie Benjamin, co-founder of Michigan-based Avegant Corporation, a virtual display manufacturer.Aside from Singapore, e-commerce services in the region are being used as “research vehicles,” to know how much a product costs, for example, he said. After consumers figure that out, “they will drive to the store to purchase it or meet somebody who sells it and pay with cash.”


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