The Southeast Asia’s e-commerce economy

Koo Maldives

Southeast Asia has been the fastest growing internet community in the region with an estimate of 3.8 million new users going online each month between 2015 and 2020.

The region’s 330 million user market is set to grow to 480 million users by 2020. The rapid growth will the by the expansion of technological infrastructures which in turn support internet and mobile connections. Hence, the increased digital population will help digital business expansions to the and so attracting more and more businesses which will enhance the e-commerce sector to grow rapidly. The e-commerce industry was worth USD 50 billion in 2017 while it is estimated to reach USD 200 billion by 2025.

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The revenue of the industry has also been growing at a rapid rate where it grew from USD 5.5 billion in 2015 to USD 10.9 billion in 2017 while it is estimated to be valued at USD 88.1 billion by 2025 with an annual growth rate of 41%. Customers in Singapore spend the most by buying baskets valued at USD 91 while Vietnam customers spend USD 23 which is the least among the countries in the region. This result the by the fact that countries with higher GDP tend to spend more while other spend less where Singapore had the highest GDP at USD 90,000 while the GDP Vietnam is just USD 6000 which is the lowest in the region.

Jakarta, Capital city of Indonesia

Southeast Asian Countries including Indonesia, Philippines, Vietnam, Thailand, Malaysia and Singapore have been analyzed where Indonesia tops the list with an estimate to have 215 million internet users by 2020 followed by the Philippines with 93 million users estimated for 2020 while Singapore is estimated to have just 6 million by 2020 which is the lowest among the analyzed countries. The users in the region spend an average of 3.6 hours on the internet daily. Moreover, over 141% of the region is connected to the internet which is higher compared to the global average of 112%.

In addition, online merchants have also offered payment solutions where they offer payment by credit card, bank transfers while some also accept cash on delivery. The rapid growth of the industry has also brought major changes such as huge investments and acquisitions. Such as Alibaba had invested USD 4.7 billion to acquire Lazada and USD 1.3 billion on Tokopedia while Access industries invested USD 238 million on Zalora. Some of the notable acquisitions include Alibaba took over Lazada, Carousell acquired Caarly and Fave acquired Groupon Malaysia.

Moreover, several e-commerce innovations have also been introduced such as ‘Check Me Out’ allowing businesses to give payment options for customers while ‘ShippingCart’ helps in cross-border delivery as well while orders can be shipped directly to doorstep. Lastly, Xpost was also developed where the sellers can leave the package at any Quadx kiosk which will then be delivered to their buyers. The Maldives also has an online market where thousands of products are sold through facebook pages as well as iBay Maldives which is the first Maldivian online marketplace and as a new online marketplace which are unfortunately not yet designed to accept online payments and hence payment are accepted on delivery.

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