For Southeast Asia’s six largest countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam – trends show that e-commerce is growing at a very fast rate. Currently, e-commerce is valued at USD 14.8 billion and this is set to increase six-fold by year 2025.
One of the main factors for this growth is internet adoption and rate of digitization, a change driven by young people under 35 who account for about 70 % of the population. Considering that today, only about 53 % of the general population in Southeast Asia uses the internet, the growth opportunities are tremendous. For example, only during the last year the number of internet users grew by 31 % or about 80 million people. Additionally, 47 % of the population in the region are active mobile internet users, which corresponds to more than 300 million people.
A driving force behind rising internet penetration is Southeast Asians’ love of their mobile phones. Smartphone usage rates are as high as 91 % in Singapore, 81 % in Malaysia, 72 % in Vietnam, and 70 % in Thailand. Rates in the Philippines are a bit lower with 61 %, and the same goes for Indonesia with a rate below 50 % adoption.
Smartphones in Southeast Asia account for 25 % of online retail sales and show a yearly increase of 44 %, which is a significantly higher growth rate than other devices. It is the primary web access which pushes retailers to think mobile-first and to ensure that their customer offerings are mobile-friendly. To be part of the mobile market many e-commerce companies have therefore launched their mobile apps first and only later have added a “desktop” website. Furthermore, major online marketplaces like Lazada, Zalora, 11street and Zilingo have all launched mobile apps to not only reach consumers but also marketplace sellers.
The increase in internet usage and mobile penetration goes hand in hand with a mobile-first attitude. This is something that surely won’t change, and it is why a mobile-first attitude is paramount for e-tailers who are considering selling to Southeast Asia.
Colin Lin, Sales Account Manager, Direct Link Singapore
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