The sector is predicted to exceed $150 billion by 2025, 1.5 times bigger than the previous prediction. In the rest of Southeast Asia, e-commerce sales account for roughly 1% of retail sales. E-commerce has experienced unprecedented growth over the last two decades. To learn more about IMA Asia’s memberships, click here or contact us at [email protected]. Prodigious growth foreseen for online commerce in Southeast Asia through 2025 This new report Southeast Asia B2C E-Commerce Market 2018 forecasts eight … SINGAPORE -- E-commerce retailers across Asia have seen explosive sales growth during the pandemic crisis as consumers under lockdown splurge online. The contest for a place in the market will be fierce and the contestants many. 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.. Shopee also sells its own products directly to consumers on its platform (similar to Amazon's private label brand). 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. 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." 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 would indeed have a negative impact towards retail sales, especially for a country that is highly dependent on tourist dollars As the ecommerce market in Southeast Asia matures and consolidates, marketplaces, e-tailers and ecommerce startups will be increasingly scrutinized for margin growth. A logistic executive explained, ‘In Southeast Asia there are 20,000 islands in an area that is bigger than Europe. Brands Shift Their Focus from Data Gathering to Data Utilization. The archipelagos of Indonesia and Philippines make logistics complex. 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 … 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 … 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. It has also become a leader in most of its markets in website traffic volume. 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. Today, Lazada operates in six countries: Indonesia, Vietnam, Malaysia, Thailand, Singapore, and the Philippines. Second largest country in Southeast Asia, the Philippines is a large and rapidly developing market for e-commerce. By then, these 45.77 million eCommerce users will spend an average of US$48.72 online. This was made an even bigger part of the platform's story after Alibaba took control of the company and brought on many Chinese sellers. If you look at the most valuable e-commerce company in Asia, it’s Alibaba, with a $240 billion market cap. Over time, the cost of delivery will go down.’. E-commerce companies are expected to invest millions to shorten delivery times. ... Sea Limited: Southeast Asia's leader in all things digital sales. 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. Will Alibaba's Cloud Business Ever Generate a Profit? Our ultimate aim is to empower the e-commerce growth in southeast Asia, through an easy & integrated end-to-end e-commerce … Singapore, with the highest e-commerce penetration in ASEAN, has about 6% of its retail sales online. 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. 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 … Beside, Shopee and Lazada continued to gain market share in the region as both e-commerce platforms saw a double digits growth in visitors. This isn't an unreasonable bet to make as Amazon has proven that dominant e-commerce businesses will be highly valued by the market and do not necessarily need to show healthy profit margins. Plus, many of the mid-tier cities are far from the principal capital cities. E-commerce growth in Southeast Asia is driven by a high mobile internet penetration rate, young consumers and an increase in disposable income. Shopee can't lose money forever. Watch: Lazada CEO Li Chun on the development of e-commerce across Southeast Asia As the world fights COVID-19 with social distancing and remote work, e-commerce growth has accelerated. The company has made it easier for locals to purchase goods from other Asian countries and provides affordable logistics solutions for cross-border transactions. 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. Each country has different e-commerce characteristics and challenges, and the demographics of consumers also differ from market to market. After the dot-com bust, native e-companies have seen promising and fast growth in their sector. Tokopedia and Bukalapak are popular in Indonesia, Sendo is a leader in Vietnam, Qoo10 is big in Singapore, and Taiwan has several local companies including PCHome. Southeast Asia’s e-commerce market is well on its way to exceeding Google’s prediction of hitting US$200 billion in value by 2025, with e-commerce players such as Lazada, Shopee, and Tokopedia expanding their efforts in the region to meet ever-growing customer demands. 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. The high e-commerce in this region is due to an increasing disposable income, young internet consumers, and a high rate of mobile internet penetration. Let's conquer your financial goals together...faster. It was launched in 7 markets in 2015 to connect consumers, sellers, and businesses in the region. 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 … 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. Both e-commerce companies’ mobile app ranked 3rd & 4th respectively with the highest monthly active users (MAU) and highest number of total downloads in SEA, Q2 2019. Luis Sanchez CFA has been a contributor to the Motley Fool since 2019. Exchanges. 