Investing in an Online Presence in Asia

Alberto Vettoretti

Posted: 2nd July 2014 09:40

Asia is fast on its way to becoming the largest e-commerce market in the world. Internet penetration is growing by leaps and bounds, and the region’s youth population increasingly prefers to interact with companies and retailers over the internet rather than with more traditional forms of physical shopping and communication. Alongside these developments, Asia’s fast-growing middle class has fostered the evolution of a strong online consumer culture that cannot be ignored by companies seeking long-term success in the region.

A keen understanding of the trends and developments currently shaping Asia’s e-commerce landscape is key to fostering a successful growth strategy in Asia for almost any type of business. Increasingly, interacting with a company’s online presence is the first contact prospective clients and customers have with an organization, and can be a critical determinant of that relationship’s ultimate success.

For companies not yet prepared to establish physical operations in developing markets across Asia, establishing a local headquarters and online presence in either Singapore or Hong Kong can serve as an effective gateway to the wider region.

Singapore in particular is an increasingly popular destination for companies seeking to test the waters in  key markets and lay foundations for Asia-wide e-commerce operations. The city-state’s business-friendly tax regime, straightforward legal system, and minimal requirements for company establishment make Singapore an effective base for establishing an online presence and conducting e-commerce operations across Asia.
Even without a local online presence in every market, companies can successfully tap into Asia’s e-commerce potential through a holding company in Singapore or the organization’s country of origin. Sites such as Amazon.com exemplify this strategy, with rapidly growing popularity across the Asia-Pacific region despite lacking an online presence in each individual market. It should be kept in mind, however, that websites that tailor to the local tastes and demands of individual markets are often significantly more successful than those that do not. eBay’s failure to fully adapt to the Chinese consumer’s unique tastes and preferences, for example, ultimately resulted in the retailer losing out to Alibaba’s Taobao and Tmall online marketplaces.

Establishing an online presence in Asia can oftentimes be confusing for companies attempting to navigate country-specific processes and regulations, and expanding beyond a holding company jurisdiction usually requires the assistance of a professional services firm. This can ensure a company’s successful establishment and entry into operations in the emerging e-commerce markets of Asia.
 
This article was first published on Asia Briefing.
 
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam, in addition to alliances in Indonesia, Malaysia, Philippines and Thailand, as well as liaison offices in Italy and the United States.
 
For further details or to contact the firm, please email info@dezshira.com or visit www.dezshira.com.

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