If eCommerce Is The New Gold ,What’s The New Oil?

Of late, eCommerce has been seen to overshadow traditional retail as we know it. The notion is that the current consumers prefer the most convenient & hassle-free method of shopping; online. This has long been accrued as the future of retail. There is a theory that in the very near future, consumers will only visit selected shopping malls to physically try or experience a product, just to go home & purchase from the seller offering the best deal. To a large extent, this might definitely be the case based on the serious penetration & disruption eCommerce has made in the recent years.

Having said that, this does not necessarily apply to all the verticals. For instance, consumers are still reluctant to purchase perishable items online. This might be caused by the notion that fresh or raw food items has a limited shelf life. This only cements the idea that eCommerce by itself is not holistic enough to fulfil all aspects of retail going forward.

eCommerce as a stand alone would not cut it. Consumers today have diversified needs and requirements for their purchases. The catalyst here is to provide just that, a multi-faceted O2O commerce. Enter Omnichannel Commerce. As Jack Ma terms it; “The New Retail”. An integration of online with the offline stratosphere driven by data. The best of both worlds. The “price tag” is poised to be at a whopping USD$105 billion by 2019. That pretty much validates the ethos that online and offline commerce must converge in order to fulfill this need.

The China Factor – Catalyst of The New Retail.

China is undeniably the leader of the “gold and oil” commodities of today, which is respectfully eCommerce & Omnichannel Commerce. This is evident with Alibaba arguably leading the way through a shopping spree of its own. In November last year, the e-commerce giant splurged HK$22.4 billion (USD$2.87 billion) to acquire a 36.16% stake in Sunart Retail Group, China’s top hypermart operator. The company followed that up in February 2018 with the announcement of plans to spend USD$486 million to acquire a 38% stake in Shiji Retail, which specializes in big data for retail and hotels, and an investment of USD$867mn in Beijing’s Easyhome Furnishing for a 15% stake. These bids serve to extend Alibaba’s intended reach to join existing investments in Suning Commerce Group and Intime Retail.

Recently, Alibaba Group Holding offered 2.6 billion dollars to acquire Intime Retail Group. By doing so, they are accessing 29 Megastores and 17 malls all over the country. This investment could give Alibaba the chance of digitizing that physical store. Also, they will offer consumer and brands more natural ways of consuming in an Offline to Online as well as Online to Offline experience fully.

In the coming years, we anticipate the birth of a re-imagined retail industry driven by the integration of online, offline, logistics and data across a single value chain. With e-commerce itself rapidly becoming a ‘traditional business,’ pure e-commerce players will soon face tremendous challenges.” – Jack Ma


This notion is further cemented by Tencent — a company best known for games and social media platforms, such as the leading messaging app WeChat — who has ventured into the world of O2O with investments and partnerships of its own. In December 2017, the company invested RMB 4.2 billion (USD$636 million) for a 5% stake in Yonghui Superstores (one of China’s leading superstore chains), a move that was followed the next month by the announcement of plans to take a stake in the China unit of the French supermarket chain Carrefour. In May, the supermarket chaib opened its first high-tech store in Shanghai, which featured cashier-less checkouts supported by Tencent’s WeChat Pay.

Tencent has also invested in the commercial property arm of Dalian Wanda Group, Wanda Commercial, spending RMB 34 billion ($5.4 billion) on a 14% stake. And the two companies partnered on a smart retail venture in May.

JD.com has also joined the fray, announcing plans in December for unmanned convenience stores across the country in partnership with developer China Overseas Land & Investment. The e-commerce company plans to open 1 million such stores by 2021, with logistics handled by JD’s own platform. In addition, its own O2O app, called JD New Dada, which retailers can use to facilitate grocery orders from consumers, and it has partnered with Walmart, introducing JD kiosks to US supermarket’s stores in China.

“Right now it’s the companies with the most data on consumer behavior (that are best placed for this trend),” says Ben Cavender, principal at the Shanghai-based China Market Research Group. “That means Alibaba, Tencent, JD.com and a handful of others.”

But it is not just investments and partnerships. Alibaba has rolled out its free-to-use Ling Shou Tong platform, which helps stores and manage their inventory. And in Alibaba’s O2O ecosystem, this is complemented by the company’s existing Cainiao logistics platform.

The centerpiece of Alibaba’s New Retail revolution, however, is its Hema Xiansheng supermarkets. Launched in 2015, it accepts payment through Alipay, has an app for the research and recommendation of products, uses data to personalize services and also acts a fulfillment center for delivering food to homes within a 30 kilometer radius.

The Untapped Opportunities in Malaysia

The retail and wholesale sales for 2017 (Jan to Nov) stood at a whopping RM97.7 billion with a year-on-year growth of more than 7% (2017 Retail Sales – Department of Statistics Malaysia). This only goes to show that the Malaysian consumer spending is at an all-time high. Having said that, out of more than 900,000 SMEs in Malaysia, only slightly over 20% have adopted multi-channel or omnichannel commerce for their business. This is largely due to high costs, complex technologies & lack of time. What the SMEs need is an omnichannel commerce platform that could fully automate & manage their digital business & beyond.

Henceforth, Commerce.Asia was conceptualized

Commerce.Asia is a leading Omnichannel Ecosystem Builder in South East Asia. We developed the Total Ecosystem Support Strategy (TESS), incorporating our own proprietary solutions, namely:

Commerce.Asia Capital (for Strategic Capital Investment)

Commerce.Asia Accelerator (a pioneer Silicon Valley Growth Acceleration Academy for Targeted Guidance & Mentorship)

These solutions, enrich technology enablers in Malaysia & SEA and aims to create an omnichannel commerce market access for Brands & SMEs in the region. Armed with TESS, we have successfully incubated & accelerated a number of technology enablers fulfilling major aspects of Commerce such as an automated online eCommerce platform & managed services with access to multiple marketplaces (Commerce.Asia Enterprise), an automated dropshipping platform (Igniter.Asia) with more than 100,000 SKUs as well as Integrated Shipping (Shippop.My), Delivery & Warehousing (LetMeStore) platforms. To date we have onboarded more than 40 merchants, 1200 resellers, and still going strong.


Drop us a line today if you are curious to know more at hello@commerce.asia or visit us at www.commerce.asia today!


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