E-commerce in Southeast Asia is thriving thanks to the increase in shopping options, the improvement of Internet access speed and people's physical life. The survey “Leveraging the Digital Wave: The Discovery Generation in Southeast Asia” conducted by Facebook and Bain & Company provides us with valuable insights into this promising field. The study provides information from nearly 13,000 e-commerce users and suppliers in major markets: Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam; interviewed more than 30 CEOs and venture capitalists in the region to come to a conclusion.

Impressive numbers
Southeast Asia is home to more than 640 million people, recording a 2.8-fold growth from 90 million online consumers in 2015 to 250 million in 2018. Also during this time, the value of e-commerce has increased 7 times from $5.5 billion to $38 billion, surpassing the online travel industry to become the largest Internet economy.

Southeast Asians spend a lot of time online by phone, with 90% of visitors using smartphones as their primary device to connect to the Internet. An online shopper spent an average of $125 annually in 2018, an amount that is considered sizable in these countries. 70 to 80% of these consumers come from the middle class – the result of rising incomes and the boom of the Internet.

Driven by shopping portals like Lazada, Shopee and many startups in other countries, online shopping is gradually becoming a familiar habit of people in Southeast Asia. Sales through promotions are also great sales boosters, as Lazada reports 20 million users shopped on Singles' Day across the six countries it operates in. .

How do customers shop?
Social media platforms continue to be a powerful advertising channel, as more than half of study participants said they learn about new products and brands on social media. Two-thirds of them also enter shopping pages without a specific product in mind. This shows that online shoppers are very open to new offers, as evidenced by the percentage of 40% of customers who have tried out new stores that they have never seen before.

Southeast Asians show a strong preference for omnichannel shopping. The average shopper looks at product information on 3.8 platforms before making a purchase decision. They also pay close attention to prices to compare across platforms, both online and offline, for any item. Price, along with a product's uniqueness, fun, and positive reviews are the three main reasons customers decide to buy.

E-commerce is no longer a platform for high-value items, but has also expanded to low-cost everyday household products such as groceries, clothing and personal care. With a clientele very open to new options, businesses of all sizes and industries have an opportunity to compete. However, a low customer repurchase rate also signals that e-commerce sellers should prioritize loyalty and reward points programs.

Also according to research, customers of loyalty programs are 50% more likely to promote a brand than regular customers. Specifically, they cross-recommend 45% more, shop 25% more often, and spend 25% more on average.

Predicting the future
The number of e-commerce users is expected to reach 310 million by 2025, with each buyer spending $390 annually – triple the current amount. With this prediction, the total gross merchandise volume (GMV) of 2025 will exceed $150 billion, $50 billion higher than the previous estimate (research by Google, Temasek, Bain & Company).

Southeast Asia will also see revolutions in many new areas such as education, healthcare and digitized finance. Online financial services, especially online payments, will grow to $1 trillion by 2025. The wave of the Internet economy, which has been centered on top cities, will also spread to low-end cities. more and rural areas.

There is a lot of potential for Southeast Asian e-commerce to continue to grow. Amid the battle for market share by the major players, consumers across the region have the opportunity to enjoy more value and convenience options. One researcher said: “Brands need to keep up with trends and rethink their marketing and commerce spending to stay in sync with the ever-evolving omnichannel consumer journey. They also need to build new strengths to ensure a positive shopping experience for their online consumers.”