Riding the digital wave: boomtime for Southeast Asian e-commerce

Increasing choice, better internet access, and rising affluence will continue to drive more spending online as Southeast Asian e-commerce enters a boom era, according to a new report.

The Facebook and Bain & Company study is a follow-up to last year’s report on Emerging Middle Class in the region. Titled “Riding the Digital Wave: Southeast Asia’s Discovery Generation,” the new study looks at how the behaviours of today’s digital consumer is reshaping online spend in the region.

The study surveyed 12,965 respondents across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, and interviewed 30+ CEOs and venture capitalists in the region. It shows that the emerging middle class in Southeast Asia will account for 70–80 per cent of the growth in digital consumers by 2025.

According to Bain, from 90 million digital consumers in 2015, the region grew 2.8 times to 250 million digital consumers last year. By 2025, the Southeast Asian e-commerce market will account for 310 million consumers. By then, the study estimates, online spending will outpace the growth of digital consumers by a factor of three, with clothing and personal care emerging as two of the leading categories.

“There is no longer just one way to shop and nobody shops the same way twice,” said Facebook Singapore country MD Sandhya Devanathan. “The key takeaway is that designing for discovery is absolutely crucial, given that customers engage with a business through multiple channels at the same time. In Singapore alone, 75 per cent of the respondents said that they are either open to other brands or will buy from multiple brands when shopping online. This means businesses of all sizes, including specialty players have a significant opportunity to compete on a larger scale in Southeast Asia.” 

The study shows the immense potential to build brand loyalty and growth as there is no dominant player in the Southeast Asian e-commerce market. The region’s savvy consumers ‘shop-hop’ across 3.8 platforms on average before they make a purchase decision.

“Brands need to be very savvy and re-imagine their marketing and trade spend to be in sync with the ever-evolving omnichannel consumer journey,” said Bain & Company partner Praneeth Yendamuri. “They also need to build new muscles to ensure a positive online shopping experience to their digital consumer.”

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