Why doesn’t a brand build its own offline distribution? It’s too expensive and actually not in its interest. Better to build the branding and marketing, and have good products. Similarly, building online capabilities is very expensive and requires a big team, with graphic designers, content producers, online store managers, customer service, and account managers. For brands, it often makes more sense to outsource these functions to an e-commerce enabler.

A Closer Look at E-Commerce Enablers

Many large brands are good at selling offline through their partners but don’t understand e-commerce. It’s a hard landscape for them to navigate in terms of figuring out the best e-commerce channels, marketing, and go-to-market strategy. Enablers have expertise in all these areas.

Here are the services that enablers provide, which brands could sign up for in a package or individually:

• Strategic consulting: Helping a brand enter a market or helping them devise their online go-to-market strategy.
• Content production: These include photo services and creating rich product descriptions, infographics, and videos.
• E-store management: Creating the store; managing it; checking on pricing, promotions, and inventory; and order processing.
• Supply chain management: Forecasting inventory to ensure there are no gaps in inventory.
• Fulfillment logistics: Most of the time enablers don’t own this anymore. Some may keep stock in fulfillment centers so that they can manage orders for multiple online channels.
• Delivery: While delivery is handled through third-party logistics companies, what an enabler does is facilitate order processing and ensure there are no mistakes, so consumers receive packages on time. There are add-ons such as analytics and business intelligence.
• Data analysis: Enablers can look at data to figure out issues such as why a brand’s keyword ranking went down or provide insights in terms of item bundles.
• Discovering new product opportunities: Enablers look at data and come up with new product strategies, smaller sizing, bigger sizing, or special bundle sets for online customers based on demand forecasts.
• Customer service: Answering chats through multiple channels, whether it’s marketplaces, social media channels, or brand websites; software platforms are able to manage and track all that data.

The Origins of Enablers

The e-commerce enabler business model started mostly in China, where it was hard for brands to sell in all the country’s big marketplaces because of language and culture differences. At the peak, there were more than 4,000 e-commerce enablers in China alone.

Most enablers in the U.S. started as software platforms. Why? Amazon is so dominant. There aren’t that many other marketplaces. Hence, enablers became specific service providers, whether it’s about analytics, targeting, marketing, or keyword ranking. It eventually evolved to become more of an agency service. Southeast Asia is more in line with China because there’s a lot more fragmentation there.

Enablers can be placed into four buckets:

• What is the size of the client, such as providing services for large brands or SMEs?
• Are they a full-service solution provider — like all the big enablers, such as aCommerce, Jet Commerce, N-Squared, or smaller enablers that are more service oriented?
• Does the enabler own a multichannel platform? When an enabler leverages a third-party solution, they are less flexible.
• Is an enabler an e-distributor, meaning they take on inventory, versus being a pure service provider?

The e-commerce enablers space will continue to grow because each enabler has developed deep expertise in things that brands are not very good at, such as managing software and online stores and analyzing data.

Challenges in Southeast Asia

Enablers competing in Southeast Asia face many challenges because the market is still fragmented, with multiple e-commerce marketplaces. For example, in Indonesia you have Lazada, Shopee, Tokopedia, Bukalapak, and JD. There are different channels that a brand needs to balance through.

Many Chinese e-commerce enablers that enter the Southeast Asia market haven’t been very successful. They face challenges in terms of different cultures and languages, and the size of the market. Most e-commerce enablers that were interested in the Southeast Asian market feel it’s a bit early for them to come in. Each country is unique. People underestimate the different cultures, talent, marketplaces, and tech. For example, a lot of the APIs for one country may be slightly different in another. This is why it won’t be easy for future enablers to come in and compete. Already, each market is dominated by a different enabler.

The Growth of the Enabler Market

Overall, the enabler market is exciting and fast growing. Other e-commerce enablers are coming to this space, but not many new ones. Marketing agencies are trying to enter the enabler space, but they’re doing that as more of a defensive stance. Enablers are eating away their digital marketing business, hence they’re trying to go down the chain. They won’t be able to take a lot of it because the expertise, talent, tech, and operation capability is different. When you’re running an enabler business, you’re essentially running three or four companies combined.

There will be category champions, country champions, and regional champions, but Southeast Asia is not a winner-take-all market. The big players will continually get bigger, but others can and will survive in their own niche.

---

About JC Chen

JC Chen, based in Thailand, is currently CEO of a social commerce start-up. Prior to this he was regional commercial director at aCommerce, an end-to-end e-commerce solution provider in Southeast Asia. In this position, he handles the business development in the whole region, oversees partnership exploration, and works with countries to help their clients’ expansion. Before this, he was Head of Business Development and CFO at Jaymart, a leading mobile retailer in Thailand and Myanmar that helps to connect consumers with gadgets and electronics. He started his career as an Account Manager for Israel and Turkey at Advantech in July 2011, before he moved to Hello by MK as the Sales and Finance Director.

---

This e-commerce industry article was adapted from the GLG Roundtable “Deep Dive into Southeast Asia’s E-Commerce Enablers Market.” If you would like access to events like this or would like to speak with e-commerce industry experts JC Chen or any of our approximately 1 million industry experts, please contact us.