Southeast Asia will welcome 350 million online shoppers by the end of 2021, up from 310 million last year. Online spending is also expected to increase by 60% per person this year, pushing total e-commerce sales to double to $ 254 billion in gross value of goods (GMV) by 2026.
The average consumer in the region is estimated to spend $ 381 online this year, up from $ 238 last year. That figure is also expected to reach $ 671 in 2026, according to the fourth iteration of an annual study conducted by Bain & Company and commissioned by Facebook. The survey interviewed 16,706 consumers in six Southeast Asian markets, including Singapore, Indonesia, the Philippines, Thailand and Vietnam.
The region’s e-commerce GMV is estimated to reach $ 132 billion by the end of this year, 1.8 times higher than last year’s $ 75 billion, according to the report. The study respondents were aged 15 and older and had made an online purchase in at least two product categories in the past three months, including electronics, housewares and clothing. Some 30 million online shoppers have been added in the past year alone.
Online retail is estimated to represent 9% of overall retail by the end of 2021, up from 5% last year. Some 85% of the region’s internet population were also shoppers, which was above 20% for India and just below 90% for China.
With 350 million online shoppers in Southeast Asia, 78% of the region’s population, or 448 million in total, would spend on digital by the end of the year. More than 95% have accessed the internet through their smartphones, according to the report, which estimates that there will be 380 million online shoppers in Southeast Asia by 2026.
Some 45% of them chose the Internet as their primary shopping channel, and 65% of them admitted that they didn’t know what they wanted to buy when they browsed. About 80% went online to find potential purchases, while 83% used online platforms to gather more information about products and services.
On average, digital shoppers visited 7.9 websites before making their purchase, up from 5.2 last year. In Singapore, that figure reached 6.2 websites this year.
In Southeast Asia, 92% said they were willing to pay more for sustainable and socially responsible products, of which at least 80% said they would pay up to 10% more to do so. Additionally, consumers shopped online in 8.1 product categories on average, up from 5.1 last year.
The report also found that respondents were likely to maintain their home lifestyle beyond the global pandemic, with 72% noting that their time “at home” would remain unchanged, spending 75% of their time shopping. online from home.
Benjamin Joe, Facebook’s vice president for Southeast Asia and Emerging Markets, said the pandemic not only pushed people online at an accelerated pace, but also prompted consumers to establish new habits. for online discovery, evaluation and shopping.
This underscored the need for brands to refine their strategy to better engage consumers throughout the buying journey, Joe said at a virtual press conference on Tuesday.
Praneeth Yendamuri, partner at Bain & Company, noted that this cut across multiple industries, including fintech and e-learning, as more and more of the region turned to digital channels for all of their day-to-day needs and development. lifestyle.
He noted that 67% of digital consumers in Southeast Asia were using fintech for the first time since the COVID-19 outbreak, fueled largely by competitive prices and a rich user experience, among others. In addition, 45% of those surveyed between the ages of 16 and 25 have also used online platforms for e-learning purposes, while 79% have used digital health services for the first time.
To better engage online shoppers, Yendamuri suggested that brands and organizations “rewrite” their multi-year digital prioritization and consumer engagement strategies. These should encompass cross-selling opportunities in an omnichannel consumer journey. They would also need to update their product offerings and diversify their portfolio, adjusting prices dynamically.
He added that organizations would need to realign themselves to the new standard, designing their products and services to meet the increased emphasis on “at home”.
E-commerce players, in particular, are expected to expand their product line and vendor networks, as well as improve platform awareness and product discovery.
When asked if the increase in online scams and regulations could hamper the future growth of online business, Joe noted that Facebook is working with the governments of the respective markets to ensure that the media platform social media was “safe” for its users and that scams were eliminated.
He added that digital literacy and user education were key to driving such efforts, and Facebook was working with governments to equip users with the digital skills needed to prevent online scams.
He noted that the new regulations in the region come as no surprise as the pandemic has fueled people’s dependence and activities on digital platforms. In particular, social commerce had emerged to provide a source of income for small businesses.
According to the study, 21% of online purchases were made from social commerce sites while e-commerce marketplaces accounted for 32% of online purchases.
Joe said Facebook welcomes regulations aimed at fostering online community spirit and supporting the digital boom in Southeast Asia.
China introduced a new mandate this week limiting local residents, aged 18 and under, to three hours of online gaming per week, or one hour each on Fridays, Saturdays and Sundays as well as holidays.