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Amazon Reaches for Millions in Southeast Asia's Cyberspace

by Associated Press

   SINGAPORE --

   Amazon is introducing express delivery to Singapore in its first direct
   effort to tap into surging online shopping in fast-growing Southeast
   Asia.

   The American e-commerce company announced Thursday it will begin
   operating a distribution facility bigger than a football field in the
   wealthy island nation. It promises to deliver tens of thousands of
   types of items within two hours for free, if customers spend at least
   40 Singapore dollars ($29.52).
   That's a step up from past international shipping options offered by
   Amazon, where items sometimes took weeks to arrive.
   Amazon is late to capitalize on the region's rising middle class. The
   biggest local competitor is Lazada, which is backed by Chinese giant
   Alibaba and launched in the region in 2012. It operates in Indonesia,
   Malaysia, Thailand, the Philippines, Vietnam and Singapore.
   Henry Low, the Asia Pacific director of Amazon Prime Now, said the
   company is keen to expand elsewhere in Southeast Asia, a market of more
   than 600 million people.
   "I'm super excited about future possibilities," Low said.
   The number of internet users in Southeast Asia is expected to rise from
   260 million now to 480 million by 2020, according to research by Google
   and state-owned investor Temasek Holdings. It forecasts that the value
   of e-commerce in the region will soar to 88 billion by 2025 from 5.5
   billion in 2015.
   "The offline-to-online shift will continue and we strongly believe in
   the great success of e-commerce [with] the rising middle class in many
   Southeast Asian markets,'' said Hanno Stegmann, chief executive of the
   Asia Pacific Internet Group, the Asian arm of Rocket Internet, which
   founded Lazada.
   As Amazon gears up in Singapore, Rocket Internet already is looking at
   other emerging markets. Its current focus is on Daraz, an e-commerce
   platform aimed at the 400 million people living in Myanmar, Pakistan
   and Bangladesh.
   Still, there's plenty of room for growth in Southeast Asia, where
   e-commerce accounts for only 2.6 percent of the retail market, said
   Sebastien Lamy, a partner at management consultancy Bain & Company.
   That's compared with 15 percent to 25 percent seen in the U.S. and
   China.
   Even if online commerce is just getting started, it's already having an
   impact in Singapore, whose glitzy malls are the backbone of the local
   economy and tourism.
   Mall vacancies along Orchard Road and in other areas are rising,
   abandoned by shoppers like Rahil Bhagat, a content producer.
   Rahil started buying video games and accessories online from the U.S.
   in 2009. Now, he makes 75 percent of his purchases, from car parts to
   quinoa, online.
   "Physical shopping has lost its appeal," he told the AP. "Even if I
   visited a brick-and-mortar store, I would be checking online to see if
   it's cheaper. It usually is."