Red tape holding back growth in regional e-commerce
CROSS-BORDER E-commerce is growing substantially in Southeast Asia, but regulations serve as a major bottleneck to its current development, business players say.
Singapore-based e-commerce enabling software platform Anchanto, which works with e-commerce platforms across the region including in Indonesia, acknowledges that regional e-commerce is significantly outpacing domestic e-commerce despite numerous factors affecting international transactions. Anchanto chief executive officer and co-founder Vaibhav Dabhade noted that the main driver behind the surge in regional e-commerce came from logistics companies and telecommunications operators providing Internet access.
“Simply put, the point is for logistics companies to make their services more affordable and for telecom operators to strengthen their services, and from there, the market develops,” he told the 2017 Asia E-Commerce Dialogue in Singapore on Tuesday.
By nature, he added, different countries employed different price variables in terms of shipping, customs and tariffs, while also being held up by large amounts of red tape, one of the reasons domestic e-commerce growth had been stifled in some places.
Dabhade pointed out that for regional players, partnerships with local companies would be necessary to succeed in a particular country, as demonstrated by the practice of multinational companies.
“Every logistics company has its own procedures, and it takes time to negotiate [through] difficult bureaucracies seen in countries like India and Indonesia, where at times regulations are too long and too vague,” he said, referring to an apparent e-commerce law in India that prohibits international companies from selling goods directly to the consumer, and instead demands that transactions be carried out through Indian companies.
In terms of the Asean Economic Community, Dabhade also said there were no specific transnational procedures that had officially taken place, as all countries tended to stick to their |normal procedures, thereby defeating the point of the community in the first place.
As for the Indonesian e-commerce industry, cross-border transactions may be helped by an upcoming regulation that would make international |purchases under US$100 become duty free, lowered from the previous threshold of $50.
