Distribution is the backbone of any successful business, and this couldn’t be truer when it comes to doing business in Southeast Asia. With a population of over 680 million people and a growing middle class, it’s one of the most promising regions for companies looking to expand their reach. However, with so many opportunities comes fierce competition, and that’s where distribution comes in as the key to success.
Having a strong distribution network is critical to reaching your target audience and gaining a competitive edge. With so many different countries and cultures in the region, each with its own unique set of challenges, having a well-established distribution channel is essential for getting your product in the hands of customers. Whether you’re selling consumer goods, technology products, or services, a robust distribution network is key to unlocking the potential of Southeast Asia’s thriving markets.
Many Southeast Asia early-stage startups are still going strong despite global headwinds
Navigating the complex landscape
One of the biggest challenges of doing business in Southeast Asia is navigating the complex web of regulations, customs, and distribution networks. In order to succeed, companies need to have a deep understanding of the local market and the challenges that come with doing business there. This requires working closely with local partners and distributors who have established relationships and a deep understanding of the market. By partnering with these experts, companies can tap into the local knowledge and networks that are essential to success in Southeast Asia.
Lalamove, the innovative on-demand delivery company, has disrupted the industry by building a strong distribution channel that delivers results. It all starts with their user-friendly mobile app, which makes it simple for customers to place delivery orders and track their packages. With millions of downloads, the app is a critical component of Lalamove’s distribution channel, reaching customers where they are.
In addition to their app, Lalamove has a powerful network of delivery drivers that provides fast and efficient delivery services. They’ve also established strategic partnerships with local businesses and e-commerce platforms, expanding their reach and tapping into new customer bases.
Customer preference
Another reason why distribution is key to doing business in Southeast Asia is the diverse range of consumer preferences and buying habits across the region. There is no one-size-fits-all approach to distribution. Companies need to understand the unique needs and habits of consumers in each market and tailor their distribution strategies accordingly. For example, in some markets, consumers prefer shopping online, while in others they still prefer to shop in physical stores.
One Championship, the premier mixed martial arts (MMA) promotion company in Asia, has built a strong distribution channel that has elevated them to the top of their industry. It starts with their strategic partnerships with major broadcasters, including TV networks like ABS-CBN and Fox Sports Asia, reaching millions of fans through traditional media. The company also leverages digital platforms, including social media, to reach and engage with fans, with a large following on Facebook, Twitter, and Instagram.
One Championship is known for its high-quality live events, attended by thousands of fans and broadcast on TV and digital platforms. They secure sponsorship deals with major brands, including Singha, Grab, and Red Bull, to increase visibility and reach. With a data-driven approach, the company regularly measures the success of their distribution channels and makes changes as needed to reach and engage with fans even more effectively.
Relationships and community
Building relationships is just as important as having the right products and services. The region is known for its strong cultural ties and the importance of personal connections in business. Companies that are able to build strong relationships with local partners and distributors will have a significant advantage over those that rely solely on their products and services. In Southeast Asia, relationships can open doors, help navigate regulations, and provide access to new customers and markets.
START Inc., an emerging Web3 project targeting the Japanese and Philippines markets, has a strong distribution channel that leverages partnerships and community to drive success. One of their key strategies is forming partnerships with major corporations, celebrities, and government organizations, providing them with access to new resources and potential customers. The project also collaborates with cryptocurrency, NFT and anime projects from around the world, establishing a global network of support.
Another critical component of START’’s distribution channel is its strong focus on community building. They host regular events and meetups, bringing together entrepreneurs, investors, and other key players in the startup ecosystem. START also fosters a sense of community through its online channels, including social media and its growing pool of 19,000 Discord members where they can connect and collaborate.
Infrastructure defensibility
Another key factor to consider when it comes to distribution in Southeast Asia is the infrastructure and logistics network. Most countries are still developing their infrastructure and logistics networks, which can make it difficult for companies to get their products to customers quickly and efficiently. Companies need to work closely with local logistics providers and distributors to ensure that their products reach their target customers in a timely and cost-effective manner.
Lazada, Southeast Asia’s leading online shopping and selling platform, has built a strong distribution channel through its innovative logistics network. They have invested in sophisticated technology, including advanced warehousing systems and real-time tracking, allowing them to deliver packages quickly and efficiently. Lazada’s logistics network spans across the region, reaching millions of customers in countries like Indonesia, Vietnam, and the Philippines.
In addition to their technology investments, Lazada has established strategic partnerships with major logistics companies and couriers, leveraging their expertise and resources to further improve delivery speed and reliability. They also offer multiple delivery options, including same-day and next-day delivery, allowing customers to choose a delivery option that best fits their needs.
Reflection
With a growing middle class, increasing disposable incomes, and rising demand for high-quality products and services, Southeast Asia represents a huge opportunity for companies looking to expand their reach and tap into new markets. With its unique challenges and opportunities, companies need to have a deep understanding of the local market and develop strong relationships with local partners and distributors. By doing so, they can tap into the region’s potential and gain a competitive edge in one of the world’s most dynamic and exciting markets.
The article titled “Why distribution is key to doing business in Southeast Asia” was contributed by Will Fan, CEO and co-founder of NewCampus.
About the author
CEO & Head of School at NewCampus, a modern business school for hypergrowth leaders in Southeast Asia.
At the intersection between design, education and community. Spent the past decade in China, SE Asia and the Middle East. Find me resetting at F45 or yoga, dabbling in Web3.