SE Asia To Drive Global E-Commerce Spree
Southeast Asia is about to spur global e-commerce demand.
According to a new report by PPRO, the region will see e-commerce growth of 5.5% in 2021. Singapore, Malaysia, Indonesia, the Philippines, and Vietnam will be the top five Southeast Asian markets leading the charge for market growth over the coming year.
The findings, included in its latest report, ‘Southeast Asia: The New E-commerce Frontier,’ have been collated from PPRO’s own data and market research for the year.
“This past year accelerated the world’s e-commerce growth by a decade, and our report highlights the impressive strides that have been made this year. In a world that’s less physically connected than ever, borderless commerce is connecting businesses with new customers,” said Tristan Chiappini, vice president and head of partnerships for APAC at PPRO.
Singapore’s e-commerce market has advanced rapidly over recent years, but 2020 saw consumers in Singapore increase the value of their online transactions by 51% across the top 5 biggest e-commerce platforms; Shopee, Lazada, Qoo10, Amazon, and Ezbuy.
Whereas Singaporeans used to procure groceries in-store or at more traditional wet markets, COVID-19 has sparked a shift in consumer habits, with 70% buying food and household items online.
This trend is set to continue with the Singapore government accelerating the adoption of cashless payment methods with incentives for businesses, like subsidizing digital transformation costs.
Notably, Indonesia has trumped the competition in market growth, with 55% of Indonesian consumers claiming they are buying online now more than ever.
This growth could be attributed to Indonesian consumers buying products online that would previously have been purchased in stores, including medicine (21%) and cosmetics (18%). It marks a shift in consumer purchasing habits, which presents a large window of opportunity for merchants looking to tap into this growing market in 2021.
Despite market contractions throughout the pandemic, 63% feel optimistic about their future. This has been reflected in recent spending habits, with the gradual growth of retail spending in Q4 2020 expected to continue.
To facilitate this spending, Malaysians have adopted the use of digital payment methods such as e-wallets. In fact, 40% of consumers are now using e-wallets for online purchases more than they did pre-pandemic, even for lower value purchases.
“However, for merchants to truly capture the benefits, they must have a sharp understanding of the local payment methods, which are crucial to converting sales. Those that strike the right balance between localization and global expansion will be the true winners in 2021’s e-commerce race,” said Chiappini.
Image credit: iStockphoto/Fertographer
