BUSINESS here is much hullabaloo about the e-commerce boom in Southeast Asia, and whether this kills off brick-and-mortar retail- Ters. Some say yes, but others point to e-marketplace giants Amazon and Ali- baba establishing offline stores as an -in dicator that the brick-and-mortar retail experience is still king. But, talking to retailers, the picture that emerges is more nuanced: online and offline retail are a two-way street, and consumers are now traversing to and fro between both, just because they can. To understand the story of blurred lines and evolution, meet Stickerrific. Established in 2014, Stickerrific is both an online and offline business that sells specialty stationery, art tools, and E-commerce giants like Amazon are now establishing brick-and-mortar stores merchandise by local artists. But many like the Amazon Go Store in New York City. see the shop as more than a retail space. “It’s the happiest place on the planet,” errific’s social media pages, check prices But e-commerce is out of control in THE Southeast Asia. Just recently, the report writes Laila Zain, a customer who blogs or browse complementary items on its on Ninjahousewife.com. webstore, then come to the shop to get e-Conomy SEA 2019 by Google, Temasek For some customers, Stickerrific is a hands-on guidance from the staff, or just and Bain reveals that e-commerce in cocoon for creativity – its well-lit, win- to browse some more. Oh, and take self- the region – projected to be the world’s dowed interior and fluffy cats named ies with the store’s iconic paw-sonalities fourth largest economic bloc by 2030 – after Star Wars characters have inspired – Luke, Leia, Chewie and Han. has jumped seven times from US$5.5 bil- ON-OFF many artworks, quite often created by lion in 2015 to over US$38 billion in 2019. patrons at the tables of the shop itself. “The sector is on track to exceed For others, Stickerrific is a mecca for US$150 billion by 2025 – US$50 billion SWITCH more than predictions made over a year future “pilgrimages”, having seen it in Is online retail killing offline businesses, as popular sentiments paint it? the background of the many art-related Online and ago – on the back of stronger-than-an- Like most wars, the bigger picture is more complicated on the ground. video tutorials and cat-related shenani- ticipated growth,” states the report. gans snapshots posted on the shop’s so- offline retail are It adds that some 49 million people by LI-MEI FOONG cial media channels – a compulsion akin in Southeast Asia bought or sold items to people itching to fly to South Korea a two-way street, online in 2015. Today, that number has after a steady diet of K-drama. and consumers are tripled to 150 million people. And they “Many of our customers, especial- are not just fishing for deals on the latest ly those who live in other countries or now traversing to smartphones. They are also buying milk states, buy from our website. But the and make-up – basically, groceries and dream for them is to come to the shop and fro between beauty items that consumers once pre- one day,” says Szetoo Weiwen, who runs ferred to browse in-store. the shop in Petaling Jaya – a city about 30 both, just because Meanwhile, the brick-and-mortar minutes from Kuala Lumpur, the capi- they can. landscape is being bulldozed with news tal of Malaysia. A few would even inform of closures. In Malaysia, department her months in advance that they will be store operator Parkson Corp Sdn Bhd making a trip to the shop. closed its 20-year-old outlet in Suria While all its stock are available for KLCC earlier this year, and subsequently purchase online, Stickerrific makes most NO STRAIGHT ROAD AHEAD shut another store that has only operated of its sales in its physical outlet, accord- E-commerce transactions in Southeast for 18 months. Gap, Banana Republic and ing to Szetoo. Yet, she says, one cannot Asia have broken records – this state- American Eagle outlets went belly up in do without the other. ment itself is beginning to sound like a Singapore last year. Meanwhile, Hero The DNA of Stickerrific is a tight in- broken record. Every year, we get a var- Supermarket announced in January that tertwining of online and offline chan- iation of the same information from one it has closed 26 stores in Indonesia. nels. Customers watch how-to or of the region’s many online marketplac- A convenient conclusion would be PHOTOGRAPH: AFP. PHOTOGRAPH: unboxing videos of products on Stick- es or research firms. that consumers are ditching physi- 14 UNRESERVED UNRESERVEDMEDIA.COM DECEMBER 2019 DECEMBER 2019 UNRESERVEDMEDIA.COM UNRESERVED 15 BUSINESS the past year, while the retail industry is cupy more than 50% of the leased area,” to almost 30 billion in the same