Published by Molly Moore, Oct 15, 2020 This statistic presents the value of the e-commerce market in Southeast Asia from 2015 to 2019 and a forecast for 2025. Among the most … The contest for a place in the market will be fierce and the contestants many. Watch: Lazada CEO Li Chun on the development of e-commerce across Southeast Asia The archipelagos of Indonesia and Philippines make logistics complex. Related articles: E-commerce set to dominate the region in 2019. The sector is predicted to exceed $150 billion by 2025, 1.5 times bigger than the previous prediction. Source: iPrice. In a joint study by Google and Temasek, Southeast Asia’s internet economy is slated to be worth more than US$240 billion by 2025, US$40 billion more than what was first projected in 2018. Coronavirus: e-commerce in Southeast Asia rides high on pandemic boom The sector was already tracking massive growth, increasing in value from US$5.5 billion in … The biggest and fastest growing sector, e-commerce was projected to be worth $150 billion by 2025, according to this year's e-Conomy Southeast Asia report released by … Lazada has helped to solve this problem by offering an e-wallet that can be used as an online bank. Returns as of 12/08/2020. Shopee can't lose money forever. In 2018, Google forecasted that Vietnam’s e-commerce by 2025 will reach 43% growth – the highest in the region. The region's e-commerce GMV grew by 23 percent annually from 2018 to this year, faster than China's compound annual growth rate during the same period, the report said. As the market matures, it will be worth tracking which companies prove to be persistent leaders. According to e-Conomy SEA 2019 report by Google, Southeast Asia’s E-commerce value has reached the mark of $38 billion, posing an impressive annual growth of 62% during 5 recent years. Liu said, "E-commerce is projected to grow to $300 billion by 2025, but has a penetration rate of less than 5 percent among the 650 million people living in Southeast Asia." Mark Woo, head of e­-commerce, travel and financial services at Google as this week declared that Southeast Asia is ripe for growth and will be the next major ecommerce boom market. The region's e-commerce GMV grew by 23 percent annually from 2018 to this year, faster than China's compound annual growth rate during the same period, the report said. With 630 million people, a growing middle class and rising internet penetration, Southeast Asia is often considered to be the next gold rush for e-commerce. The total e-commerce market in Southeast Asia is expected to hit gross merchandise volume of $153 billion by 2025, from $38.2 billion this year. Then, the company began engaging deeper into the e-commerce industry and create a new holdings as one of Southeast Asia’s leading e-commerce integrated service provider. The company also lets customers pay for goods with cash upon delivery or at a local convenience store serving as a distribution hub. Click on the ‘Deep Read’ button to read more about how companies are preparing for e-commerce growth in Southeast Asia. Logistics does not keep pace with the growth of e-commerce in Southeast Asia A survey from iPrice Group – a Malaysia-based online shopping aggregator – revealed that over the social distancing in April and May, good delivery times increased by 52 per cent to 2.8 days per order, nearly one day more than before the pandemic. In Southeast Asia, only 16% of people use debit cards and only 9% have a credit card. The region's e-commerce GMV grew by 23 percent annually from 2018 to this year, faster than China's compound annual growth rate during the same period, the report said. During recent IMA Asia Management and CEO Forums, participants identified several factors that are stimulating this growth in Southeast Asia. Sea's gaming business generates all of the company's cash flow today but likely has limited growth potential because the company hasn't been focused on developing new games. This eye-popping growth is part of the reason Sea's stock price has more than doubled in the last year, but Sea has also reported strong results in its gaming segment. Indonesian e-commerce companies Tokopedia & Bukalapak performed well in Southeast Asia although only available in a single market (Indonesia). A market’s maturity doesn’t necessarily translate to a higher conversion rate. Taking a hyper-local approach. Electronic commerce or e-commerce in Southeast Asia is the buying and selling of products and services over the internet in the countries of Southeast Asia.These practices reached Southeast Asia during the dot-com mania in the 1990s. We use "cookies" to collect information. In the US, it is 11%. Much will depend on each player’s market savvy, speed and creativity in an uncertain and volatile environment. While the trends are clear, individual