In this article

Disclaimer: Opinions expressed below belong solely to the author.

To say that American tech giant Amazon has quite the reputation in the world of e-commerce is a bit of an understatement. 

Since its founding in 1994 as an online marketplace for books, it has since grown to be a tech giant, even becoming one of the FAANG stocks that many investors look to as an indication of the tech industry’s health. 

For a company that started out in a garage, it has certainly come quite a long way — constantly breaking into and disrupting industries, and now shipping goods all over the world.

Today, Amazon’s subsidiaries include Amazon Web Services for cloud computing, streaming platform Twitch, and physical retailer Whole Foods Market.

If one company in e-commerce can achieve so much, what’s to say about the e-commerce companies in Southeast Asia?

After all, the region has no shortage of e-commerce companies, with the likes of Shopee, Lazada, Carousell, Qoo10, and many others. However, will any of these companies ever achieve Amazon’s success?

How far has Amazon come, and how far will it go?

E-commerce in Singapore and Southeast Asia is on the rise. Platforms like Lazada and Shopee have seen continued increases in users and visits, and even social media platforms like TikTok are jumping onboard the bandwagon and integrating e-commerce features into their platform.

Top e-commerce platforms in SEA
Top e-commerce platforms in SEA / Image Credit: J&T Express

Noticeably, however, Amazon is not within the top few e-commerce platforms in Singapore.

So before we ask how far Amazon will go, we should probably ask why Amazon has not managed to succeed in the Southeast Asia (SEA) market. After all, if Amazon is so good at disrupting other industries, why has it not disrupted this one?

To be fair, Amazon does have partnerships in the region. It launched a public sector startup ramp program in SEA last year under its subsidiary Amazon Web Services, and is currently working with Singapore’s Office for Space Technology and Industry to develop Singapore’s space industry. They have also brought Amazon Prime Video to Singapore and Indonesia.

But these are not partnerships for e-commerce operations, and whatever operations their e-commerce arm has in Singapore have not made Amazon dominant.

This raises the questions: why has Amazon found success for its e-commerce operations elsewhere, but not here? What is their secret to success, and why does it not apply here?

The secret, apparently, is monopsony. Many of us have heard of monopolies — when companies are the only producer of a certain good, they are a monopoly. But Amazon hopes to become a monopsony, which is when a company is the only buyer of a certain good. 

Amazon is so dominant in the global e-commerce space because they have managed to create a similar situation. Businesses who want to sell their products online, and list their products through an e-commerce platform often have no choice but to list on their platform.

In this way, Amazon positions itself as an unavoidable middleman, providing vendors access to customers, and positioning itself as the natural choice for anyone buying anything online.

amazon supermarket
Image Credit: The New York Times

But Amazon’s dominance in the e-commerce space also means that they have significant power over their sellers, and their business practices of bullying partners and vendors on their site has come under close scrutiny. According to investigations, misuse of third-party data, sustained predatory pricing, strong arming vendors, and similar practices are commonplace.

This is linked to its repeated successes in new ventures. Amazon uses revenue from profitable parts of its business in order to fund less profitable ventures, and allows these new ventures to overcome any barriers to entry and eliminate competition.

And herein lies the difference between Amazon and regional e-commerce players, and why e-commerce sites in SEA are different from Amazon.

No place for monopolies, or monopsonies

Amazon’s anti-competitive tactics are not welcome in Singapore. In 2021, Minister Chan Chun Sing mentioned that “the Government and industry players like Amazon are committed to supporting talent development to maximise businesses’ returns from e-commerce ventures”.

Instead of bullying and strong-arming vendors, the government hopes to help vendors succeed. E-commerce, at least for the Singapore government, should have benefits for both the platform and the vendors that use these platforms. 

As such, Southeast Asian e-commerce sites genuinely help vendors to succeed, instead of bullying them to gain more revenue.

For one, Shopee has consistently expanded their seller initiatives in an effort to help vendors garner more sales. In 2020, Shopee held a masterclass to provide tips for vendors on how to better engage customers during livestreams and in 2021, Shopee kicked off Shopee Pros to encourage knowledge-sharing between sellers and enable them to share best practices amongst themselves.

Earlier this year, the company even partnered with Meta to launch Facebook Ads on its seller platform, to further the reach of their sellers on social media platforms.

And lest we believe that Shopee is the exception rather than the norm, Alibaba-backed Lazada has also announced its fair share of seller initiatives to resolve pain points for vendors on their site, including campaigns to help vendors boost their brand image and engage customers, and partnerships with tech companies to strengthen online presence for vendors.

Most prominently, however, is Carousell. The company recently partnered with Ox Street and Refash to enhance their offerings. On top of this, the company takes notes of which sellers do well, and instead of bullying them, gives them the Caroupreneur Award.

Caroupreneur Awards
Caroupreneur Awards / Image Credit: Carousell

As market leader in recommerce, we have been single-mindedly tearing down the barriers that consumers might have when approaching secondhand. When speaking to our community, we’ve learnt that many don’t have the time to sell. Our focus is now primarily on creating a seamless, convenient and trusted experience for both sellers and buyers.

– Ng Chee Soon, managing director, Carousell Singapore

The difference between how local e-commerce platforms treat their vendors and how Amazon treats theirs goes a long way towards explaining why Amazon’s e-commerce arm is not among the top competitors in Singapore.

