The Southeast Asian e-commerce industry has seen substantial growth as a result of the pandemic, according to the Map of E-commerce Year End Report 2020 by iPrice Group, SimilarWeb, and AppsFlyer.
The e-commerce industry in Southeast Asia’s six largest markets, Singapore, the Philippines, Vietnam, Malaysia, Thailand, and Indonesia, is projected to expand at a rapid rate, reaching a value of US$172 billion by 2025.
The Covid-19 pandemic has sparked a shift in consumer behavior that could hasten e-commerce adoption and lift the threshold for what can be transacted online.
Maybank is a financial institution of Singapore that offers a wide spectrum of investment, corporate & personal banking services like credit cards, deposits, loans & much more. According to Maybank Kim Eng, as purchases of disposable products and luxury goods have declined due to lockdowns and recession concerns.On the other hand, Consumers are stocking up on food, household goods, fitness equipment, and entertainment products.
E-commerce is on the rise.
According to Maybank Kim Eng, online shopping has become increasingly popular as a result of movement constraints, with more customers, including those who were previously hesitant to buy online, opting for home delivery.
“Given its value proposition, e-commerce is expected to rise to even greater importance in the basic functioning of everyday life, as more consumers shop online and a wider range of products are being merchandised. E-commerce demand is high-growth, but the specifics of consumer needs are also broadening out.”
As per their research, supermarkets have seen an increase in online orders as a result of increased social-distancing initiatives.
As a result of the inaccessibility of distribution slots, some online platforms have suspended new orders. The online market has grown rapidly as a result of new adopters being familiar with e-commerce and its advantages, which should help sustain a larger portion of this growth.
Third-party logistics is also on the rise, which is driving demand and supply chain optimization, as Maybank Kim Eng’s report says.
Southeast Asia’s E-commerce Markets with the Most Increased Traffic
Despite mobility constraints and escalating fears about the global pandemic, the year 2020 has signaled high consumer trust in e-commerce retail.
According to the survey, total website traffic for online shopping sites grew year over year in all countries. This is most evident in Singapore,Malaysia,Vietnam ,Indonesia, Philippines and Thailand. The amount of increased traffic in e-commerce these countries saw from 2019 to 2020 :
- Singapore (35%)
- Philippines (21%)
- Vietnam (19%)
- Malaysia (17%)
- Thailand (15%) and
- Indonesia (6%)
The web traffic of online department stores increased by 52% on average from Q1 of 2020, according to reports. This may be an indication that, due to social distance, most countries in the area have flocked to online department stores rather than retail outlets.
Additionally, the pandemic has taken a toll on the online traffic of several e-commerce pages. Dropping from Q1 to Q4 2020, platforms that sell cosmetics saw a 35 percent drop in average web traffic. Meanwhile, traffic to fashion and electronics websites fell by 14% in the six countries mentioned.
Southeast Asian consumers online demand for non-essential products such as fashion, electronics, health & beauty, and sports & outdoors has increased significantly because of the spread of Covid-19.
The average spending of Southeast Asians increased by 19%.
While web traffic to fashion and electronics sites decreased marginally, the average basket size for these categories increased significantly. Sports and outdoor goods faced the same fate.
According to the iPrice Group’s website, customers in Southeast Asia invested an average of $32 per order in 2020, up 19 percent from 2019. In 2020, the average basket size in Singapore and Malaysia was $61 and $41, respectively.
A new culture of stay-at-home has emerged
Research from Bain & Company and Facebook, mentions that Southeast Asian shoppers will likely continue to purchase groceries and other important products online even after the coronavirus pandemic is over.
Praneeth Yendamuri, a partner with Bain & Company based in Singapor ,also shares his opinion that another pattern which is likely to persist is the use of new apps in areas such as digital and social commerce, as well as video streaming. This includes e-payments and digital wallet apps that provide contactless payment solutions to customers who will be vigilant as countries raise their various levels of national lockdowns.
Even after economies are completely reopened, Southeast Asians are 1.5 times less likely than their American counterparts to go out in the future, indicating a major cultural shift in the region, according to the survey.
Furthermore the study claims, telemedicine and digital health care services will continue to be in high demand, providing opportunities for companies and investors to profit from the trend.
“A lot of consumers have used these services and find that the quality and the service levels they’ve gotten out of doing virtual checkups, consultations have actually worked for them,” Yendamuri said.
As shopping habits continue to change, the COVID-19 pandemic will provide additional impetus for development. Many e-commerce businesses must continue to invest in related activities to improve their relationships with customers.