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DELHI, December 16, 2019 – E-commerce can become a driver of growth across South Asia and boost trade between the region’s countries, but its potential remains largely untapped, says a new World Bank report.. 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." Source: iPrice. 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 … Related articles: E-commerce set to dominate the region in 2019. 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. Shopee is the leading e-commerce platform in Southeast Asia and Taiwan. 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. Southeast Asia’s internet economy booming. As the world fights COVID-19 with social distancing and remote work, e-commerce growth has accelerated. Brands Shift Their Focus from Data Gathering to Data Utilization. Gone are the days of aggressive top line growth and market share grabs at all cost. 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. Then, the company began engaging deeper into the e-commerce industry and create a new holdings as one of Southeast Asia’s leading e-commerce integrated service provider. Broad-based economic growth may become a scarcer commodity in 2019, owing to near term macro factors such as global trade tensions and rising interest rate environment. 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. 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. Home food deliveries and entertainment among the leading sectors. The new study titled “Digital Consumers of Tomorrow, Here Today” looks into the rapid acceleration of the digital … 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. 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. The last 10 years have seen the rise of Chinese companies like JD.com and Meituan Dianping. A market’s maturity doesn’t necessarily translate to a higher conversion rate. However, several governments have started to address this issue through regulatory reform and incentives. In Southeast Asia, only 16% of people use debit cards and only 9% have a credit card. In the US, it is 11%. 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. 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. 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. But once the demand is established, you can set up distribution centres closer to the demand. Lazada is also popular because of its vast inventory of foreign goods. 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. As the market matures, it will be worth tracking which companies prove to be persistent leaders. Covid-19 and lockdown boost e-commerce in Southeast Asia The total turnover reached 105 billion for this year. China, the global leader in e-commerce online sales, captures 24% of total retail sales. 5 Vietnamese companies are in the list of 10 e-commerce sites with the highest number of visits in Southeast Asia. Market data powered by FactSet and Web Financial Group. 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. Copyright, Trademark and Patent Information. It was launched in 7 markets in 2015 to connect consumers, sellers, and businesses in the region. The Asia-Pacific ecommerce region (APAC) accounted for 40 per cent of all ecommerce sales across the globe in … See you at the top! Increased volumes also will drive down costs and new regulations eventually will improve traffic conditions. Southeast Asia is a region and not a single market. 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. It is Southeast Asia’s relatively young population and improved access to the Internet on mobile devices that propels the growth in social commerce. 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. Payment innovation has been a major driver of e-commerce adoption, and that has been picked up by Lazada's competitors as well. For now, this means there is a lot of white space for many companies to thrive. 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. In 2018, Google forecasted that Vietnam’s e-commerce by 2025 will reach 43% growth – the highest in the region. While the growth of e-commerce is there, companies trying to capitalise on this growth face some daunting challenges. Shopee also sells its own products directly to consumers on its platform (similar to Amazon's private label brand). This strategy was expensive, but it paid off. The market for e-commerce in the region is growing rapidly because of high levels of overall economic growth and rising internet penetration. The Internet economy in Southeast Asia “hit an inflection point in 2018,” and is likely to be worth $240 billion by 2025, which is $40 billion more than earlier estimates. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Watch: Lazada CEO Li Chun on the development of e-commerce across Southeast Asia 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. Southeast Asia is a region and not a single market. 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.. 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. 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. It has also become a leader in most of its markets in website traffic volume. Southeast Asia is currently a very attractive market for companies involved globally in the e-commerce sector and smaller local players. Despite not heavily monetizing its platform, Shopee generated $639 million in revenue over the last 12 months. 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 … 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 … 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. In 2019, the company introduced seller commissions in Taiwan and may roll out this fee in other markets as they mature. 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." Researches from Statista reflect Indonesia to be the highest growing eCommerce Southeast Asia market forecasted to reach 52% by 2025. Consumer goods manufacturers are leveraging their experience in China to develop a plan to capitalise on this expected growth. The e-commerce market in South East Asia is a … Luis Sanchez CFA has been a contributor to the Motley Fool since 2019. After the dot-com bust, native e-companies have seen promising and fast growth in their sector. 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. Beside, Shopee and Lazada continued to gain market share in the region as both e-commerce platforms saw a double digits growth in visitors. 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. According to SimilarWeb Lazada holds the number two market position in SouthEast Asian commerce. 