Despite the ongoing global pandemic, ecommerce is stronger than ever and continuing to grow. Mobile technology allows us to be constantly connected, whether that’s to keep up on social media, check the latest sports odds, or place an order for clothing, shoes, cars, and more.
Ecommerce in Southeast Asia is expected to grow 80% every year and double in the next five years. This should amount to $254 billion from $132 billion in 2021, according to a report by Facebook and Bain & Company consulting. Today, ecommerce is estimated to be worth 4.28 trillion US dollars.
The ups and downs
But what is going on with Shopify, the leading provider of essential internet infrastructure for commerce? On Tuesday, January 4, 2021, the company’s stock crashed by 10.4%. This comes on the heels of a very strong Black Friday and Cyber Monday performance, where the company made $6.3 million in sales. According to the company, that was a 23% increase from Black Friday and Cyber Monday in 2020.
A promising future for ecommerce in Southeast Asia as it adds 70 million new shoppers
Harley Finkelstein, the President of Shopify released a statement about sales for last year’s sales during the Holiday season. “These record sales showcase the monumental impact that independent businesses have on the global economy. We’re watching these entrepreneurs evolve in real-time, embracing selling strategies across every sales channel you can think of and showing up wherever their customers want to shop. This is the future of commerce, and it’s incredible to see our merchants around the world leading the revolution.”
It’s all growing
Despite these highs and lows within Shopify, Indonesia leads the way when it comes to consumers purchasing online. It’s Southeast Asia’s largest economy. According to CNBC, its digital consumer population is predicted to grow around 15%, from 144 million in 2020 to 165 million in 2021.
To add, it’s projected that Southeast Asia’s ecommerce sales will grow by 14% per year. To add to this trend of business through the use of digital wallets are growing in this neck of the woods. Specifically, this is in the Philippines (133%), Malaysia (87%) and Vietnam (82)%.
Who is in front?
Suppliers such as Shopee and Lazada lead the way in sales in Southeast Asia. Shopee is mainly serving customers in Taiwan and South America. What makes this platform interesting and attractive – is that it allows B2C and C2C to sell products. To add, this platform has customer chatting features, marketing, such as coupons/promotions and free shipping campaigns.
As with Lazada, it’s a subsidiary company of Alibaba, which is based in China. It’s B2C only, but they have warehouses in many different countries, which allows products to be shipped out at a really fast speed. There is a downfall with this service as the company has to approve stores. It could take a month to clear with the company to get your store opened.
Back to the Facebook and Bain report, something interesting that a partner said in the report is how fast the digital economy is growing in this area. “Southeast Asia will undoubtedly leapfrog China to become the fastest-growing digital economy in the Asia Pacific,” Praneeth Yendamur said. “Ecommerce gross merchandise value (GMV) grew almost +80% YoY and we are expecting it to double in the next five years.”
To show that this is a growing industry, digital spending per person is up 60% compared to 2020. To add to that, ecommerce sales in Southeast Asia are projected to double in sales by 2026. This comes as people are using the internet more.
You may ask how Facebook factors into this equation? Well, social media channels act as a discovery method, where consumers find products that they are purchasing. 56% of sales are coming from online, while 44% come from offline channels. Social media videos, such as TikTok are credited with bringing in 22% as the discovery method.
Even though things may be a bit dicey with Shopify, it’s good to know that Shopee and Lazada lead the way in this market, although they operate a bit differently than Shopify does. Ecommerce is still growing rapidly in Southeast Asia. With the pandemic, people are ditching “going to the store” and getting products delivered to their door with Facebook and other social media channels driving most of the business these days.