The eCommerce industry is on the rise in Southeast Asia, and it is expected to continue to grow in the years to come. The region has become an attractive market for eCommerce players due to the rise in Internet penetration, young and tech-savvy population, and a growing middle-class population. As Southeast Asia’s digital economy is forecasted to reach 363 billion U.S. dollars by 2025, this presents a golden opportunity for eCommerce to thrive. Based on eMarketer’s report on the fastest-growing eCommerce markets worldwide, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are listed in the top 10.
In this article, we will discuss those five countries’ populations, eCommerce revenue, top marketplaces, and product categories.
With a population of around 274 million, this indicates it is the largest eCommerce market in Southeast Asia. In 2021, Indonesia recorded a staggering amount of $43.4 billion in sales and an impressive year-over-year growth of 32%. Furthermore, the country's top marketplaces include Tokopedia, Shopee, JD, and Lazada, with electronics and furniture being the leading product categories. Indonesian population is Muslim, which makes it a promising market for Halal goods and services that have yet to be fully explored. Additionally, Tokopedia and Bukalapak, two prominent Indonesian-based eCommerce sites, are making strides in the local market and expanding their reach across the region.
With a population of approximately 34 million people, Malaysia experienced a 15% increase in eCommerce sales in 2021, totalling $6.3 billion. The two most frequented marketplaces in Malaysia are Shopee and PGMall, which collaborates with JD. Electronics and fashion items are the most sought-after goods in this multi-racial country. Moreover, social media penetration is 91.7%, creating a lucrative opportunity for SMEs to get onto the social commerce bandwagon. Combined with Singapore, they make up nearly half of the cross-border eCommerce market.
In 2021, this country with a population of 71 million recorded $10.5 billion in eCommerce revenue, a staggering 28% increase from the previous year. JD, Shopee, and Lazada with electronics and personal care being the top-selling product categories. Not only is Thailand's eCommerce sector flourishing, but it's also the fastest-growing travel market in Southeast Asia, with a value of over $4 billion USD in 2018. To promote Internet connectivity in each village, the government has also implemented the Thailand 4.0 policy, which aims to promote digital literacy among the Thai population in both urban and rural areas. Additionally, over half of the Thai shoppers rely on influencer recommendations for their purchasing decisions, which indicates the importance of influencer marketing.
With a population of 98 million people and a staggering $8 billion in eCommerce revenue in 2021 – a 24% increase from 2020, Vietnam's eCommerce industry continues to be on the rise. Shopee and two local providers, The Gioi Di Dong and Dien May Xanh, are the leading marketplaces in Vietnam, with the electronics and fashion categories dominating the Vietnamese eCommerce market like Malaysia. Furthermore, Vietnam is an emerging player in the cross-border eCommerce industry, thus presenting immense potential for the introduction of innovative and niche products into the market.
The Philippines, with a population of 112.7 million, presents an untapped eCommerce market with revenue estimates going as high as $12 billion in 2021, according to Statista. The Philippines Department of Trade and Industry (DTI) discovered that eCommerce as well as the digital economy are the main contributors to this spike. The introduction of the Philippines E-Commerce Roadmap 2022 which aims to drive industrial development and employment, coupled with the rise in the usage of the Internet, digital payments and mobile devices, puts the Philippines as one of the appealing markets for eCommerce. The leading eCommerce platforms, Shopee and Lazada, offer consumers access to popularly sought products, such as electronics, fashion products, home appliances, health supplements, and food and beverages. Despite a low Internet penetration rate of 68% compared to other Southeast Asian countries, Filipinos spend an average of 4 hours and 8 minutes daily on social media. Like Vietnam, The Philippines also shows an optimistic condition for cross-border commerce and innovative and niche products for market penetration.
It's clear that the eCommerce industry in Southeast Asia is thriving, and the top 5 markets discussed above show immense potential for growth. The region's young and tech-savvy population, increasing rates of Internet usage and expanding middle-class demographic make it a highly desirable market for eCommerce companies. This presents a distinct prospect for eCommerce businesses to broaden their reach and access previously untapped markets in each country. As the eCommerce industry in Southeast Asia continues to evolve, it's exciting to see what the future holds for these markets and the businesses operating within them.