Organiser: Selangor Information Technology and E-Commerce Council (SITEC)
Class: 3rd EC Class of 2015
Title: Customer Service (Chinese)
Date: 24 July 2015
Malaysia’s e-commerce development is preaching the third stage, whereby the local and international e-commerce platforms are heating up the competition environment by offering many types of promotion package to attract the retailers to subscribe for e-commerce, and this has created many opportunities for the businesses to enter e-commerce. However, many are still showing concerns and doubts, especially on issues such as e-commerce technicalities, promotion activities, counterfeits and overseas expansion.
With the invitation by Selangor Information Technology and E-commerce Committee (SITEC), experts and industry players from Lelong.my, Logon and Uitox Malaysia will attend the second e-commerce courses on July 24, to assist the retailers on their issues.
Domestic and overseas platforms are carrying out several types of promotions and offering out discounts to gain traffic in local market, and this turns out to be ‘subsidizing’ the merchants. To capture these sellers, platform providers are also providing their services for free to them. Despite this will benefits the merchants, but whether the platform can survive under this strategy is the concern of the merchants.
The oldest e-commerce in the nation, Lelong.my general manager Adrian Foong does not agree with the move by new platform providers to capture merchants through deeply discounted packages, as this will not cultivate their customer loyalties.
“This sort of ‘capital burning’ strategy is not a healthy sign for the industry. Though customers will be attracted by the providers that offers more discounts and promotion packages, this however will see the risk of them stop purchasing once they put a stop to the promotions, and this reflects that customer loyalties issue is not included in such strategy,” Foong comments.
“Although Lelong.my is sell at higher price, but we have many loyal customers, because they realize that the seller in Lelong.my is verified, buyers can always reach the sellers and the process of shopping is easy and convenient. This is the main reason why many platform providers are playing price war yet we are still standing tough,” he concludes.
At the same time, Lelong.my is one of the minorities that do not provide free set-up. Foong believes doing so will only cause financial damages and does not last long, ending up to require fees from merchants which may cause dissatisfaction.
“All these while we have been charging our retailers for the services provided, I think it is a win-win situation and we can also provide a better service for them from time to time,Malaysia’s Uitox nation manager William Lien sees the other side of the coin, whereby he believes e-commerce has its own unique rules, if there are more cost incurred as investment, higher returns is expected to come in the future.
“For example, there is well-known international player who is suffering losses, yet the company is expanding in size. These losses are in fact an investment, which sees them using the capital to conquer the market and increase more products offerings in the platforms and eventually dominating the market. If you spend RM50 mil today, you will have RM100 mil of profit in the future. Thus, this strategy will not make the players fail, but strengthen them. It is usual for the industry to use such strategy,”
Uitox is an e-commerce solution provider, offering several free services include e-commerce branding, “one day one website” fast website creation, professional e-commerce warehouse management, fast shipping logistic, as well as global cross border e-commerce services. Its headquarters is located in Taiwan while its foothold spreads across China, Singapore, Malaysia, Japan, Indonesia and Thailand.
Logon sales and business development manager Ken Lai says the company is looking into the effect from the strategy by ‘subsidizing’ merchants in using e-commerce.
Logon is the biggest Chinese e-commerce platform under Chinese Media group in the country, and it also initiated the concept of giving merchants free access to set up their own e-commerce in their website along with other promotional packages. But Lai says the company will still monitor its budget and cash flow, which indicates that the promotional activities will only go for certain period, but will still provide other form of support to the sellers.
The largest e-commerce worldwide DaoPao is struggling with counterfeits issue, while Malaysia is facing the similar issue and it has adversely affected the industry. Foong from Lelong.my says the company has been undertaking ‘cleansing’ process in its database, and bans all the replica goods in its platform. The process is almost completed over half a year ago.
He suggests that authorized resellers can display their certificate in product posting for consumers’ recognition. At the same time, sellers can also report any other replica goods selling activities to platform managers to take the necessary action.
Platform providers mostly are focusing on domestic market currently, but some merchants intend to expand overseas are hoping these providers to be able to provide such solution.
William Lein says Uitox provides cross border e-commerce services which bundling a certain numbers of products from sellers and duplicate and sell the products in overseas platform. Currently, the company consistently assists Taiwan’s retailers to sell their products in Malaysia with this strategy that transacted based on ringgit and products were shipped from Taiwan to Malaysia.
“ Though the products are imported from Taiwan into Malaysia, but buyers can make their complaints or other issues with Uitox local office. Likewise, if local retailers have the same request, the company will also bundles the products with certain quantities and brings them forward to Taiwan, Japan, China, Singapore, Thailand and Indonesia wherever Uitox has operation,” Lein adds.
Adrian Foong suggests that the easier way is to collaborate with E-bay which can allows one to bring their products worldwide. The only issue is that E-Bay does not provide logistic solution and retailers need to check if the import policy will brings impact on their earnings.