period attracted two in every three dollars also recording a 4% to 5% growth. says Chan. three years later. raised in Southeast Asia since 2016, ac- “Today, a more realistic view of the This trend is spilling over to e-com- “Such an enthusiastic approach cording to the report. retail industry is a convergence of the merce, it seems. to engagement is unique to Southeast Specifically, e-commerce has digital and physical worlds. I like to call Asian Internet users. In developed mar- brought US$9.9 billion worth of invest- it a ‘digi-cal’ world,” says Chan, who FROM RETAILING kets such as the US, Europe and Japan, ments into the region within that period. also sits as the advisor of both the Ma- TO ENTERTAINING frequent online buyers are less inter- Zalora is one contributor. “An ex- laysia Shopping Malls Association and According to the same report by Goog- ested in spending time online. There, ample of a significant impact we have the Council of Asian Shopping Centres. le, Temasek and Bain, Southeast Asian apps tend to focus on specific services, made in Malaysia would be the invest- “Technology should not be seen as a dis- e-commerce companies in 2015 were streamlining the user experience, min- ment of US$4 million in infrastructure abler, or replacing the brick-and-mor- mostly focusing on, well, e-com- imising the time it takes to select prod- through the establishment of our re- tar retail entirely, but an enabler that merce. But in 2019, these businesses ucts and making it simple for users to gional e-fulfilment hub in Selangor,” helps bring more business to us.” are branching out into offering adjacent submit orders,” it notes. says Daguimol. He observes that shoppers today in- services like streaming, gaming, news, The opposite is happening in South- He points out that Zalora’s next and tegrate online and offline platforms to travel, finance, and are even dabbling in east Asia – the more time consumers in biggest e-fulfilment hub is in the cards. make purchasing decisions. To him, the food delivery. the region spend on an e-commerce app, Slated to complete construction by the fact that consumers can now whip out “Leading companies in Southeast the more willing they are to fork out on it. first quarter of 2020 in Muntinlupa City, their phones in a mall to look for infor- Asia are developing new ways for people Working with App Annie to analyse Philippines, the facility is “expected to mation and reviews about a product ac- to spend more time on their apps, using the engagement in the region’s most provide at least 1,000 job opportunities Forever 21 filed for bankcruptcy im September this year and will close 200 stores tually encourages purchase in-store. anything from games and live-stream- popular e-commerce and ride hailing for the surrounding Muntinlupa-Cavite in order to streamline their business. Moreover, Chan says, social media ing videos to interactive content and in- apps, the report notes a significant cor- communities”. and digitalisation has opened up robust app messaging. The goal? To engage and relation between the time spent on apps As e-commerce players up their cal retail for e-commerce. Armchair brand communications at Zalora, one marketing channels for physical retail to anchor users to their platforms, with the and monetisation. game, the growing elephant in the room shopping is convenient and round- of Southeast Asia’s top online fashion reach more consumers. belief that engagement will eventually At the end of the day, a growing is whether this spells the beginning of the-clock, unaffected by parking con- marketplace. One example is the Sunway Pals mo- turn into orders,” says the report. e-commerce market bodes well for the the end for physical retail. ditions or Grab peak-hour surge rates. “Fashion e-tailers need to recognise bile app, chimes Phang Sau Lian, gen- And this works. The report found economy. E-commerce boosts affiliate The recent bankruptcy filing of fast With less overhead costs and opera- that their competitors are not just each eral manager of Sunway Velocity Mall. the number of sessions for e-commerce industries like logistics and packaging, fashion behemoth Forever 21 casts a spot- tional burden, online shops are often other but the offline players [as well],” The app offers exclusive promotions apps in Indonesia, for instance, leapt and is an investment magnet. In fact, light on this issue again. Linda Chang, able to offer a cheaper price – an im- says Daguimol. and deals to users and allow them to from 8 billion in the first half of 2016 e-commerce, along with ride hailing, executive vice president and eldest portant advantage in price-sensitive earn points for every purchase at Sun- daughter of the brand’s founding couple, Southeast Asia.