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 … That's according to a report from Google and Temasek. During recent IMA Asia Management and CEO Forums, participants identified several factors that are stimulating this growth in Southeast Asia. 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. The e-commerce market in South East Asia is a $100 billion market today and could grow to $300 billion by 2025, according to Mashable.com. Among the most … Asia’s very different. The e-commerce market in South East Asia is a … According to a We Are Social Report, in 2018, there were 391 million mobile internet users in Indonesia, Thailand, Malaysia, Singapore, Philippines, and … Increased volumes also will drive down costs and new regulations eventually will improve traffic conditions. Cumulative Growth of a $10,000 Investment in Stock Advisor, These 2 Companies Dominate E-Commerce in Southeast Asia @themotleyfool #stocks $BABA $SE, Sea's stock price has more than doubled in the last year, 3 Top Large-Cap Stocks to Buy in December, Alibaba Hasn't Given up on This High-Growth Market, President Trump to Sign Bill That Could Kick Chinese Stocks Off U.S. Unlike in developed countries, a crucial barrier to e-commerce in many of these markets is the payments process, due to a large population of people with no bank accounts. They are the two most visited e-commerce websites and also the top shopping apps used in the Southeast Asia region, including Malaysia, Singapore, Thailand, Philippines, Indonesia, and Vietnam. Copyright, Trademark and Patent Information. Click on the ‘Deep Read’ button to read more about how companies are preparing for e-commerce growth in Southeast Asia. Thailand is the other biggest market in Southeast Asia, witnessing high growth in the e-commerce market, which is expected to register a CAGR of 14.5% and reach USD 5.8 billion by 2022. 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. 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. 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. Higher spending power and a heightened preference for contactless transactions will continue to drive the exponential growth of the digital economy, according to new research from Facebook and Bain & Company in a follow-up to the 2019 study “Riding the Digital Wave.”. 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. With increasing internet penetration and a middle-class population, eCommerce in Southeast Asia is projected to set a healthy foot by 2025. Lazada and Shopee have taken a regional approach to Southeast Asian e-commerce, but there are many local companies in the individual countries. This industry is seeing lots of investment and has great potential to continue being one of the biggest eCommerce economies in Southeast Asia. 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. Much will depend on each player’s market savvy, speed and creativity in an uncertain and volatile environment. 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. Each country has … 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. Jet Commerce is a one-stop e-commerce solution and enabler. Click OK to accept cookies and continue or. 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." The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. But logistics providers are optimistic they can overcome this obstacle. The Asia-Pacific ecommerce region (APAC) accounted for 40 per cent of all ecommerce sales across the globe in … 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. Returns as of 12/08/2020. Despite not heavily monetizing its platform, Shopee generated $639 million in revenue over the last 12 months. China, the global leader in e-commerce online sales, captures 24% of total retail sales. 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. Liu said,"E-commerce is projected to grow to $300 billion by 2025, but has a penetration rate of less than 5 per cent among the 650 million people living in Southeast Asia." DHL Express Invests EUR750 Million in Asia Pacific on the Back of E-Commerce Growth. The company also lets customers pay for goods with cash upon delivery or at a local convenience store serving as a distribution hub. Other cookies can be turned off, although our website won't work as well without them. While the growth of e-commerce is there, companies trying to capitalise on this growth face some daunting challenges. Lazada was founded in 2012 by European tech conglomerate Rocket Internet to build the "Amazon of Southeast Asia." A recent Google-Temasek study estimated that the eCommerce sector in … A market’s maturity doesn’t necessarily translate to a higher conversion rate. It made quite a bit of progress toward its ambitious goal as a stand-alone company before its sale to Alibaba (NYSE:BABA) in 2016 at a $2 billion valuation. 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 … However, several governments have started to address this issue through regulatory reform and incentives. 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. 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. 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. But once the demand is established, you can set up distribution centres closer to the demand. 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. 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. We use "cookies" to collect information. 