A new era for online shopping has begun, and the eCommerce trends in Southeast Asia reflect these changes. The global spread of the COVID-19 pandemic has rapidly pushed forward the entire retail industry’s digitalisation as consumer behaviours changed.
According to Statista, ecommerce revenue is likely to reach over $67 million USD in 2021. The research also shows that the market’s largest segment is the fashion industry, with a projected market volume of over $18 million USD this year.
What is in store for eCommerce in Singapore and the ASEAN region in 2021 and beyond?
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Increased mobile internet usage, the exponential growth in the uptake of eWallets and digital payment services, and a rise in social commerce; all factor into the emerging online marketplace trends in Southeast Asia.
Online moving forward
Shopping from home was already gaining popularity pre-pandemic, but lockdown restrictions forced more traditional retailers to move online when their brick-and-mortar businesses faced closure. From mom-and-pop shops to mall franchises, internet shopping has become the primary focus for many, including Singapore’s Marina Square, Thailand’s Siam Center, and three Indonesian Pakuwon Group malls. They all teamed up with online retail platform Lazada to set up virtual shopping experiences to keep their businesses alive.
A relatively new phenomenon in the shopping from home sector is live commerce. Retailers are increasingly using live streams to sell goods like cosmetics, fashion, and food—similar to a home shopping network, but updated for the new decade. China’s live-streaming eCommerce is leading the way and experiencing considerable growth, with a projected 39% of its population viewing them in 2020 compared to 30% in 2019. Sales from shopping shows look likely to have grown by more than 100% in 2020 vs 2019. This is a growing trend in Southeast Asia too, with order volume from live stream shopping growing by around 115% across Thailand, Vietnam, the Philippines and Singapore.
Online shopping customers desire nothing more than a simplified checkout process. In the past, the process included typing out your credit card number, password, billing address, and more, slowing down the purchase and raising security concerns. However, in 2021, many easy, secure digital payments options are available at the click of a button. Major international credit card companies such as Visa, UnionPay, American Express, Discover, and Mastercard expanded their Click to Pay experience in Asia based on the EMV® Secure Remote Commerce specifications (SRC) in July 2020.
The PPRO’s 2020 report shows that the Singaporean government is also encouraging the switch to digital payment methods through incentives for businesses, including subsidising digital transformation costs. In Southeast Asia, eWallets are gaining popularity as a digital payment method too.
Seamless mobile experience
The future of the internet is mobile! Globally, more and more people have access to smartphones, and even those with a desktop often make mobile devices their primary internet shopping choice. In 2020, 40% of people used only their smartphone to search the internet, and this number will only continue to grow. CNBC reports that 72.6% of internet users will use their smartphones solely by 2025, making it imperative for online retailers to optimise their mobile experience.
Shopper frustration resulting from navigating a clunky, desktop website on their phones can reduce the likelihood of completing a purchase. Mobile-friendly apps like Shopee and Lazada are now the way forward.
Surge in social commerce
Social media eCommerce is the next logical step in the digitalisation of retail. Facebook marketplace and other similar pages allow shoppers to browse products and contact the sellers directly about an available listing. Now, social media sites like Instagram are streamlining the process further by featuring shoppable posts. This feature allows consumers to purchase items directly on the app, without redirecting to another checkout platform. People are more likely to shop on a site they already engage with, contributing to an easy and successful online experience for both sellers and buyers.
Automation is key
Thanks to the pandemic’s social distancing measures, consumers are now leaning towards automated shopping solutions more than ever. Reducing human contact during a transaction from beginning to end is one of the retail takeaways from 2020. Staffless stores such as Amazon Dash Cart and some by South Korean telcos are leading the charge into this brave new world. Furthermore, the delivery of online purchases does not necessarily require humans anymore. Several countries, including Japan, are testing autonomous delivery robots hoping they will become a more widespread reality in the future.
The impact of COVID-19 has drastically changed the retail landscape for good. Most of the eCommerce trends in Southeast Asia favour the transit to a fully digital experience moving forward. With the hope of a viable vaccine in 2021, the world may move on from the pandemic. However, new consumer habits—mobile online shopping, digital payments, and social media—are here to stay, impacting eCommerce in Singapore and the rest of the region.