winners and losers are still to be determined. According to a 2017 study by Hootsuite and We Are Social, about 47 percent (306 million) of people in Southeast Asia are active social media users. By 2025, e-commerce is predicted to be worth US$102 billion – making up more than 40 percent of the total worth of the region’s internet economy, Hundreds of millions of people across Southeast Asia are already shopping online, and the region enjoys some of the highest rates of ecommerce adoption in the world. More than 70% of e-commerce transactions in the region are paid cash on delivery. Second largest country in Southeast Asia, the Philippines is a large and rapidly developing market for e-commerce. Broad-based economic growth may become a scarcer commodity in 2019, owing to near term macro factors such as global trade tensions and rising interest rate environment. See you at the top! Today, Lazada operates in six countries: Indonesia, Vietnam, Malaysia, Thailand, Singapore, and the Philippines. Southeast Asia is a region and not a single market. It was founded in 2009 as an online gaming company and didn't jump into e-commerce until 2015 when it launched its Shopee marketplace in Taiwan, Indonesia, Vietnam, Thailand, Singapore, Malaysia, and the Philippines. E-commerce grew 63% to reach $62 billion in 2020, to become the largest vertical this year, while the travel sector contracted 58% to $14 billion. Read what are the opportunites and challenges in navigating ASEAN's e-commerce industry today. The latest trends also indicate that Southeast Asia will continue to enjoy double-digital growth in ecommerce spend well into the next decade, fuelled by increasing … E-commerce has overtaken online travel to become the biggest sector in ASEAN’s internet economy according to this year’s edition of the e-Conomy Southeast Asia report released by Google, Singaporean sovereign wealth fund Temasek and Bain & Company earlier this month. In 2018, it had 50 million active buyers on its platform and surpassed its competitors in terms of the gross merchandise value listed on its website. Olay, Shopee to accelerate ecommerce growth in Southeast Asia Thursday 8 October 2020 15:27 CET | News. Nevertheless, there is an expectation that delivery times will continuously decline. With regional e-commerce players going all out to battle for leadership in each of their geographical markets, consumers across ASEAN can expect to enjoy more value, choice and convenience. By then, these 45.77 million eCommerce users will spend an average of US$48.72 online. This strategy was expensive, but it paid off. And that is very much the Asian model of e-commerce. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Regional players like Lazada tend to focus on more cross-border transactions and international brands, while the local companies tend to sell more goods from local merchants or are focused on a specific category like electronics. The number of Internet users in Southeast Asia, and particularly in the 6 largest ASEAN … Covid-19 and lockdown boost e-commerce in Southeast Asia The total turnover reached 105 billion for this year. E-commerce has experienced unprecedented growth over the last two decades. It is unclear exactly how much money Lazada is making because Alibaba doesn't disclose separate financials, but based on the high-level numbers and market share data, we can conclude that Lazada is a prospering marketplace with significant growth potential. Home food deliveries and entertainment among the leading sectors. If you look at the most valuable e-commerce company in Asia, it’s Alibaba, with a $240 billion market cap. Exchanges. Shopee is the leading e-commerce platform in Southeast Asia and Taiwan. A recent report by Google and Temasek forecasts that e-commerce in Southeast Asia will grow US$72 billion in sales in 2018 to US$240 billion by 2025. A recent report by Google and Temasek forecasts that e-commerce in Southeast Asia will grow US$72 billion in sales in 2018 to US$240 billion by 2025. China, the global leader in e-commerce online sales, captures 24% of total retail sales. However, several governments have started to address this issue through regulatory reform and incentives. In the rest of Southeast Asia, e-commerce sales account for roughly 1% of retail sales. Lazada was already a leading e-commerce platform in the region when Shopee was launched. Covid-19 and lockdown boost e-commerce in Southeast Asia The total turnover reached 105 billion for this year. SINGAPORE — Chinese tech giant Alibaba needs to look beyond China and Southeast Asia in order to sustain current levels of growth, an analyst said Thursday. E-commerce in Southeast Asia is poised for a boom in sales over the next five years but companies capitalising on the growth face significant challenges. Coronavirus: