The U.S. retail giant doesn’t currently offer local services in Southeast Asia, but it is working to enter the region via an launch in Singapore next year.

Right now, sources revealed that Amazon is covertly acquiring assets, including refrigerated trucks, and making new hires as part of an initiative led by head of ASEAN Steven Scrive, in time for its scheduled launch for selected services in Singapore within the first quarter of 2017.

The U.S. company is likely to initially offer its Prime delivery service alongside its AmazonFresh grocery service in Singapore.

Earlier this year, Amazon made an offer to acquire Redmart, a grocery delivery startup in Singapore backed by Facebook co-founder Eduardo Saverin, but the bid was deemed too low and rejected.

However, news subsequently broke that Redmart is in talks to be acquired by Lazada, the e-commerce firm that Alibaba invested $1 billion in earlier this year. Amazon declined to reenter acquisition talks, despite contact from Redmart, instead deciding to build out its own operations.

Southeast Asia is home to over 600 million consumers and, while online is estimated to account for less than five percent of all commerce today, its digital economy is tipped to grow significantly over the next decade.
Already, Alibaba has stepped into the region via investments in Lazada, delivery firm SingPost, and payments company Ascend Money. Amazon competes fiercely with Alibaba-backed Paytm, Flipkart and Snapdeal in India, and it has decided that now is the time to join its rival in Southeast Asia.

The core advantage of making inroads to the island republic makes a lot of sense because Singapore is not only smaller and easier to service from an operational perspective, but the level of customer spend and consumer culture is more closely aligned with Western markets where Amazon thrives.

Other emerging markets will take great levels of adapting, such as Malaysia and Indonesia, leaving Singapore as an obvious first landing point and general hub/HQ for the region.