Jet Commerce's Growth in E-commerce in Southeast Asia

Mar 22,2022

For players on the track of overseas agent operations and services of brands, after finding the ability items that can quickly be replicated and applied, how to build a real competitive barrier determines how far they can run in the end.

It entered China in March last year, and reached an average daily order volume of more than 20 million by January this year; after spending 6.8 billion on the acquisition of Best Express on the eve of Double 11, it successfully entered the first echelon of China's express delivery industry with a market share of about 15%; recently it is also reported that a new financing of 2.5 billion US dollars has been completed, and the valuation has reached 20 billion US dollars... In the past year or so, J&T Express, a courier brand from Southeast Asia, has been fast gaining momentum to break through the fortress built by other express giants in the Chinese market.

When everyone was still amazed at the high speed of this dark horse on the express delivery industry, it started another game of chess: trying to get involved in the cross-border E-commerce brand operation service industry through investment or deep binding. And Jet Commerce, a company that also started in Southeast Asia, seems to be the spearhead in this new game.

Ebrun was informed that Jet Commerce, established in Indonesia in 2017, covered five Southeast Asian countries in only two years, and has now set up its global headquarters in Hangzhou, embarking on a journey to serve Chinese brands going overseas.


E-commerce in Southeast Asia is in the ascendant | Brand players are entering the game

Southeast Asia is recognized by the industry as the "market of tomorrow" with the fastest growing Internet economy.

In November this year, a new report jointly released by Google, Temasek and Bain Consulting showed that in 2021, there will be 40 million new Internet users in Southeast Asia, and the total number will exceed 440 million. E-commerce is an important engine to promote the consumption of the Internet economy in Southeast Asia. In 2021, the scale of E-commerce in Southeast Asia is expected to reach US$120 billion, and it is expected to reach US$234 billion by 2025. This figure has been raised by about 36% compared with the forecast of US$172 billion in 2020, and the market potential is greater than expected.

The fast-growing E-commerce market in Southeast Asia has long been an important battlefield for many Internet giants and start-ups to go overseas. The two largest E-commerce platforms in Southeast Asia, Shopee and Lazada, have Chinese Internet companies behind them. Tencent is the largest shareholder of Shopee's parent company, SEA Group, and Alibaba has gradually controlled Lazada from 2016 to 2018. In 2017, J&T Express, which was established not long ago in Indonesia, also initially formed an E-commerce express strategy. At the same time, Jet Commerce, which is positioned as an E-commerce brand operation service company, also officially started.

According to Ebrun, Jet Commerce has a very close relationship with J&T Express. Its founder, Oliver Yang, was the regional partner of J&T Express in Jakarta, Indonesia. The first brand served by Jet Commerce was OPPO Indonesia, and J&T Express founder Li Jie was the CEO of OPPO Indonesia at the time. In addition, the strategic layout of Jet Commerce and the pace of penetration of J&T Express have shown a certain degree of consistency in the Southeast Asian market.

In 2017, the Southeast Asian E-commerce market grew rapidly, but there was basically no "brand experience" at all. A typical problem is that online shopping has no advantages. It is not cheaper or more convenient than offline shopping. Not only does express delivery fail to guarantee the timeliness, but the packaging is also very simple and crude. Often "mobile phones are packaged in black shabby plastic bags", which makes consumers unable to have a sense of trust in online shopping.

At that time, although OPPO was one of the largest offline 3C brands in Indonesia, it was still struggling to deploy the online market in the face of backward infrastructure and lack of professional operation teams.

The in-depth cooperation with Jet Commerce and J&T Express has become an important turning point for OPPO's online business in Indonesia.

First of all, in terms of brand marketing and operation, Jet Commerce selects products in a targeted manner according to the user portraits of different platforms, and formulates differentiated advertising strategies according to different platform rules; what's more, in terms of user experience, from customer service, packaging, logistics and other aspects, the OPPO flagship store has been fully upgraded. For example, we customize the packaging box with the brand logo for the product to make the express package more textured, and at the same time use the logistics resources of J&T Express in Indonesia to ensure the timeliness and service experience.