After all, if vendors gain more from local e-commerce sites, why should they choose to sell on Amazon, especially if Amazon is not keen on helping them?

Put simply, Amazon cannot afford to treat vendors in Southeast Asia the same way that it treats vendors elsewhere — simply because there is no space for them to do so.

Local solutions, for local needs, by local platforms

Amazon can fail to attract vendors in SEA, but what about customers?

After all, Amazon does ship to Singapore and Southeast Asia, so what is stopping consumers from going to Amazon for their online shopping needs? Are other e-commerce sites offering anything different when compared to Amazon?

As it turns out, e-commerce platforms in SEA have adapted to the needs of local consumers, and platforms are combining online shopping with entertainment to give consumers ‘shoppertainment’.

According to research by social media platform TikTok and Boston Consulting Group, shoppertainment could uncover US$1 trillion in market value for brands in the Asia Pacific region by 2025.

Since shoppertainment focuses on entertainment and education for consumers, consumers are receptive to it. As Sam Singh, Vice President of Global Business Solutions in APAC for TikTok, puts it, “Nobody wants to be sold to, but everyone will say yes to being entertained”.

infographic on the importance of Shoppertainment
The importance of shoppertainment / Image Credit TikTok, Boston Consulting Group

Shoppertainment is actually the key offering for TikTok’s e-commerce feature, TikTok Shop, which allows sellers to livestream products, and offers consumers live shopping where they can buy what content creators are reviewing or using.

Lazada and Shopee also offer livestreaming features, with sellers and brands that have participated in ShopeeLive reporting sales increases by up to 75 per cent.

On top of using shoppertainment to their advantage, local platforms have also been adapting to local circumstances. E-commerce in Singapore is not just business-to-consumer (B2C) — the rise of Carousell has created an e-commerce marketplace that is now C2C as well. 

As e-commerce grows and people buy more things, they often end up with things they don’t use as often. But instead of buying new and throwing with e-commerce, Carousell allows for recommerce instead. There is a growing appetite for recommerce in SEA.

More urgently, there is a looming environmental need to shift to circular modes of consumption. Fashion and Electronics are two of Carousell’s universally largest categories as well as some of the most unsustainably consumed products across the region.

– Ng Chee Soon, managing director, Carousell Singapore

This new adaptation of the old e-commerce model of only B2C to Carousell’s new C2C model has led to Carousell becoming one of the stars of e-commerce in Singapore and SEA. The platform claims one of the largest user bases, with one in three Singaporeans using the app every month.

By contrast, Amazon seems to have missed the boat on such features for sellers to gain access to customers — at least for SEA.

Amazon shoppers and vendors in SEA have no access to Amazon’s live streaming platform Amazon Live, and what small platform they have is small when compared to what Southeast Asian e-commerce platforms have built. After all, for all the products that Amazon has to offer, Amazon Live garners less than a thousand active viewers on a regular day

With these developments, it would really be more surprising if Amazon was dominant, rather than if it was not. After all, Amazon has built up a bad rep among vendors, and failed to properly integrate up and coming trends in the e-commerce space. 

Instead of asking why Amazon has not managed to disrupt the e-commerce scene in Singapore and SEA, perhaps the better question to ask is why e-commerce in Southeast Asia is not like Amazon — and the answer is clear.

Southeast Asian e-commerce is successful because it caters to audiences in Southeast Asia, whether these are vendors on platforms or consumers searching for goods on these platforms.

Southeast Asian e-commerce is unique, and Amazon should not be put on a pedestal just because of its scale. On the contrary, Amazon seems to have quite a bit to learn from SEA on how to treat its vendors, and how to adapt to changing times.  

Austrian economist Joseph Schumpeter described a process in which businesses and the entrepreneurs who run these businesses constantly adapt to disrupt established methods of production and wealth accumulation.

He called this process “creative destruction”, which embodies how Southeast Asian e-commerce companies have managed to improve upon Amazon’s business model.

Amazon may be huge, but it is by no means in an unassailable position. Southeast Asia’s e-commerce tech giants have managed to create new barriers to entry with their adaptations that, thus far, have held fast against Amazon’s attempts to break in. And they have done so in a way that helps vendors sell more, while keeping consumers entertained — a win-win solution for all. 

Perhaps, instead of considering why Southeast Asian e-commerce is unlike Amazon in scale, one should ask whether Amazon’s business model is one worth copying wholesale.

At the end of the day, Southeast Asian e-commerce platforms are successful in their own right, and in a way that is better than Amazon’s.

Featured Image Credit: Entrepreneur

Also Read: Winning e-commerce: Shopee’s Chua Kel Jin on how businesses can boost online presence and sales

Unlock the knowledge of
Asia's tech landscape

Subscribe to our premium content for just S$99.90 a year.

Monthly Package

S$9.90 / month
(or S$0.33 / day)

Gain access to all Vulcan Post Premium content for S$9.90 per month.

Annual Package

S$99.90 / year
(or S$0.27 / day)

Gain access to all Vulcan Post Premium content for S$99.90 per year.

or login to existing account 

Subscribe to our newsletter

Stay updated with Vulcan Post weekly curated news and updates.


Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)

Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)