Taiwan PChome's SEAsia online expansion with local partners sees early success

25, Nov. 2020

Image by Preis_King from Pixabay
Image by Preis_King from Pixabay

By Gloria Cho

TAIPEI, NNA - Taiwan’s largest e-commerce group PChome Online seems to have made the right move to expand in Southeast Asia in September to capitalize on the rising appetite for Taiwanese products.

After PChome SEA was launched to cater to consumers in Indonesia, Singapore, Malaysia and Vietnam, it organized its first 'Double-11' or Nov. 11 sale to much success.

The sales event, which is widely regarded as the world's busiest online shopping activity but with far more frenzy in Asia, saw the Taiwanese platform competing with formidable rivals such as Shopee and Lazada in Southeast Asia.

Yet, PChome was able to achieve some decent successes. Dangling attractive offers of discounts, free shipment, and coupons, its sites in five Southeast Asian countries have seen sales jumping by 1.5 to 9 times since October. They include its more established Thailand platform, which has a dedicated Taiwan zone.

Among the popular items snapped up by Southeast Asians are food products, cosmetics, household electrical appliances, and e-sport gaming PCs and peripherals, reported PChome.

The Southeast Asian online market, which has been enjoying an e-commerce boom fueled further by the coronavirus pandemic this year, is already dominated by marketplaces known for their huge capital and tons of lower-priced products sourced mainly from China.

Much smaller in scale, PChome had to compete using a different strategy. It capitalized on the popularity of quality Taiwanese products which have gained favor with more Southeast Asian consumers.

A joint report released by tech giant Google and the government-backed Taiwan External Trade Development Council in June showed that search queries on Google that were related to “Made in Taiwan” in Southeast Asian countries such as Malaysia, Singapore and Vietnam in 2019 had increased by over 15 percent from the year before.

Tai Fan-chen, Director General of International Digital Commerce Research Division of Commerce Development Research Institute, told NNA, "Taiwan products that come with reliable quality and affordable prices will meet the needs of middle-class consumers in Southeast Asia.”

In order to penetrate that enormous market quickly, PChome collaborated with major local online marketplaces and leveraged mutual strengths to reach out to potential buyers.

The local partners are Tiki in Vietnam; Youbeli in Malaysia; Blibli in Indonesia; and Qoo10 in Singapore. The Taiwanese company collaborated with Cal-Comp Electronics (Thailand) Public Co. to launch PChome Thai in 2016 after a trial run the year before.

PChome SEA is providing Taiwan sellers one-stop support services covering cross-border payment, logistics and localized marketing to help them grow in the new markets.

The iconic Taiwanese 3:15 milk tea brand is one of the enterprises that joined PChome SEA to tap the lucrative Southeast Asian market. Founded in 1990, the company noted that the region has fast-growing economies and a growing demand for milk tea from its young demographics, a 3:15 official told NNA.

In fact, several of its tea concoctions sold in ready-to-consume cartons are listed as best sellers on Singapore’s Qoo10.

Meanwhile, PChome's partners in Southeast Asia are looking forward to an influx of Taiwanese products as a result of their strategic partnership.

“The South East Asian e-commerce market has been thriving in recent years, and consumers are entitled to more diverse choices of products,” said Chairman Jan Hung-tze of PChome Online.

E-commerce is the fastest-growing online sector in Southeast Asia. This year, e-commerce gross merchandise volume (GMV) in the region will hit $62 billion, and is expected to reach $172 billion by 2025, according to e-Conomy SEA 2020 Report compiled jointly by Google, Singapore's Temasek, and Bain & Company consultancy.

Despite its initial success in Southeast Asia, PChome still has to tackle challenges such as ensuring integration of cross-border logistics and currency flow, as well as localizing marketing campaigns effectively in order to grow further.

“While PChome is seeking to build up and integrate cross-border logistics and currency flow, their larger rivals have already established a wide and complete network,” said Tai.

It might mean Taiwan companies have to join hands to overcome these issues regardless of their marketing approach for cross-border business in the region.

Taiwan's women apparel brand Queenshop that began to take online orders from Malaysian and Singaporean shoppers in 2019 has found it a challenge to shorten delivery time.

The two countries are the top two destinations for Taiwanese small-and-medium enterprises seeking expansion in Southeast Asia because they have Chinese communities sharing similar cultures as the Taiwanese, according to the report by Google and the trade body.

“Consumers there care much about when their packages will arrive, which poses a challenge for us as we currently have to ship all orders all the way from Taiwan,” a Queenshop official told NNA.

Apart from logistics headaches, customizing marketing materials to meet local desires is another requisite for Taiwanese businesses.

“We constantly observe and learn from the practices and marketing style used by local e-commerce operators in order to woo consumers more efficiently,” she said.

Recognizing the importance of going local, 3:15 milk tea managed to make inroads in its target Vietnam market by collaborating with local influencers and advertising online.

“We will apply the successful model to other countries in the region,” said a 3:15 official.

PChome Online, which has operated in Taiwan for more than 20 years, offers over five million items on its platform. It has reported sales of NT$34.4 billion ($1.21 billion) so far this year, or a strong 12.8 percent growth from a year ago.