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How Amazon's UK office is taking on Lazada, Shopee, et al in Asia

Nigel Morris-Co...

Mail order (remember when it used to be called that?) is heating up to be a serious battleground across South East Asia. Three problems plague local platforms.

Amazon's UK operation is set to beat them without even opening a distribution centre in the region.

Lazada, Shopee and 11 Street are all heavily represented in the Malaysian on-line shopping market. They are by no means the only ones with a raft of entrants from fashion and other items. The lack of polish for the platforms is one thing, the (historically) poor service is another and the last is out and out fraud and counterfeiting.

Customers will put up with a lot when it comes to poor service especially in countries where time is not regarded as particularly important: the acceptance of the tardiness of others and a shrug of "it's Malaysia" is the usual response when the fact that time is not a renewable resource is pointed out. And so people are prepared to accept delivery schedules that have "windows" of several days. Lazada has recently invested heavily in addressing the problem of long delivery times and for items over which it delivers from its own warehouses delivery is, in central KL at least, the morning after delivery. 11 Street, however, does not keep its tracking up to date and there is, therefore, no idea when goods might arrive, if they have even left the retailer. The problem becomes worse when the purchase is made via that platform but the seller is overseas, which usually means China or, in the case of Lazada, often also means Korea. Delivery times can run into the weeks.

Then there's the fact that retailers often have little or no concept of protecting goods in transit. It is almost standard operating procedure that anything sent from China will be damaged. As locals run part-time businesses doing drop shipping with suppliers in China, this becomes worse: the local intermediary is earning so little on the deal that he will do or offer almost anything (including "keep it and use it if you can") not to have to have it shipped back at his expense.

But the real problems are the woefully untrue, inaccurate or incomprehensible product details - and the outrageous lies told about pre-discount pricing. For example, in a bricks and mortar shop, a particular wall fan sells for MYR675. Lazada's sell it advertising discounts against a range of prices but all below that price. That's not so bad as when items are advertised as having a pre-discount price of, in extreme cases, three times the local price, then a "discount" applied which brings it to somewhere near (but not always less than) the retailer. There is, it seems, no truth in advertising law in Malaysia as many products make what would be, in other countries, exaggerated claims. That, plus counterfeits, is one of the big reason why there is merit in shopping from an overseas retailer: until they get their acts together, internet shopping across South East Asia is, frankly, like shopping in a crazy frontier town.

Amazon's latest win is in shipping. Today is Monday. On Thursday evening I bought some door locks from the UK because I'd spent two Saturdays looking for what I wanted in KL, being told that locks of that type no longer exist. Well, if like me, you come from the Black Country, you know that's not true and you know exactly where to find them. So, internal door locks ordered from ERA, I was almost dismayed to find out that the locks were expected to be delivered to my door on the 14th Jan, that's today.

There's an interesting wrinkle over VAT. If you buy goods in the UK and have them delivered there is a scheme for reclaiming VAT when you take them out of the country. But it's not guaranteed to work and it is guaranteed not to work if your purchase is via the internet. However, where the goods are sold for delivery outside the UK and outside the EU, then the VAT is not charged at source. Yes, tax must be paid on import but for most goods that's less than the 20% of UK tax.

Given that retailers like to mark up European goods, even if I could find the locks, I can tell from other locks that they are much less expensive in the UK. And so after the keener pricing and VAT saving, my cost of postage of a multi-kilogram package is covered. I know that the information is correct and so what arrives will (unless there is a packing error) be what I ordered.

Much like Debenhams used to be a necessary evil on the high-street, now it seems as if Amazon has managed to achieve that even operating half-a-world away.

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