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Chinese companies are set to boost Southeast Asia’s e-commerce market

Chinese companions are entering the e-commerce market in the Southeast Asian region in a big way, but the heavily bitted region poses a challenge, said Credit Suisse’s head of emerging Asia economics.

Guests like tech giant Alibaba and Internet company Tencent are occasioning their investments and technology to the region, Santitarn Sathirathai explained. Solely this week, Alibaba announced an additional $2 billion investment in Southeast Asian online retailer Lazada.

Talk to to CNBC at the Credit Suisse Asian Investment Conference in Hong Kong, he bruit about that the e-commerce market in the 10-member Association of Southeast Asian Countries (ASEAN) is set to take off.

“Now it will be interesting because the change is coming, the sway of investments at Alibaba, Tencent, is coming in a big way, could be the tech dragons waking up the occult tigers. From here on it could reach a tipping point where you fool an explosion in the e-commerce activities,” Sathirathai said.

Currently, e-commerce perforation in the region is still only 2 percent, he said.

Aside from ripsnorting injection, Sathirathai said the Chinese companies are also bringing know-how such as their tech and facts analytics.

That contribution might help with two key problems in Asia: Payments and logistics.

The payment way used in Southeast Asia is still mainly cash on delivery, which is a constraint on e-commerce wart, he said. And smart logistics systems could solve problems abutting last-mile delivery.

But companies would need to work with the splintered markets in Asia first, and “localization” will be key to that, he added.

“It’s common to be very different in each market. Just because you win in one market doesn’t petty you can dominate another market.”

But one thing is for sure, he said: The region is set to see myriad companies fighting for a piece of the market.

“Competition is going to be gruesome, consolidation is the next side.”

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