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. The number of Internet users in Southeast Asia, and particularly in the 6 largest ASEAN … 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. E-commerce in Southeast Asia – a global growth bright spot. 2018 We are expanding to more areas in Southeast Asia: Thailand and Vietnam Further plans of … 5 Vietnamese companies are in the list of 10 e-commerce sites with the highest number of visits in Southeast Asia. Taking a hyper-local approach. Unicorns of ASEAN: Lazada × Source: iPrice. In Southeast Asia, only 16% of people use debit cards and only 9% have a credit card. Sea Limited is the current e-commerce market leader in Southeast Asia. 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. For now, this means there is a lot of white space for many companies to thrive. Related articles: E-commerce set to dominate the region in 2019. Gone are the days of aggressive top line growth and market share grabs at all cost. The biggest differentiator between … The new study titled “Digital Consumers of Tomorrow, Here Today” looks into the rapid acceleration of the digital … With the continued e-commerce boom, BEST also accelerated its growth in Southeast Asia. She added that this presents huge opportunities for e-commerce companies. 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. 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. Lazada has helped to solve this problem by offering an e-wallet that can be used as an online bank. This strategy was expensive, but it paid off. The report also estimates that e-commerce will exceed $100 billion in GMV by 2025, from $23 billion in 2018. 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. 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. His investing interests include tech, consumer, and event-driven situations. The worth of South East Asia’s online market is expected to reach $300 billion by 2025. With Indonesia’s eCommerce market standing at US$ 21.0 billion 1 in gross market value (GMV) in 2019, Indonesia is currently an eCommerce hotbed in Southeast Asia. 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. Nevertheless, there is an expectation that delivery times will continuously decline. Southeast Asia is currently a very attractive market for companies involved globally in the e-commerce sector and smaller local players. 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. 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. Researches from Statista reflect Indonesia to be the highest growing eCommerce Southeast Asia market forecasted to reach 52% by 2025. 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. 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. In 2019, the company introduced seller commissions in Taiwan and may roll out this fee in other markets as they mature. 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 campaign seeks to reach and engage with digital natives in Southeast Asia, empowering women to overcome the perceived challenges of 'adulting' and invest in quality products catered to their skincare needs. Payment innovation has been a major driver of e-commerce adoption, and that has been picked up by Lazada's competitors as well. 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. 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. While the trends are clear, individual winners and losers are still to be determined. The market for e-commerce in the region is growing rapidly because of high levels of overall economic growth and rising internet penetration. Traffic congestion remains a huge problem in most of Southeast Asia’s major cities. To spur this growth, the ASEAN Business Club Forum highlights five specific actions that emerging markets in Southeast Asia should take to boost … Home food deliveries and entertainment among the leading sectors. E-commerce in Southeast Asia is behind China and the developed markets of the West, but it is poised to take off in the next five years. Digital 2019 Spotlight: Ecommerce in Southeast Asia. The company’s mobile app ranked first in active users in … 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 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. According to SimilarWeb Lazada holds the number two market position in SouthEast Asian commerce. And Alibaba is first and foremost a third-party business—tens of millions of merchants on the platform, all competing, all creating variety. According to SimilarWeb Lazada holds the number two market position in SouthEast Asian commerce. 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. Covid-19 and lockdown boost e-commerce in Southeast Asia The total turnover reached 105 billion for this year. E-commerce penetration is still relatively low in Southeast Asia, with significant opportunities for more brick-and-mortar retail services to shift online and the company to … 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. Consumer goods manufacturers are leveraging their experience in China to develop a plan to capitalise on this expected growth. More than 70% of e-commerce transactions in the region are paid cash on delivery. Shopee is the leading e-commerce platform in Southeast Asia and Taiwan. And that is very much the Asian model of e-commerce. 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.
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