Rapid Growth in Southeast Asia E-Commerce Market Driven by Millennials and Social Media

The culture of shopping online is continuously adopted at a rapid pace across the globe. It is not surprising that the E-Commerce market is growing in number of users as well as market players.

Southeast Asian E-Commerce market is projected to witness exponential growth from US$ 14.5 billion in 2016 to US$ 64.9 billion in 2021 and the number of users in the region will also be expected to grow up to 264 million users by 2021. The optimistic growth in the region is driven by one particularly notable trend: large population of millennials with rising social media adoption.

Millennials in Southeast Asia with Internet access are exposed to numerous factors that cause them to accelerate the E-Commerce market in the region, including:

  1. Rising income levels
  2. Abundance of choices in the market
  3. Access to smartphones and high Internet penetration rate in Southeast Asia
  4. Increasing population
  5. Greater availability of localized services

Emerging markets in the region are catching up fast; Indonesia is expected to replace Thailand, the region’s largest E-Commerce market in 2016, in the near term.

Frost & Sullivan’s Great Southeast Asia Subscription Program provides detailed analysis of the E-Commerce market outlook in Southeast Asia:

Malaysia

Malaysian E-Commerce market players focused heavily on promotional events in 1Q 2018 such as Chinese New Year and Pay Day promotions, which successfully retained the shopping momentum among customers. The country’s key market players such as Shopee and Lazada continued strong Year-on-Year (yoy) performance.

Singapore

Top market players in Singapore, Lazada, continued to exert market dominance followed by Qoo10, Zalora, Shopee and many others. Market players in Singapore took advantage of high promotional events such as 11.11 and 12.12, which further propelled market growth.

Thailand

The E-Commerce industry in Thailand recorded 1 billion GMV in 1Q 2018 with 1.1% Quarter-on-Quarter (qoq) growth. Shopee and Lazada acquired ¼ of the market, while Shopee continued to grow its market share by over 5%.

Indonesia

Heavy discounts and cash-backs on a wide variety of products encouraged total order to reach 107.0 million in Indonesia, hence registering 6.9% qoq growth. Both Shopee and Tokopedia hold high customer engagement activities in the country.

The Philippines

Despite reduced volume of orders across the country, big players such as Shopee and Globe managed to grow their number of orders. Shopee and Lazada continue to increase their order volume market share from 23% in 4Q 2017 to 30% in 1Q 2018.

Vietnam

With total order volume growth of 15.2% and reaching 46.4 million, Vietnam observed 12.7% GMW qoq growth. Vietnam’s GMW as of 1Q 2018 reached $828.5 million with top three payers (Shopee, MWG and Lazada) holding 57% of the total market.

Taiwan

With market GMV growth of 4.4% and reaching $3.5 Bn in 1Q 2018, Taiwan proved itself to be market leader in GSEA region. Dominant market players such as Shopee registered 14% qoq GMV growth as a result of aggressive promotions and free shipping offers.

The retail sector in Southeast Asia E-Commerce market is expected to grow from 3.1% in 2016 to 10.5% in 2021 – making it one of the dominating sector in the region’s E-Commerce market. With more players entering the market and existing players continuously evolving to expand market shares, the landscape of E-Commerce in GSEA is ever changing.

To learn more about Frost & Sullivan’s Great Southeast Asia Subscription Program, visit https://bit.ly/2PK0fh3


Sachi Mulmi is a researcher with Frost & Sullivan. She can be reached at sachi.mulmi@frost.com

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