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.”. 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. As the ecommerce market in Southeast Asia matures and consolidates, marketplaces, e-tailers and ecommerce startups will be increasingly scrutinized for margin growth. 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. Stock Advisor launched in February of 2002. DHL Express Invests EUR750 Million in Asia Pacific on the Back of E-Commerce Growth. The company has made it easier for locals to purchase goods from other Asian countries and provides affordable logistics solutions for cross-border transactions. Jet Commerce is a one-stop e-commerce solution and enabler. The growth of the digital economy has accelerated tremendously in Southeast Asia (SEA). We use "cookies" to collect information. With spreading internet penetration and a regional population of over 500 million people, Southeast Asia has an e-commerce industry that's poised to produce strong financial results for the two companies dominating the market today, Lazada and Sea Limited (NYSE:SE). 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. 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. 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 … 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. 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." E-commerce growth in Southeast Asia is driven by a high mobile internet penetration rate, young consumers and an increase in disposable income. KUALA LUMPUR (Oct 23): Malaysia, with its population of about 30 million people, is an attractive market for e-commerce in Southeast Asia due to its rapid economic growth and advanced digital technology infrastructure.In a report titled "The Next Wave" Emerging Digital Life in South and Southeast Asia released yesterday, Deloitte said the contribution of e-commerce to Malaysia's gross … 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. Unicorns of ASEAN: Lazada × 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. 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. Shopee can't lose money forever. Watch: Lazada CEO Li Chun on the development of e-commerce across Southeast Asia According to a We Are Social Report, in 2018, there were 391 million mobile internet users in Indonesia, Thailand, Malaysia, Singapore, Philippines, and … Let's conquer your financial goals together...faster. 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. Taking a hyper-local approach. ... Sea Limited: Southeast Asia's leader in all things digital sales. However, as GClub observes, the e-commerce platform in South East Asia is changing due to COVID19. Nevertheless, there is an expectation that delivery times will continuously decline. 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. This would indeed have a negative impact towards retail sales, especially for a country that is highly dependent on tourist dollars 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 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. SINGAPORE -- E-commerce retailers across Asia have seen explosive sales growth during the pandemic crisis as consumers under lockdown splurge online. The report also estimates that e-commerce will exceed $100 billion in GMV by 2025, from $23 billion in 2018. 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. Much will depend on each player’s market savvy, speed and creativity in an uncertain and volatile environment. You need to use multi-modes of transport and delivery costs are high. Lazada was already a leading e-commerce platform in the region when Shopee was launched. His investing interests include tech, consumer, and event-driven situations. Our ultimate aim is to empower the e-commerce growth in southeast Asia, through an easy & integrated end-to-end e-commerce … 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. 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. She added that this presents huge opportunities for e-commerce companies. Each country has different e-commerce characteristics and challenges, and the demographics of consumers also differ from market to market. E-commerce has experienced unprecedented growth over the last two decades. Read what are the opportunites and challenges in navigating ASEAN's e-commerce industry today. Click on the ‘Deep Read’ button to read more about how companies are preparing for e-commerce growth in Southeast Asia. Launched today in Delhi, the report Unleashing E-Commerce for South Asian Integration notes that although e-commerce has grown significantly in South Asia, online sales … Among the most … Prodigious growth foreseen for online commerce in Southeast Asia through 2025 This new report Southeast Asia B2C E-Commerce Market 2018 forecasts eight … During recent IMA Asia Management and CEO Forums, participants identified several factors that are stimulating this growth in Southeast Asia. This industry is seeing lots of investment and has great potential to continue being one of the biggest eCommerce economies in Southeast Asia. Lazada and Shopee have taken a regional approach to Southeast Asian e-commerce, but there are many local companies in the individual countries. With regional e-commerce players going all out to battle for leadership in each of their geographical markets, consumers across ASEAN can expect to enjoy more value, choice and convenience. The COVID-19 pandemic has undoubtedly changed the e-commerce industry for good – many retailers have responded by moving their businesses online to better manage risks. And that is very much the Asian model of e-commerce. 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. 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. In order to gain traction, Sea offered free shipping and didn't charge any commissions to use Shopee at first. Traffic congestion remains a huge problem in most of Southeast Asia’s major cities. 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. 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. 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. To spur this growth, the ASEAN Business Club Forum highlights five specific actions that emerging markets in Southeast Asia should take to boost … 2018 We are expanding to more areas in Southeast Asia: Thailand and Vietnam Further plans of … Olay, Shopee to accelerate ecommerce growth in Southeast Asia Thursday 8 October 2020 15:27 CET | News. 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