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Amazon Launches Prime Now In Singapore, Taking On Alibaba

Amazon Launches Prime Now In Singapore, Taking On Alibaba
Marking the e-commerce giant's biggest push into Southeast Asia and its first head-on battle with Chinese rival, Alibaba Group Holding, Inc launched its two-hour delivery service in Singapore.
Including Prime subscriptions which provide access to the company's video-streaming service, higher-end services had not been available, even while Amazon already delivered to Singapore. Everything from Tiger Balm ointment to eggs, hammer drills and Pampers nappies is now being promised to be delivered within two hours by the Prime Now Singapore app.
In India, where Amazon is the number-two player behind local rival Flipkart, the e-commerce giant has largely sidestepped China and focused on India in Asia. But hotly anticipated as a gateway to a Southeast Asian region of 600 million, where currently only a fraction of sales are conducted online, has been it’s arrival in Singapore, a tiny but wealthy city state of just over 5 million people.
Singapore’s shoppers rushed to download the app, which offers free delivery on orders of S$40 ($29.50) or more even though the country’s Singaporeans make a just fraction of total purchases online now. Amazon is waiving the membership requirement for now.
"Something with such quick delivery will be great," said Jeremy Khoo, a 50-year-old communications manager in Singapore, who said he would now shop for groceries from Amazon Prime Now.
Meanwhile preparing for a battle of titans in Singapore and beyond are industry executives.
In order to boost its stake to 83 percent last month, Alibaba spent an extra $1 billion in Southeast Asia-focused Lazada which it owns.
In a venture which includes ride-hailing app Uber, streaming service Netflix and local online grocer Redmart, which it owns, it launched subscription-based customer loyalty program LiveUp in Singapore in April, ahead of Amazon's arrival.
"Singapore will be a test bed," said Ajay Sunder, vice president of digital transformation at Frost and Sullivan.
"I would give Amazon another two quarters, they should be rolling out soon in Southeast Asia, at least the major cities."
From $16 billion in 2016, online product sales in Southeast Asia is forecast to grow to $71 billion by 2021 according to Frost.
Six markets in Southeast Asia: Singapore, Malaysia, Indonesia, the Philippines, Thailand and Vietnam, are the markets where Lazada has expanded since launching five years ago.
Lazada's range of merchants have been boosted and its logistics improved by Alibaba's investment besides financial support. With their longer experience of local customers, and with logistics and vendor systems, Lazada and Alibaba could already be ahead, said Xiaofeng Wang, a senior analyst at research firm Forrester.
She added that an inventory of U.S. products, deep pockets and technological nous are at Amazon’s disposal.
But since there are regulatory differences, language barriers and logistical hurdles like the huge number of islands that make up the Philippines, or Jakarta's paralyzing traffic, e-commerce in Asia, is not easy even while Southeast Asia may be the last big battleground for e-commerce in the continent. In many places card payments are rare and internet connections can be slow or non-existent.

Christopher J. Mitchell

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