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ICMK424 Global Marketing Strategy (T3-2016)

Presented to:

Dr. Viriya Taecharungroj

The Global Insight: Capture market share using E-commerce

By

Mr. Tanachot Suksawat 5780018

 Every company in the world right now has faced high competitiveness. As the market expands
and demand increases, many firms try to come up with strategies that bring them advantages. One of
them is e-commerce. E-commerce is now emerging as stated by Robert Allen that it is growing rapidly
especially in Asia due to the increase of affordable devices that can access to the internet (Allen,
2017). Many firms can see these opportunities as it may reduce the cost, create ways to reach
customers, and solve problems like distribution channels. However, even in the e-commerce industry,
the growth in competitiveness is still high. It is very important for firms that want to enter into the
market with e-commerce to review their plans. These firms should also have strategic planning
regarding the market share left in the market as there are already big players who dominate the market.
In order to capture the market share in the market, the companies should deeply focus on big
competitors in the market, customer behaviour toward e-commerce, and many other external factors.
Therefore, this report will focus on the analysis of customer behaviour and big players in ASEAN,
India, China, Brazil, and Africa.

First of all, in the ASEAN market, there is a big opportunity for the firm due to large market
size. According to Aseanup, the amount of internet users in Indonesia, Thailand, Malaysia, Singapore,
Philippines, and Vietnam are 132.7 million, 46 million, 22 million, 4.71 million, 60 million, and 50.05
million respectively, which are all exceed 50 percent of total population (“overview of e-commerce”,
2017). However, according to the article ​“Lifting the Barrier in E-commerce in ASEAN”, ​retail sale
online in these countries only contain 1 percent globally (Olsen et al, n.d.). This can be implied that
they still have much to grow and more opportunities to be taken. Because of this reason, there are not
many players in the market yet compare to other big market like China. However, there is still
dominator in the ASEAN e-commerce market. For example, in Malaysia, as ranked in the article ​“Top
e-commerce sites in Malaysia”, ​Lazada is a dominator in e-commerce market. In addition, they also
appear in many other countries in ASEAN, such as, Indonesia, Philippines, Singapore, Thailand, and
Vietnam (“Top e-commerce sites”, 2017). Some big global players might have struggle with the
different perspective of ASEAN customer, for instance, the feeling of insecure payment or the internet
used for information gathering only. To be more specific, in Indonesia, according to Eddy Tamboto
and team, Indonesian mostly used their mobile device to find complementary information of the
product instead of buying it online (Tamboto et al, 2013). In this case, local firm might have
advantages on reaching the customers better as they get use to the culture.

In India, despite a high population, according to ​Statista, ​India has low percentage of active
e-commerce penetration in 2016 compare to other Asia Pacific countries (statista, 2017). However,
with the population of more than 1 billion people in the country, it can still be said that India has a
very big market and cannot be overlooked by top investors. As ranked by Sandeep Thakur, Flipkart is
the biggest e-commerce firm in India which also ranked in the top 10 in the world (Thakur, 2015). To
analyze, India has very similar e-commerce condition to ASEAN where the retail e-commerce is not
quite popular yet compare to the world. However, there are a lot opportunity for firm to capture due to
very big market which in some region might be equal to the size of a country in ASEAN. Moreover,
while in the ASEAN market, firms have to analyze the customer behaviour differently in each country,
it will be easier for them to just analyze Indian market because of the same nationality and similar
taste and preference.

In comparison, China has similar characteristic to India in size of the market but different on
the active penetration of e-commerce. According to the article ​The New China Playbook,​ the role of
e-commerce increases a lot which contain 42 percent of consumption growth (Kuo et al, 2015). The
main dominator in the market is Alibaba group with several site such as Alibaba.com and Taobao.
Chinese people tend to use mobile device to access the internet and shop online which sound great for
ecommerce companies. However it might be difficult for global firms to compete with Alibaba
because Chinese tend to support the local firm more as they may bring benefit to the whole country.
However, global company might be able to enter the market if they can represent the action of
dedication to China.

Brazil and Africa are very similar region where the growth of the e-commerce is low because
of the lack of supply. Brazil has faced the economic downturn leading to the reduction of mobile
consumption, the main channel that connect to the internet. According to Rafael Berti, the
consumption of mobile phone fell by 13.4 percent in 2015 (Berti, 2016). However, there is still big
firm like B2W digital that remain in the market. On the other hand, Africa has better ecommerce
condition. As stated in the article ​African Consumer Sentiment 2016 t​ hat the demand on internet usage
is still exist in the market with the lack of supply. Furthermore, the level of internet penetration in
many countries in Africa are the same as San Francisco and London (Foster et al, 2016). Big player
like Jumia, which ranked by Chicamod team that they are the leader in the market, has reponse very
well to the customer needs and behaviours (Chicamod, 2016). To be specific, African consumers have
trust issue with the online payment. Additionally, they also prefer to see and touch the products
physically. In response, Jumia also provide display and front store for these customers.

In order to compete with big players in the ecommerce market, the company should review
their strategic plan carefully. Firstly, they should have a deep market research that should focus on the
external factor. First type of external factor that they should concern is how well that region support
e-commerce, which might include the internet accessibility, channel that use to access the internet, law
toward e-commerce, potential region, such as, rural area in India that has positive trend of internet
user, transportation, online banking, and warehouse service. Then, the company should focus on the
customer behaviour toward e-commerce, some characteristics of customers might be obstacle for the
firm to overcome, for instance, African prefer to see and touch the product before purchase or many
customers in India use internet as the complementary information. Therefore, in the action plan, the
companies should consider internal factor that lead to how much they will have e-commerce involve
on their business. In the market like Africa, the firm might want to have front store with digital site for
customer to reach as customer believe in online payment security and also find a lot of information
online. On the other hand, in India, firm might penetrate to fully digital marketing with front store for
the customers as they believe in risk of online transaction and influenced hugely by online
information. Finally, this action plan should also consider the dominator of the market whether they
have capture all the market share or not. In some markets, these new firms can also use big players
unique activity as example to have an easier and faster enter of the market.
 References

​ etrieved from
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Allen, R. (2017). Top e-commerce trends to inform your 2017 marketing strategy. ​Smart insight.
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2017-marketing-strategy/

Berti, R. (2016). Top 20 and largest e-commerce websites in Brazil. ​DenmarkBrazil. ​Retrieved from
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Foster, J., Oikawa, T., Spanjaard, J., Huet, E., Kimani, M., Niavas, S. (2016). African consumer
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Kuo, Y., Walters, J., Wang, A., Yang, V., Yang, J., . . .Wan, H. (2015). The new China playbook:
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Olsen, G., Chua, G. S., Gergele, O., Bartolucci, F. (n.d.). Lifting the barrier to e-commerce in
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​ etrieved from
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​ etrieved from
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https://aseanup.com/top-e-commerce-sites-malaysia/