CAMIA: A good online environment provides the best opportunities for the development of e-commerce in Southeast Asia

After years of global e-commerce popularity, some markets have reached saturation and the growth rate has gradually slowed down. At the same time, as a large market with huge room for development in the Internet and smartphone industries, the Southeast Asian e-commerce market still has immeasurable development potential.

The growth of the Internet economy and the increase in the proportion of the younger generation have enhanced the consumption potential in Southeast Asia, which points to the online market. In several Southeast Asian countries, 200 million people have purchased or rented online services, and 230 million people are accustomed to searching for goods online. Online sales channels and services are changing the way consumers consume. In order to get closer to more consumers, many offline companies have also opened online channels.

In fact, e-commerce in Southeast Asia has been developing at a relatively high speed in recent years. The compound annual growth rate (CAGR) of e-commerce in the region has reached 31%, and the market value is expected to grow to US$88 billion by 2025.

By establishing e-commerce-related regulations and allowing large investments from outside investors, Indonesia, with its large population, is also expected to achieve 52% growth by 2025. Singapore, although small, is also the e-commerce hub market in the region, with many large e-commerce players such as Lazada and Zalora choosing Singapore as their development base.

The Thai government regards the development of e-commerce as one of the core tasks of the Industrial Revolution 4.0, which has effectively promoted the development of e-commerce in the country. Southeast Asian countries such as Malaysia, Vietnam and the Philippines are also paying attention to the development of their respective e-commerce industries. Among them, e-sales on social networking sites are the focus of attention. Nowadays, most online retailers choose to reach consumers through social networks such as Facebook or Instagram.

Social networks play an important and necessary role in Southeast Asia’s e-commerce industry. Today, the average sales of social networking sites in the region have reached 30% of the total online sales value, while the world average is only 16%.

At present, the success rate of e-commerce transactions in Southeast Asia is still lower than that of other major markets in the world, and the region is still a long way from saturation. It is under this premise that more and more companies and individuals are moving their products to online channels. The most convenient and fastest "relocation" destination is social networks.

According to We Are Social data, social network users in Southeast Asia account for 53% of the total population, 16 percentage points higher than the global average of 37%. Now, consumers in Southeast Asia are accustomed to accessing social networks, searching for products and transactions through mobile devices.

According to relevant data, Southeast Asian e-commerce is developing towards "mobile commerce". Currently, the proportion of mobile shopping in Vietnam is 33%. Indonesia is 31%, the Philippines is 25%, Thailand is 52%, Malaysia is 40%, and Singapore is 39%.

The current online environment in Southeast Asia is a great opportunity for retailers (especially existing Southeast Asian e-commerce big players) to develop. Here, players can capture new consumers in this unsaturated market every day.

Source: CAMIA