In just a few months, OPPO Indonesia's online monthly sales have soared from 30 units at the beginning to 3,000 units. And this has become a classic case of the Indonesian E-commerce service industry at that time.

Since then, Jet Commerce has continuously promoted several brands to become the category TOP players of local E-commerce platforms. Internationally renowned brands including Shiseido, DJI and Nivea have successively cooperated with Jet Commerce to expand the online market in Southeast Asia.

It is worth mentioning that with the rise of E-commerce in Southeast Asia, Chinese brand merchants are increasingly appearing on platforms such as Shopee and Lazada. Take the merchants served by Jet Commerce as an example: last year's Double 11, DJI's online sales in the Philippines increased by more than 2,400% year-on-year, ranking first in the category, and sales exceeded one million US dollars in just half a year; this year's Double 11, Realme won the the third place in the Shopee category. The strength of Chinese brand merchants should not be underestimated.

Ebrun has learned that at present, Jet Commerce has served a number of domestic brands such as DJI, Realme, Joyoung, and Three Squirrels, and many new consumer brands represented by Yuan Qi Sen Lin and Perfect Diary have also talked with Jet Commerce for many times.


Behind the branding tide, service providers come to the front

The battle in E-commerce platform in Southeast Asia is in full swing, and the demand for brands from Southeast Asian consumers is also growing.

Official data shows that during the Double 12 promotion this year, the number of visits to the Shopee platform surged by 6 times compared to weekdays, and the overall order volume of the Shopee Mall, the brand mall has increased by 14 times compared to weekdays. This year's Double 11 promotion, Lazada attracted a total of about 800,000 brands and merchants to participate, doubling year-on-year, and the LazMall brand mall's all-day sales increased 10 times compared to weekdays. The surge in platform traffic is like an invisible hand, driving the brands to continue to move forward and continue to go out.

As a senior expert in cross-border E-commerce industry said, "this is a good time for Chinese brands to go overseas and for cross-border E-commerce companies to develop their branding efforts." Facing the Southeast Asian market, the growth rate of non-brand products going overseas is expected to be lower than brand products. Chinese brands going overseas are also developing from low-end to mid-end.

However, the development level of the Southeast Asian E-commerce market is far less than that of China, and many common playing methods in the Chinese market cannot be directly copied and pasted. From market research, to familiarity with platform rules, to the establishment of service systems, it is difficult for brand merchants to take into account the entire process of E-commerce operations. Therefore, the E-commerce service market in Southeast Asia has experienced rapid growth, and it is increasingly emphasizing transformation from pure product sales to brand services.

First of all, merchants pay more attention to achieving the win-win effect of brand volume and sales through digital marketing; besides, with the change of online traffic entry in Southeast Asia (such as the advertisement in the form of short video content, the rise of live streaming, etc. In addition to social media platforms represented by TikTok have opened up the road to commercialization, E-commerce platforms such as Shopee and Lazada are also pushing for selling products via live streaming), merchants need differentiated channel expansion strategies. This undoubtedly puts forward higher requirements for E-commerce operators, and also provides new development space.

In fact, since 2013, the E-commerce agency operation industry in Southeast Asia has gradually emerged. For example, aCommerce in Thailand and Sirclo in Indonesia were established in 2013, and SCI, headquartered in Singapore, was established in 2014.

However, it was only in the past two years that the industry began to see intensive financing: SCI raised RMB 440 million in 2021, Sirclo raised US$ 36 million, and aCommerce has raised a total of US$ 120 million and is seeking to list in Thailand recently. The capital market is increasingly favoring service providers in Southeast Asia.

Although it seems to be backed by J&T Express, Jet Commerce has never disclosed any financing. As a rising star with a good reputation in the industry, since its establishment in 2017, Jet Commerce has served hundreds of brands in 5 major categories (3C electronics, mother and baby, beauty and personal care, home life, food and health care), and operates more than 320 official flagship stores. In terms of market coverage, it has the full-regional certification of the dual platforms of Shopee and Lazada. In addition to the six Southeast Asian countries, it is also following the footsteps of Shopee to develop markets in emerging countries such as Brazil and Mexico.

