The eCommerce ecosystem is expanding, with a new global market boom that is offering enormous opportunities to marketers. Southeast Asia is emerging as the next major E-Commerce hotspot. The Southeast Asia market boom is being driven by shifting consumer behavior, increased internet penetration, and young demographics. Platforms like Shopee, Lazada, and Tokopedia dominate the region’s eCommerce digital marketplace.
The eCommerce market size of Southeast Asia is expected to reach $230 billion by 2025.
Let’s take a deeper look at the region’s potential and how new trends are changing its future.
Southeast Asia a new hub for eCommerce businesses
Each country in the SEA region has its unique cultural aspect that influences purchasing patterns, multinational exposure, and ease of doing business have attracted MNCs to Southeast Asia marketplaces while also propelling local digital brands.
However, the patterns and shopping experiences differ significantly from mature eCommerce marketplaces such as the US and China. The changing customer preferences and rising markets have opened new prospects for brands entering the SEA market. The challenge now is to adapt to new requirements while also meeting customer expectations by improving the purchasing experience.
As compared to countries like China, where the population is declining, the SEA working population is rising and is expected to reach 23 million by 2030 (Source-Brain & Co. Report). The household income is also predicted to reach a new high of 51 million (upper and middle class) by 2030.
Rise in Consumption
The combination of rising household income and an expanding working class has increased consumption. By 2030, the market is estimated to gain more than 140 million new users. That amount is nearly 16% of the estimated global custom base.
According to Brain & Co. Report, the region is expected to have 402 million digital consumers by 2027, with Indonesia leading the way, followed by the Philippines, Vietnam, and Thailand.
Southeast Asia could become the ‘next China’ in terms of eCommerce growth potential if the current trajectory of e-commerce as a percentage of total sales and the surge in overall sales.
Shift in Customer Behavior
Millennials and Generation Z are driving growth in Southeast Asia’s eCommerce market. Southeast Asia study reports,60 percent of digital consumers in 6 countries are unsure what they want to buy when buying on online platforms.
Impulse purchasing and product discovery when browsing, particularly in non-essential categories such as fashion clothing and consumer electronics, are the top sectors with tremendous potential.
In other words, people primarily find new things when browsing, especially in non-essential categories such as clothes and consumer goods such as electronics.
Patterns directing the Southeast Asian market
Brands targeting nations like Singapore, Indonesia, Malaysia, and the Philippines, in the region adapting to reach the country’s technological progress and consumer habits is the recipe for digital commerce success.
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.
Final Thoughts
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.
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