With restrictions on mobility and social distancing during the pandemic, the move to online shopping was inevitable. The increased purchasing of everyday goods online and shift in payment and engagement methods have brought eCommerce in Southeast Asia to a new and exciting period of growth. The region is one of the world’s most digitally connected, and shopping platforms such as Shopee, Tokopedia and Lazada deliver the day to day needs of the world’s largest trading bloc.
According to Euromonitor International’s research, the region is likely to almost double online sales by 2025, bringing in a revenue of close to $2 trillion USD. This increase is in line with researchers Bain & Co’s assertion that Asia-Pacific is leading the global growth trends by generating three-quarters of online revenue. With millions of customers purchasing online for the first time and many regular consumers increasing their spending, eTail in the region is looking healthy.
Digitalised nations
While many smaller businesses in the region still falter when it comes to digitalisation, there has been a sharp increase in digital activity in the past year.
We look at emerging trends in ecommerce in Southeast Asia
The APAC region contains the world’s most populated countries, but being designated as “developing”, they are incredibly susceptible to being left behind in the surge of digitalised consumerism.
Some countries, such as Singapore and Hong Kong, are leading the way, with 45% and 44% of businesses embracing digital strategies, respectively, while others are evolving slower. It is recognised that to recover from the economic downturn brought on by the pandemic, a digital-first approach is required by all small to medium enterprises (SMEs). By upping their digital resilience and futureproofing industries, economies in the region can ensure that they bounce back quicker, even in times of crisis.
Increased connectivity
Within the region, the increase in internet penetration since 2020 varies vastly from area to area. In 2019, the global rate of internet use was 45%, and all of APAC had above average internet penetration, except for Southern Asia, which was just below at only 42%.
Figures from 2020 show a global increase of 7% or 298 million new users, with Asia-Pacific rising to 56% during this time, up 9.2% on 2019’s numbers. The majority of this new internet connectivity occurs on mobile devices, with 151 million more people in the region using the internet on their phones in 2020 than in the previous year.
This dramatic rise in using mobiles to connect to the world online has significant repercussions for eCommerce. It shows how vital it is to develop mobile-first websites and shopping platforms that engage this audience.
Demographic influences
When considering the increased drive towards online consumerism in the region, the rapidly emerging eCommerce sector must note the changes in behaviours and the evolving target sectors. Before the global health crisis, the majority of APAC’s online shoppers (35%) made purchases between once and three times a month.
Now, with restrictions reducing footfall to physical stores, there is an increase in people buying through eCommerce platforms daily (+1%), 4 to 6 times a week (+5%) and 2 to 3 times a week (+5%). While these may seem to be small increases, they do not consider those new to online shopping entirely.
Ten APAC countries are above the global average for eCommerce purchasing per month. All those above the worldwide median for mobile shopping are in the region, and China and South Korea are the only two countries in the world spending more than their GDP per capita. These statistics demonstrate the potential for eCommerce in the area and show that the road to recovery from the pandemic-induced economic crisis is further digitalisation.
Many countries in the region have youthful populations, leading to an increase in technology usage. As a result, dependency on the internet in almost all aspects of life, including shopping and entertainment, increases exponentially. As the tech-savvy demographic continues to grow, so will the online entertainment and eCommerce sectors.
Fintech solutions
Southeast Asia is likely to generate over $38 billion USD in digital financial transactions in 2025, presumably becoming a huge factor in shaping the online retail landscape in the coming years. In areas where millions of people are underbanked, access to fintech products through mobile phones is a game-changer for eCommerce.
With the birth of super apps offering financial services, eCommerce, food delivery and ride-hailing all on one platform, the potential for increased eCommerce activity in the region is further enhanced.
As the eCommerce trends in APAC change post-pandemic, some aspects, such as increased regularity of online shopping, are likely to remain. With the reduction in banking and internet access issues preventing the area’s massive population from shopping online, this new trend will continue to be prolific in the coming years.