Social distancing has increased the online presence of people and businesses tremendously during the pandemic. With many working from home and less eager to go out shopping due to the risk of infection, there has been a considerable upswing in the purchasing of groceries, personal and healthcare products online. 

For many businesses, going online in 2020 has been an important strategy, allowing them to keep up with the changing demands and maintain sales. With no end to the COVID crisis currently in sight, the number of converts to eCommerce is likely to continue to rise.

Pandemic assisted acceleration

By the end of 2020, the digital population in Southeast Asia is likely to hit 310 million, a number that is five years ahead of the previous forecast by Bain & Company. According to their latest study “Digital Consumers of Tomorrow, Here Today”, the average digital spend in Southeast Asia also skyrocketed and is predicted to climb by more than 3.5 times the amount compared to 2018. This study, commissioned by Facebook and conducted by Bain & Company in May 2020, questioned 16,491 digital consumers in Singapore, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines.

The evolving community has driven change throughout Southeast Asia. We look at how Singapore is building a digital community.

Now, due to the pandemic, by the end of 2020, 70% of the region’s population is likely to be online. The expanding demand for contactless and home-based consumption is causing faster online spending growth in Southeast Asia than in markets such as India, China, and the US. 

Across all of Southeast Asia, consumers have made the step from offline to online. Of the respondents, 41% saw online purchases as their preferred channel for shopping and, overall, Malaysia, Singapore, and the Philippines are counting the highest percentage of digital consumers. However, from a growth perspective, Indonesia’s digital consumer population growth outpaces its counterparts. The digital consumer population in Indonesia rose 15% in 2020, compared to an average of 5% to 9% in neighbouring countries. 

Social media is a key component for 62% of customers when it comes to new products and brands, with short videos being one of the preferred media formats. With around 68% of respondents saying they did not plan their purchase before going online, it shows how social media and advertising can influence spending.

Online shopping is on the rise

Not only are more consumers going online and spending a higher amount of money, but they are also buying a more extensive range of products: clothing, electronics, household appliances, groceries, toys, to name a few. The average number of categories that buyers purchased from online multiplied by 1.4 compared to 2019, with grocery purchases seeing the most significant increase. Packaged food, fresh groceries, and non-alcoholic drinks have become the most frequently purchased products in the past three months and the average spend in these categories has reached a 2 – 2.5 fold increase compared to 2019. 

As a consequence of this increased eCommerce engagement, cash payments have dropped 6% compared to 2019. E-wallets, on the other hand, increased by 8% compared to the previous year. Bank transfers decreased just 1%, and the use of credit and debit cards dropped a little, by 0.3%.

The eCommerce landscape is still very fragmented, with a high level of cross-shopping across websites. In 2019, digital consumers shopped at an average of 3.8 websites, whereas, in 2020 this number increased up to 40% averaging 5.2 visited websites. A fierce battle is waging between many of the larger online shopping companies in the region as they fight for their market share. 

Government support in Singapore

To answer the high demands for online shopping, small food and beverage business owners in Singapore can count on financial assistance if they use one of three food delivery platforms – Deliveroo, FoodPanda, or GrabFood. The “food delivery booster package” will take 5% of the commission charged by the delivery platforms as financial support to aid F&Bs to manage costs for food delivery orders to help them get through these difficult times when dining-in is not allowed. 

Here’s how consumer and buying trends are evolving in Southeast Asia.

Google Pay Singapore introduced a feature to help customers find food pickups and delivery options with access to menus too. Taxi operator ComfortDelgro has transformed its fleet of 10.000 cars for food and beverages deliveries as its new service, ComfortDelivery, helps drivers generate income while normal rides have been plummeting. 

The 2019 study already predicted that the digital population in Southeast Asia would rise significantly. But the Corona crisis accelerated this unexpectedly. People were home-bound and moved online for their purchases, mostly for groceries. The digital spend in Southeast Asia rose accordingly and for many customers shopping online is now their preferred way to buy goods. Businesses have had to either change their strategies to answer this demand or close up shop. With some countries, like Singapore, offering government support to help vendors supply customers with their basic needs, this move to a digital way of life looks permanent.