E-commerce in South East Asia grows at an exponential rate
Digital retail in South East Asia grew 85% year-on-year and the region is on track to see almost 80% of consumers go digital by the end of 2021.
SEA consumers are open to the discovery of new products and services
The growth in SEA outpaces the likes of China (5%), Brazil (14%) and India (10%), according to Facebook and Bain & Company’s annual SYNC Southeast Asia report.
“It is clear that the pandemic continues to push people online at an aggressive pace. People in South East Asia are forming new habits related to online discovery, consideration, and purchase,” said Benjamin Joe, the vice president for South East Asia at Facebook.
“For both new and established brands, these shifts signal the need to rethink traditional e-commerce experiences and find creative ways to inspire and connect with customers online.”
Praneeth Yendamuri, a partner in Bain & Company’s consumer products practise added: “Southeast Asia will undoubtedly leapfrog China to become the fastest-growing digital economy in the Asia Pacific. E-commerce gross merchandise value (GMV) grew almost +80% YoY and we are expecting it to double in the next five years.”
“The moment has arrived for brands to take advantage of Southeast Asia’s (SEA’s) paradigm shift in consumer behaviours. The most successful brand owners will focus on strategies to both capitalize on a post-pandemic digital boom in the region and insulate themselves from ensuing digital disruptions.”
What are the report’s findings?
There will be 350 million digital consumers in SEA at the end of 2021 compared to around 310m at the end of 2020.
Digital spending per person is up 60% compared to last year, with overall e-commerce sales set to double by 2026 as SEA consumers are not just spending more online as forecasted in 2020, more of them (45%) are using online as a primary purchase channel.
SEA consumers are open to the discovery of new products and services with 65% of them saying they do not know what they want to buy when they go online and 51% saying they had tried new online stores this year that they had never heard of before.
They are also buying an even wider range of categories online - survey respondents said they now buy online for an average of 8.1 categories – 60% higher than the 5.1 average seen in 2020.
Consumers are shop-hopping across 7.9 websites before making a purchase decision — a notable increase from an average of 5.2 sites in 2020. They are also becoming environmentally conscious with 92% of those surveyed saying they are willing to pay more for sustainable and socially responsible products, with over 80% of consumers willing to pay up to 10% premium for such products.
86% of in-home food delivery is expected to remain post-pandemic as around 72% of respondents said time spent "in-home" would remain the same with 75% of the time spent shopping online at home also expected to continue post-pandemic.
At least 37% of respondents said they expected to work from home even after the situation improved and 90% of executives believe that a hybrid WFH model will become the norm post the pandemic.
80% of channels people use to discover what they should buy are online channels and only 20% of such channels are offline. When it comes to evaluation, 83% of channels used to find more information about a product or service are online.
Digital channels now get 56% off purchase spend with the remaining 44% going to offline channels. Social media videos tripled in popularity as a discovery channel with 22% of respondents citing them as the top channel for discovery.