Changing Consumer Buying Behavior And Its Affect In Southeast Asia | E-commerce In Southeast Asia

September 2, 2024
Sarwat Usmani

With the advent of internet-integrated mobile use, Southeast Asia (SEA) has evolved as an emerging market in online sales and purchases. The prevalence of the Pandemic has caused ripple effects in the digital economy.
From baby boomers to millennial, consumer buying preferences have changed to e-commerce transactions. This blog will illuminate the facts about SEA countries’ e-commerce industry, potential growth, market comparison, barriers, and future trends.

Here is a look at several critical dimensions of the e-commerce Industry in SEA countries.

A backdrop of the E-commerce industry in Southeast Asia

Southeast Asia surrounds an area of 13000 square km of land and sea. Despite its vast area, it’s not as densely populated as South Asian countries. A brief snapshot of the Southeast countries with their e-commerce market trends is given;

What is Southeast Asia demographics' contribution to e-commerce?

United Nations’ current estimates say that Southeast Asia constitutes 10% (600 million) of the world population. Indonesia is amongst the most populated regions, with approximately 268 million people.

Southeast Asia encompasses 11 countries, including Indonesia, the Philippines, Vietnam, Thailand, Myanmar, Malaysia, Singapore, and Brunei Darussalam. In Southeast Asia, 50 % of the people enjoy urban life. However, with access to the internet in remote areas, this region has shown a promising contribution to the e-commerce industry.

How much economic growth is seen in Southeast Asia e-commerce?

Within five years, the gross merchandise value of e-commerce reached USD 11 billion in Southeast Asia at an exponential growth rate of 65%. Since introducing Lazada and Shoppe, Singapore has witnessed the largest e-commerce market in this region. Singapore is the central economic corridor in Southeast Asia.

Over the decade, it has jumped to US 73 K per capita income due to the overwhelming use of e-commerce buying and selling. With the ease of online payment policy and digital microfinance services, the e-commerce industry in Southeast Asia is rejuvenating its boom. By the end of 2024, you will see the hype in e-commerce revenues in this region to US 90 billion.

To what extent is Southeast Asia Advancing towards Ecommerce Platforms?

With the inception of the mobile market, the overall e-commerce industry has revitalized itself in Southeast Asian countries. It’s not unusual for the total market contribution from Southeast countries to the e-commerce industry to reach 370 billion by the end of 2030.

With the emergence of e-commerce provider companies such as Tokopedia or Grab, Indonesia has piqued its e-commerce buying and selling due to its high population density. However, domestic e-commerce platforms like Gioi Di Dong in Vietnam have intensified the total usage of the e-commerce industry.

Market Trends of Emerging E-commerce In Southeast Asia

To understand the e-commerce industry’s insights and trends in South Asia, we will illuminate critical aspects of its current scenario.

What is the current landscape of the E-commerce industry in Southeast Asia?

Economists reported that nearly six times, or 50%, of the increase from 2016 to 2024 has been accounted for in the e-commerce industry in this region. The prevalence of the Pandemic has triggered the e-business market in Southeast Asia. The most anticipated e-commerce platform, Shopee, has been gaining popularity in this region. Vietnam became a hub for social media platforms in Southeast Asia.
Companies have digitalized their omnichannel to personalize customer experiences. Singapore, a most promising player in the region, has shown an upward trajectory in the e-commerce industry. With new logistics and procurements, customers and retailers have shifted their traditional ways to digital buying and selling.

What are the five Top-notch e-commerce companies?

Whether consumers buy products from regular physical stores or become brand loyal to any specific company, consumer buying habits in Southeast Asia have drastically evolved. Younger demographics prefer to buy a wide array of online products.
⦁ Lazada and Shopee are landmarks in the e-commerce industry in Southeastern countries. Lazada, with a high web trafficking rate, is the most widely accepted e-business. Shopee, with 470 million monthly views, became the largest e-commerce provider.

⦁ Tokopedia comes in third place with an average contribution of 16 billion annually. However, emerging online marketplaces are Bilibliu from Indonesia, with 26 Million web trafficking monthly, and Bachhooaxanh, with free shipping orders of 300,000

Major Drivers Of E-commerce Growth In Southeast Asia

The pivots of the socio-economic situation in Southeast Asia in the e-commerce industry can be given as:
⦁ With the advent of digital financial services, Southeastern citizens find it easy to pay their bills, invoices, and expenses online. Therefore, gross merchandise value (GMV) has expedited to 2 times than the yesteryears. As a result, the rapid integration of online markets has attracted more investments in the e-commerce industry. The gig economy has propelled digital businesses to transform their focus to profitability by monetizing the bids.
⦁ Although Southeast Asia (SEA) has pumped online business due to the rapid integration of mobile and internet usage, online business in SEA still requires cross-border ease regarding cultural dimensions and logistical concerns. Most SEA countries have impoverished logistical infrastructure to provide prompt delivery and freight shipping to their neighboring countries.

⦁ Another critical aspect is the low acceptability of credit and debit cards for online payments. Cultural nuances due to multilingualism have been a significant barrier to the digital economy, and compliance with digital platforms varies from country to country.

⦁ Despite several constraints, a rise in net disposable income has been uplifting online trading. Indonesia has been an economic corridor for digital startups with minimum corporate taxes.

Future Outlook Of SEA E-commerce

SEA countries have been reshaping their retail sector by introducing digital pathways. Here are a few facts about the future outlook of the SEA Ecommerce Industry.

⦁ Automated inventory systems and precise pricing will be the leading contributors with the competitive edge. Like other regions, many social media influencers have used TikToks to enhance sales and customer numbers.

⦁ Moreover, SEA countries will optimize their online purchase by offering flexible shipping and delivery of merchandise. Further, automated customer services will boost the digital economy to the next level in the SEA region.

⦁ Lastly, digital omnichannel will create a broad landscape for customers to buy their favorite products.

In Summary,

With the advent of digital disruption, SEA countries have experienced an exponential increase in online business within five years. Internet-based mobile usage and access to digital financial services have increased gross merchandise value six fold since 2019.

This abrupt increase has shifted investors to SEA E-commerce markets to boost online buying and selling. This blog delved into understanding the critical scenarios of online business in the SEA region. Readers will have a glance at overall market trends in this region.