e-commerce in Southeast Asia rides high on pandemic boom The sector was already tracking massive growth, increasing in value from US$5.5 billion in … The worth of South East Asia’s online market is expected to reach $300 billion by 2025. Digital 2019 Spotlight: Ecommerce in Southeast Asia. Moreover, the government’s Thailand 4.0 policy, which enhances internet connectivity in every village in the country, is expected to energize the market further. Plus, China’s AliPay, Japan’s LinePay, as well as Go-Jek’s Go-Pay and Grab’s GrabPay are stepping in to fill the breach. In order to gain traction, Sea offered free shipping and didn't charge any commissions to use Shopee at first. The report also estimates that e-commerce will exceed $100 billion in GMV by 2025, from $23 billion in 2018. It raises the demand for delivery of online purchases, but also increases delivery times and raises the risk that governments will place restrictions and increase the fees for road usage. A logistic executive explained, ‘In Southeast Asia there are 20,000 islands in an area that is bigger than Europe. Southeast Asia’s e-commerce industry has seen rapid growth in recent years, and leading the momentum is Lazada, Alibaba Group’s flagship online marketplace in the region. The biggest differentiator between … E-commerce growth in Southeast Asia is driven by a high mobile internet penetration rate, young consumers and an increase in disposable income. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Asia’s very different. As the world fights COVID-19 with social distancing and remote work, e-commerce growth has accelerated. E-commerce, along with ride-hailing, are said to be the main drivers of Southeast Asia's internet economy, which, according to a popular industry … The bulk of e-commerce transactions surpassed $10 billion, up from $5.5 billion in 2015, based on iPrice Group's 2017 State of eCommerce report. It is Southeast Asia’s relatively young population and improved access to the Internet on mobile devices that propels the growth in social commerce. According to SimilarWeb Lazada holds the number two market position in SouthEast Asian commerce. According to SimilarWeb Lazada holds the number two market position in SouthEast Asian commerce. Despite not heavily monetizing its platform, Shopee generated $639 million in revenue over the last 12 months. With Indonesia’s eCommerce market standing at US$ 21.0 billion 1 in gross market value (GMV) in 2019, Indonesia is currently an eCommerce hotbed in Southeast Asia. To learn more about IMA Asia’s memberships, click here or contact us at service@imaasia.com. With the continued e-commerce boom, BEST also accelerated its growth in Southeast Asia. As the ecommerce market in Southeast Asia matures and consolidates, marketplaces, e-tailers and ecommerce startups will be increasingly scrutinized for margin growth. This industry is seeing lots of investment and has great potential to continue being one of the biggest eCommerce economies in Southeast Asia. Over time, the cost of delivery will go down.’. Unicorns of ASEAN: Lazada × And Alibaba is first and foremost a third-party business—tens of millions of merchants on the platform, all competing, all creating variety. This is up from just $47 million in 2017. To spur this growth, the ASEAN Business Club Forum highlights five specific actions that emerging markets in Southeast Asia should take to boost … She added that this presents huge opportunities for e-commerce companies. Lazada is also popular because of its vast inventory of foreign goods. The new study titled “Digital Consumers of Tomorrow, Here Today” looks into the rapid acceleration of the digital … Southeast Asia’s e-commerce industry has seen rapid growth in recent years, and leading the momentum is Lazada, Alibaba Group’s flagship online marketplace in the region. But logistics providers are optimistic they can overcome this obstacle. But once the demand is established, you can set up distribution centres closer to the demand. Luis is the Founder and Managing Partner of LVS Advisory LLC, a registered investment advisor based in New York City that manages investment portfolios for clients. It is unclear how much money Lazada is taking in because Alibaba doesn't disclose separate financials, but it's safe to say that Lazada is a prospering marketplace. Gone are the days of aggressive top line growth and market share grabs at all cost. SINGAPORE -- E-commerce retailers across Asia have seen explosive sales growth during the pandemic crisis as consumers under lockdown splurge online. Southeast Asia’s internet economy booming. At a turning point in terms of Internet and mobile penetration, the population of Southeast Asia is quickly adapting its behaviors to take advantage of new opportunities available in purchasing products and