E-commerce latest: Amazon drone trial, Chinese e-tailer fortunes and South East Asian tariffs

The Daily Update here brings you up-to-speed with some of the latest developments in e-commerce trade, including news that we’re a small step closer to e-commerce drone deliveries in the UK as Amazon participates in a landmark trial.

Meanwhile, numbers from some of China’s biggest domestic online retailers seem to support ongoing rumours of an economic slump – not that that’s stopping other nations in the region from introducing new import tariffs.

Drone delivery

The UK is a step closer to delivery by drone, with Amazon taking part in a national project to modernise the country’s airspace, reports City AM.

The e-commerce firm is one of six organisations selected for a Civil Aviation Authority (CAA) trial, evaluating the performance of drones capable of flying beyond the operator’s field of vision.

Along with inspecting offshore wind farms, use in air traffic control and policing, Amazon drones will be the subject of data collection for the evaluation of safety measures such as the ability to detect and manoeuvre away from other air traffic.

“Our goal is to make drone operations beyond visual line of sight a safe and everyday reality, contributing to the modernisation of UK airspace and the incorporation of new technology into our skies,” said Sophie O’Sullivan, the director of future of flight at CAA.

Amazon already operates drone delivery services in the US, with Phoenix in Arizona the first city to utilise the technology. The firm intends to roll out usage in the UK and other European cities later this year.

JD sale success

One of the major Chinese e-commerce players, JD.com, outperformed its Q2 profit forecasts on Thursday.

US-listed shares of the ‘e-retailer’ rose 4% and the firm reported that both turnover and order volumes reached a new high over the June, ‘618’ sale period.

However, its overall order total for Q2 was down on the previous year, leading CNBC to suggest that e-commerce data from the country’s biggest firms point towards a domestic economy showing few signs of slowing.

Chief executive Sandy Xu was nonetheless optimistic and attributed the strong June figures to cutting prices. Xu said:

“Low price is a result of our core capabilities. This will continue to distinguish us in the e-commerce industry.”

The low-price strategy has been in place since late 2022, after the departure of the firm’s founder Richard Liu. Following Beijing’s crackdown on tech leaders, with several high-profile arrests, Liu fled to London.

According to FT reporting, it has been suggested by several company insiders that he still directs the company from afar, remaining integral to decision-making on key issues such as investment strategy and global expansion.

Import duties

China’s strategy of exporting its way out of its domestic struggles could be set to hit another roadblock as many South East Asian countries plan to raise levies on cheap imports to protect their domestic markets.

Rest of World, which covers global tech developments, reports that Indonesia will be following through on its pledge to target cut-price, Chinese online retailers, such as Temu.

Earlier in the summer, trade minister Zulkifli Hasan announced tariffs of 100-200% on imports such as ceramics, footwear, clothing, textiles and cosmetics.

Other countries from the region have set intentions to follow suit, with Malaysia introducing a 10% sales tax on imported goods priced below 500 ringgit (US$106).

Thai industry bodies have also responded to the entry of e-commerce platform Temu by calling for tariffs on imported products.

The Bangkok post reported that 23 Thai industries were exposed to cheap imports from China, with Kriengkrai Thiennukul, the chairman of one of the country’s main manufacturing trade bodies, telling the paper that 111 factories have closed each month this year.

UAE-commerce drive

In a departure from the luxury consumption for which it is best known, the UAE is setting its sights on a booming e-commerce industry, with projected 2026 sales of $9.2bn, following 2019 figures of just $2.6bn.

Established to support industry in 2020, the Ministry of Industry and Advanced Technology got 11 e-commerce providers operating in the country to sign a voluntary compliance pledge, committing them to uphold consumer rights.

Signees include the country’s biggest e-tailer Amazon, second-biggest player Noon, Nikai Group and the Al-Futtaim Group, made up of well-known brands such as IKEA, Ace Hardware, Toys 'R' Us and Marks & Spencer.

The ministry’s undersecretary, Omar Al Suwaidi, said that the pledge “aims to strengthen the standard of quality and safety of products sold online”.

“The ministry is committed to fostering a regulatory environment that promotes international best practices in product marketing and we invite all e-commerce platforms to join this voluntary initiative.”

The cut-price, e-commerce model may face some challenges gaining greater adoption in the UAE, with 30% of the country’s market dominated by luxury brands and greater emphasis placed on a highly personalised service.