The e-commerce landscape is expanding with new global markets rising to the occasion with massive potential. Southeast Asia region is turning out to be the next e-commerce hub. The changing consumer behavior, rapid internet penetration rate, and young demographics are leading to the rise of the e Southeast Asian region.
Let’s dive deeper to understands the prospects of the region and how new trends are shaping its future.
Southeast Asia – New Hub of eCommerce business opportunities
Every country in the Southeast Asian region has its own cultural nuances that shape the shopping trends. The global exposure and ease of doing business has brought global brands to SEA markets and also propelled the local homegrown digital brands.
But the trends and shopping are quite different as compared to matured eCommerce market like US and China. The Changing consumer habits and expanding market has created new opportunities for brands entering the SEA market. Now the challenge is can they cater to new needs and meet customer exception with enhancing shopping experience.
The SEA market has evolved post-pandemic with rapid rate – In between 2016 to 2021, the eCommerce sales grew 5 times, which is approximately 40% while retail share surged upto 20% from previous 5%.
As compared to countries like China where population is on decline, Southeast Asia’s has expanding range of working population and estimated to be 23 million by 2030 (Source: Brain & co. Report). The rise in household income is also expected to touch new-high of 51 million (higher & upper middle class) by 2030.
Rise in Consumption
The combination of higher household income and expanding working class has propelled consumption. By 2030, the market is expected to add approximately 140 million plus new consumers. And that will be almost 16% of estimated world consumers.
The world economic forum report on ASEAN member countries suggests many of these first-time shoppers make their first purchase online with first luxury product. This is quite contrast to the Indian-subcontinent where first time buyers start with small ticket items or fashion products.
By 2027, The region is supposed to hit 402 million digital consumers according to the forecast by Brain & Co. Report with Indonesia leading growth, followed by the Philippines, Vietnam and Thailand.
Southeast Asia may well be poised to become the ‘next China’ in terms of e-commerce growth potential given the current trajectory of e-commerce as a percentage of total sales and overall e-commerce sales surging.
Shift in Consumer behaviour
Gen Z & millennial are strengthening Southeast Asia’s eCommerce Landscape. According to Bain & co. Southeast Asia study report, across six countries, 60 percent of digital consumers do not know what they want to purchase when shopping online. The impulse shopping and product discovery while browsing, specially under non-essential category like fashion clothing and consumers electronics are the top categories with immense potential.
In other words, they largely discover new products while they are browsing, particularly for non-essential categories like clothing and consumer electronics.
Trends Guiding the SEA market
Brands targeting nations like Singapore, Malaysia, the Philippines, and Indonesia, in the region adapting to each country’s technological progress and consumer habits is the recipe for digital commerce success.
The rise of mobile commerce
The majority of Southeast Asian consumers now shop online using their mobile devices. This trend is being driven by the growing availability of smartphones and affordable data plans. Brands need to ensure that their websites and apps are optimized for mobile devices to reach this growing market.
The growth of social commerce
Social media platforms like Facebook, Instagram, and TikTok are becoming increasingly important for e-commerce in Southeast Asia. Brands can use social media to reach a wider audience, promote their products, and drive sales.
The increasing popularity of online marketplaces
Online marketplaces like Shopee, Lazada, and Tokopedia are becoming the go-to destinations for online shopping in Southeast Asia. Brands can benefit from selling their products on these marketplaces by tapping into their large customer base and getting access to their logistics and payment solutions.
The focus on convenience
Southeast Asian consumers are increasingly looking for convenience when shopping online. This means that brands need to offer fast and reliable delivery, as well as easy and secure payment methods.
The importance of personalization
Southeast Asian consumers are looking for brands that can provide them with a personalized shopping experience. This means that brands need to collect data about their customers and use it to tailor their offerings.
The young and feisty Southeast Asian market has touched new highs with a massive influx of brands eyeing the market. Every country in the region has a different level of penetration of eCommerce but the potential of the region is immense. The customer behavior has a lot in common with China and Korea as K-pop idols set fashion trends and Tik-Tok Shops are making waves in omni-channel eCommerce. However, the core issues in the competitive landscape are optimizing product listing and monitoring availability, keyword share, and tracking customer feedback. The mScanIt, ecommerce competitive intelligence helps brand navigate through the digital commerce ecosystem with a global dashboard to monitor product performance versus competition across categories, platforms, and countries. In this ever-evolving ecosystem brands need to be spot on identifying opportunities to stay ahead.