Southeast Asia, an energetic nexus of cultures and economies, is rapidly writing its success story in the eCommerce realm since the internet economy size across Southeast Asia was forecasted to reach $1 trillion by 2030, as tens of millions more people take up online shopping and embrace food delivery. With a rapidly transforming landscape, Southeast Asia has emerged as the new frontier with its diverse markets, tech-savvy consumers, and burgeoning opportunities. Yet, what does it take to thrive in this dynamic space? 

This month, we interviewed Baozun Asia’s Vice-President, Victor Liu. Victor, a veteran with 15 years of eCommerce expertise. He sheds light on the company's unique adaptive strategies, their tech-driven approach, and visions of an experiential future in digital retail. From understanding the region's consumer behaviours to leveraging AI-driven marketing campaigns, dive into this conversation to discover the heartbeat of digital retail in Southeast Asia.

1. How have you observed the evolution of the eCommerce industry in Southeast Asia, particularly post-COVID? How has supply chain transformations and digital payment enhancements shaped this landscape?
Victor: Travelling across Southeast Asia, the growth rate of eCommerce pre-COVID was about 20-25% YoY. Post-COVID, there was a slight decline, but it remains robust at 10-15%. The integration of logistics, digital payments, and online shopping has become tighter, with the supply chain experiencing significant changes. 
Companies like Cainiao are establishing hubs within Southeast Asia instead of relying heavily on imports from China. The rise of eWallets in regions with limited traditional banking is revolutionising commerce, paralleling what we saw in China with Alipay.

2. In such a fragmented market as Southeast Asia, how does Baozun adapt its strategies to the region?
Victor: Baozun believes in a localisation strategy in Southeast Asia. Our strategy incorporates hiring local talent and understanding country-specific consumer nuances. We leverage regional hubs and our experience in China, adapting and learning from our Chinese model. Balancing local knowledge with regional expertise enables us to cater to each market's needs.
In the coming year, we will be focusing on developing the markets and capabilities in  Singapore, Malaysia, Thailand, and Indonesia. We aim to align with the domestic market needs and tap on its immense growth potential for brands and retailers.

3. How is live streaming and the surge in content creation influencing brand strategy, especially on platforms like WeChat and TikTok?
Victor: Live streaming is now foundational for most platforms. With this shift, the focus on high-quality content has never been more crucial. Technology is an enabler, but brands must ask fundamental questions about their propositions and products. Baozun is transitioning from an eCommerce enabler to a brand partner, emphasising on the role of content in the future.

4. As Baozun expands into markets like Southeast Asia, how are you adapting and customising offerings for these diverse markets?
Victor: While we have many use cases from China, sometimes our BOCDOP (Baozun Omnichannel Digital Operation Platform) system may be too advanced for other markets. We're making our offerings modular and localised. This includes offering flexible SaaS solutions for smaller clients, integrating with third-party platforms, and understanding local regulations. 
Our collaboration with Branded Lifestyle Asia across various markets signifies our commitment to refining brand positioning and tackling challenges collectively.

5. Considering Baozun's strategy of acquiring brands to increase their partnership and creative stake, will Baozun continue on this trajectory?
Victor: Baozun is technology-driven and prioritises brand partnerships. Our core business units cater to different aspects of a brand’s growth. Baozun eCommerce focuses on developing our omnichannel retail abilities with our clientele.

On the other hand, Baozun Brand Management engages with brand acquisition to develop a brand holistically to ensure that the products and services are in line with the needs of the target market. Furthermore, we partner with exclusive distributors to support localised delivery and logistics needs. With a balanced approach, we intend to expand our brand portfolio and leverage our digital commerce capabilities to be set apart.

6. With China's shift towards digital commerce, what are the challenges for brands to ensure a consistent consumer journey across online and offline platforms?
Victor: Brands in China are striving for a seamless consumer experience. A major challenge is managing product information, integrating stock across various channels, and maintaining consistent membership data. 
There's often reluctance to share data between platforms, necessitating industry-wide collaboration. The convergence of online and offline experiences. As observed with brands like Brompton, it emphasises on the move towards a more community-driven approach rather than transactional interactions.

7. For Chinese brands aiming to penetrate the Southeast Asian market, what challenges and strategies can they anticipate to face?
Victor: Many Chinese brands grapple with unfamiliar regulations, political dynamics, and ensuring a cultural fit in Southeast Asia. Powerhouses in China can face branding challenges in Singapore. It's essential to recalibrate narratives and adapt products culturally without coming off too much of a hardsell. 
Our advice. Brands should view each Southeast Asian nation distinctly, strategising optimal entry points and product assortments; it's not about selling, it's about resonating. While data accessibility in Southeast Asia isn't as extensive as in China, Baozun can offer marketing insights and partnership in crafting go-to-market strategies. 

Baozun Asia is the leading eCommerce business partner in China, with more than 15 years of experience empowering businesses and brands to reach beyond borders. We are now headquartered in Singapore, with regional offices in Southeast Asia. Discover how an unified commerce platform can transform retail and fuel sustainable growth. Drop an inquiry with our specialists here or connect with Victor on LinkedIn.