Behold – the master art piece that you rarely get a chance to see. Observe the realistic fire that depicts the current “temperature” of the e-commerce space, opening an array of opportunities to what will be coming next. The fiery fire is hot, yet people are attracted to how much it is shinning. Seems like a realistic representation of how e-commerce has been a hot space for a really long time, yet entrepreneurs and some investors are still chasing after the dream of creating the best of same kind.
Ask any VCs, a lot of them will tell you that they think e-commerce has become too “hot” over the last 2 years. “Hot” meaning too expensive and too many. Hence, VCs are generally more picky and skeptical when a founder brings along an e-commerce idea.
To illustrate my point on the ecommerce market being too saturated, here is a list of some e-commerce ventures in South East Asia (I might have missed a lot more in the market!)
This is an intriguing scenario because some might ask – what is next?
With the many e-commerce companies in the market, the competition becomes much more intense and I can’t emphasize enough on this. This competition will be a battle of strategies and differentiation. The team that can bring in the most value add on top of the products that they are selling will be the winner in this fearsome battle where entrepreneurs will have many hair-pulling moments trying to figure out how else to make their customers happy and improve the metrics that they are being measured against. What this means is that there will be more opportunities for new ventures or ideas that exist to serve these e-commerce giants and dwarfs.
An area of interest for e-commerce companies would be on conversion ratio i.e. the probability of a lead being converted into actual sales dollars. Opportunities to pitch to these e-commerce companies will arise for analytics/intelligence ventures. E-commerce sites would want their visitors to be looking at items/goods that are most relevant to the characteristics and preferences of the unique visitors so that the chances of sales is higher. E-commerce sites would also want to know their customers better and be able to project the purchasing behavior, hence improving their inventory management protocol. In short, increasing chances of sales (so to increase revenue) and better managing inventory (so to reduce cost).
Another area of value add e-commerce sites would want to bring to their customers through improving payment and delivery experience as well as the fulfillment process. Payment has always been a key for e-commerce companies, especially when online buying is still a new habit for most countries in this part of the world. Deliver experience is also one area where a lot of customers complain about. Given the geographical condition of the region, it makes it more challenging for logistics company to tackle this issue.
To summarize my thoughts, beyond e-commerce we will see a lot more opportunities for entrepreneurs in this region to create a viable solution. As such, I believe investors should be more active in covering the space that I mentioned.
That’s all for this round. Til next time.
P/S: All the above are merely my personal rant and shall not be taken into account reaaaaalllyyy serious decision making.