"Although there are many players, at this stage, there is no obvious leading company in the E-commerce agency operation industry in Southeast Asia, which means that whoever can cover more markets and attract more high-quality brands can gain an advantage in the competition.” An industry insider who has been concerned about the Southeast Asian E-commerce market for many years commented.


Is localization the breaking point to win the Southeast Asian market?

The "involution" of the Chinese market is one of the reasons why a large number of brand owners choose to go overseas to find new growth in the past two years. Southeast Asia has become a hot emerging market due to its geographical location, favorable policies, demographic dividend, and high penetration of social media.

Not only brand owners from the Chinese market venture to the world market, but also many cross-border sellers who used to focus on the European and American markets through platforms such as Amazon and eBay have also begun to expand their presence in the Southeast Asian market.

But the complexity of the Southeast Asian market cannot be ignored. It is a diversified market composed of many countries and languages, and the economic policies, humanistic beliefs and other aspects of each country are different. This decentralized state makes it difficult to release the potential of E-commerce quickly. As a merchant in Southeast Asia said: "every time you open up a new national market, you have to start all over again." In addition, merchants are also faced with low unit prices, slow logistics and high cost, consumers lacking trust in E-commerce and other issues.

"Localization", a word that appears frequently in the cross-border E-commerce industry, has become the key to breaking the situation. If you want to ask why Jet Commerce is able to "move behind" in the E-commerce industry in Southeast Asia, the answer is also here.

It is reported that Jet Commerce adopts the combination of "Chinese core team + local operation team". The Chinese core team accurately grasps the core value of the brand, and the local operation team analyzes the shopping habits and consumption preferences of the local population, combined with local partners and business ecological resources, so as to better meet the market demand. At present, among the more than 1,300 employees of Jet Commerce, local employees account for 80%, and there are branches in each country, which can provide localized services for the entire region. This is a major advantage that distinguishes it from other E-commerce brand operators.

At the same time, Jet Commerce also superimposes "one-stop service" on top of localized operations, including all the needs of the whole process of going overseas: strategy consulting, category selection, product import and export qualifications, store operation, digital marketing, warehousing logistics, customer service, technical support, etc. And differentiated landing strategies can be formulated according to the different demands of the brand.

In terms of regional collaboration, Jet Commerce proposed the concept of "one-click coverage". Merchants can use Jet Commerce to fully gain a firm foothold in the 6 major countries in Southeast Asia without having to find different service providers in different countries.

That is to say, Jet Commerce uses the combination of "localization + one-stop service + regional synergy" to solve the three major demands of merchants in the process of going overseas to Southeast Asia: reducing information asymmetry, improving operational efficiency, and solving management issues of multinational company with low cost and high efficiency. Besides, it carries out market input adjustment and product adaptation according to different countries.

Numerous business cases have confirmed the correctness of the "formula" of the Jet Commerce to help brand go overseas. For example, Jet Commerce achieves precise marketing through digital membership and digital media delivery. This year, it helped Gaabor, a home appliance brand that has just entered the Southeast Asian market, to achieve the top three online sales in multiple countries in just two months. In just one year of operation, Jet Commerce has helped Y.O.U, an emerging brand, enter Indonesia's makeup and skin care category from the scratch, and create a number of phenomenal products that sell first in the entire network in Southeast Asia.

With the increasing demand for cross-border E-commerce going overseas, the number of Chinese brands served by Jet Commerce continues to increase, and the team frequently travels to and from the world for business negotiations. In order to further improve the efficiency of serving customers in the Chinese market, in 2020, Jet Commerce will return to China to set up its global headquarters and start a new round of business upgrades.

For players on the track of overseas agent operations and services of brands, after finding the ability items that can quickly be replicated and applied, how to build a real competitive barrier determines how far they can run in the end.

Different from other players, Jet Commerce does not regard itself as an "agent operation company", but is positioned as a "brand service provider" with extended core values. "It can be more involved in the management of the whole life cycle of the brand and the formulation of comprehensive strategies." A senior expert in the E-commerce service industry commented, "In the future, it will gradually realize the diversification of service capabilities and business models, and the service can even be extended to brand incubation, so there is a lot of room for imagination.”

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