Commission Factory releases the latest State of Ecommerce SE Asia Infographic
E-Commerce in Southeast Asia experienced exponential growth in the last year. According to Marc Woo, the head of Google’s e-commerce, travel, and financial services, Southeast Asia is poised to become the next big market. With growth of $4 billion from 2015 to 2017, ASEAN (Indonesia, Thailand, Malaysia, Singapore, Philippines, and Vietnam) is forecasted to achieve double-digit e-commerce growth over the next 10 years.
Commission Factory has released the State of Ecommerce in South East Asia Infographic, highlighting the recent trends and research it has found on the web, that can help demonstrate to advertisers and ecommerce marketers the opportunities South East Asia presents over the next couple of years.
Source: http://blog.commissionfactory.com/
Amazon launched in Singapore early in 2017, as a test market for further expansion into the area. The availability of affiliate networks has also attracted interest from China’s two largest e-commerce retailers, Alibaba and JD.com, into Southeast Asian countries. The emergence of a strong middle class in many developing Southeast Asian countries, with their increasing discretionary income and ready internet access, are indicators of rapid e-commerce growth over the next several years.
- ASEAN middle-class population growth is expected to double in the next five years, from a census of 190 million in 2012 to over 400 million by 2021.
- More reliable and accessible internet service in ASEAN areas will triple by 2025 from 200 million to 600 million. According to estimates, 130 million residents in these countries possess smartphones.
- Google’s research with investment firm Temasek Holdings predicts that e-commerce sales in the region will grow at a 32% CAGR (Compound annual growth rate). In monetary terms, this will be from the current $5.5 billion to $88 billion by 2025.
- The GDP of ASEAN countries makes it one of the largest economies in the world, ranking just behind the behemoths of United States, China, Japan, Germany, the United Kingdom, and France.
- ASEAN GDP growth rate is forecasted to be 9% from 2015 to 2020.
While the potential for explosive growth is high for Southeast Asia, there are several factors affecting the market climate for e-commerce.
The disparate regulations among ASEAN countries require businesses to adjust strategy and incorporate many translations to accommodate varying markets. Local brick and mortar retailers are prevalent in these areas, making the e-commerce less attractive to the immediacy afforded by shopping locally. Lack of credit card ownership and dominance of cash-based economies hamper online transactions. Much of e-commerce is bank transfer and COD, resulting in high validation risks and orders that fail to complete.
The convenience factor of online retail for more developed nations is much less so in many Southeast Asian countries. In Indonesia, only 20% of the population has a bank account, and less than 10% own and use credit cards. Shipping across the region is still spotty and prone to long delays in some cases. The challenges of e-commerce to provide quick delivery are hampered by the lack of infrastructure on many ASEAN areas. While affluent and urban areas may have greater access to and education about online retailers, the greater populace still has limited access to and knowledge about, e-commerce.
Singapore leads ASEAN for e-commerce as the largest and most sophisticated buying market. The World Economic Forum’s 2014 Global Information Technology report ranks Singapore as Asia’s most network-ready and connected e-commerce market in the region, and Singapore is in a position to be a gateway to the rest of Asia Pacific for online sales. Its first-class infrastructure and proximity to the other ASEAN countries help large global e-retailers ease into the more inaccessible markets. Nearly 50% of Singapore’s population makes an online purchase once a month, with nearly 30% shopping online weekly.
CEO of Commission Factory, Zane McIntyre says, “As the internet infrastructure continually improves, many users will walk pass retail stores and rely on online shopping. This presents increasing penetration from e commerce retailers and influencers to penetrate the already underestimated consumer market through mobile”.
The demographic of ASEAN countries is young, populous, and well-connected – social media accounts in these areas are increasing at double-digit rates. There is well over 100% media penetration in all major markets, and nearly complete in the secondary and tertiary ones. The population is much more internet focused than their TV focused Western counterparts. This accessibility will be critical to the growth of e-commerce in the region.
About Commission Factory:
Commission Factory is the largest affiliate network in the Asia-Pacific region servicing, affiliates, merchants and agencies and work with 500+ of the world’s best brands.