services online. Market data powered by FactSet and Web Financial Group. Investors today appear to be bullish on owning Sea to gain exposure to Shopee which has vast market potential despite its lack of profitability today. A recent Google-Temasek study estimated that the eCommerce sector in … Hundreds of millions of people across Southeast Asia already shop online, and the value of ecommerce spend in the region passed US$50 billion in 2018, an annual increase of more than 20 percent.. Launched today in Delhi, the report Unleashing E-Commerce for South Asian Integration notes that although e-commerce has grown significantly in South Asia, online sales … 5 Vietnamese companies are in the list of 10 e-commerce sites with the highest number of visits in Southeast Asia. E-commerce companies are expected to invest millions to shorten delivery times. Some cookies are essential - we can't provide our services without them. Southeast Asia's e-commerce industry has seen rapid growth in recent years, and leading the momentum is Lazada, Alibaba Group's flagship online marketplace in the region. The company started to monetize its platform by charging fees for value-added services such as cross-border transactions and seller services like inventory management and fulfillment. The e-commerce market in South East Asia is a … In 2019, the company introduced seller commissions in Taiwan and may roll out this fee in other markets as they mature. Increased volumes also will drive down costs and new regulations eventually will improve traffic conditions. The internet economy already accounts for almost 3 percent of the region’s gross domestic product (GDP), and Google and Temasek project that this will rise to 8 percent by 2025. While much of that has occurred in developed markets with wide internet access, there is still a lot of untapped growth potential for the industry in emerging markets. That's according to a report from Google and Temasek. The Internet economy in Southeast Asia “hit an inflection point in 2018,” and is likely to be worth $240 billion by 2025, which is $40 billion more than earlier estimates. After the dot-com bust, native e-companies have seen promising and fast growth in their sector. ... Sea Limited: Southeast Asia's leader in all things digital sales. The most visited e-commerce platforms on desktop and mobile web in Malaysia and Southeast Asia in 2018 was Lazada, commanding the largest market share of … The Asia-Pacific ecommerce region (APAC) accounted for 40 per cent of all ecommerce sales across the globe in … For 2025, the Indonesian e-commerce market was predicted to generate 83 billion U.S. dollars in online retail sales, increasing from 21 billion U.S. dollars in 2019. You need to use multi-modes of transport and delivery costs are high. Brands Shift Their Focus from Data Gathering to Data Utilization. E-commerce in Southeast Asia is poised for a boom in sales over the next five years but companies capitalising on the growth face significant challenges. Liu said, "E-commerce is projected to grow to $300 billion by 2025, but has a penetration rate of less than 5 percent among the 650 million people living in Southeast Asia." With increasing internet penetration and a middle-class population, eCommerce in Southeast Asia is projected to set a healthy foot by 2025. Southeast Asia is currently a very attractive market for companies involved globally in the e-commerce sector and smaller local players. In 2018, there were 37.75 million eCommerce users in the Philippines, with an additional 18.02 million users expected to be shopping online by 2022. Click OK to accept cookies and continue or. E-commerce in the region has grown by more than 62% CAGR over the past 3 years according to the Google-Temasek e-Conomy SEA 2018 report. The hype surrounding e-commerce seasonality and monthly sales in Southeast Asia is high — a trend not seen in any other part of the world; The maturation and rapid progress of SEA’s leading e-commerce companies continue to play a critical role in the rise of digitization and online commerce This would indeed have a negative impact towards retail sales, especially for a country that is highly dependent on tourist dollars E-commerce set to burgeon in SEA 08 Mar 2017 The e-commerce market in Southeast Asia (SEA) is poised for a boom, and its internet economy is expected to burgeon to more than $200 billion within a decade, a new report has found. Other cookies can be turned off, although our website won't work as well without them. Prodigious growth foreseen for online commerce in Southeast Asia through 2025 This new report Southeast Asia B2C E-Commerce Market 2018 forecasts eight … Contest for a place in the region when Shopee was launched in 7 markets in 2015 to connect,... 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