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How successful will Amazon Prime Now be in Singapore?

Nurdianah Md Nur | July 28, 2017
So what's the plan for Southeast Asian e-commerce players if they want to better compete with Prime Now? Forrester, Gartner and Qoo10 share their thoughts.

Meanwhile, Satish Meena, senior forecast analyst, Forrester, is optimistic that Prime Now will be well-received in Singapore and become a big contender in Singapoe's e-commerce space, just as it had in India due to its "superior customer experience and logistics networks."

"[In India], customers using Amazon Prime buy more frequently, purchase more categories and spend more on Amazon than non-Prime customers. This makes Amazon the default option of majority of the online purchases, leaving little incentives for customers to check products on other online retailers," he said.

 

What Southeast Asian e-commerce players need to do to step up their game

A report by Temasek and Google last year predicted that e-commerce sales in Southeast Asia will grow at a 32 percent compound annual growth rate (CAGR) to reach US$88 billion in 2025.

With Amazon entering this region through Singapore, how should existing local and regional online retailers ensure that they will be able to have a bite of the e-commerce pie?

According to Forrester's Wang, existing e-tailers will need to differentiate themselves with unique offerings. For example, they can offer broader product lines, more brand options, faster delivery, better return policies, lower price, and more aggressive promotions.

She also advised e-commerce players to focus on improving the customer experience. This could be done by working with logistics vendors and local suppliers, as well as leveraging new technologies, to provide personalised offerings, and better targeting capabilities.

Besides that, online retailers need to think of how to maintain customer loyalty with a competitive loyalty programme that can bring extra value to customers, she added.

Qoo10 is one of the e-commerce players that has made strategic moves, even before the launch of Prime Now in Singapore, to counter the increasing competition in the sector.

For instance, the online marketplace has been offering online shoppers in Singapore its Quick Delivery service since February this year.

HyunWook Cho, Qoo10 Singapore Country Manager, shared with CIO Asia that the service enables shoppers to receive products bought from local merchants within three hours of purchase (except for Jurong areas and Sentosa). It does so by leveraging the strength of its distribution network through its logistics arm Qxpress. "This has drastically reduced waiting time and at the same time enhanced customer convenience and satisfaction."

In addition, customers are given a self-pick up option if the merchant offers that option.

Qoo10 has also leveraged gamification to attract new customers and retain customer loyalty. In January this year, it launched a GPS-enabled mobile game called MameGo! in Singapore. Shoppers are given three Mameballs every day to catch Mamemons, which can be exchanged for discounts, sale coupons or Qpoints. As the game not only entertains but also rewards customers, it will help drive customer loyalty for the company.

 

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