Current Online Retail Landscape in Southeast Asia

In January 2024, GLOBAL ANGLE formed a business partnership with AUN CONSULTING, Inc for digital marketing. Leveraging local human resources (particularly local digital marketers) will enable GLOBAL ANGLE to capitalise on its strength while tapping into AUN, CONSULTING Inc’s expertise in global digital marketing services.

This collaboration will enhance AUN CONSULTING, Inc’s ability to deliver precise information in its client’s target markets and enable the provision of digital marketing and online advertising services by leveraging the local expertise of digital marketing professionals.

Read the press release article of GLOBAL ANGLE’s and AUN CONSULTING, Inc’s collaboration.

China is well-known as the most e-commerce-oriented country in Asia. Apart from China, Southeast Asian countries have been rapidly growing their online retail market due to the pandemic. In each country, the percentage of online apparel and beauty sectors exceeds 10%, and such brands have established their official stores on major e-commerce platforms.

Explore the key factors that led to our partnership with AUN CONSULTING, Inc:

• The rising trends surrounding Southeast Asia’s online retail environment, particularly on E-commerce
• The growing significance of digital marketing and its landscape, which includes E-commerce

E-Commerce Model Classification

Penetration of social commerce, live commerce, and C2C

Southeast Asia’s E-commerce structure is mainly centred around B2C, followed by C2C or B2B channels. Southeast Asia’s e-commerce market focuses on the marketplace model, where merchants sell their own inventory and delivery directly to users. This is in contrast to e-retailing, where e-commerce platforms sell their own inventory. The Southeast Asian marketplace model is assumed to account for approximately 5-10% of the total E-commerce space, with expectations to grow in the future.

As social commerce and live commerce rely on the level of influence that each individual seller possesses, they are highly compatible with Key Opinion Leaders (KOLs) and influencers. Even though it is not mainstream yet for companies and brands worldwide to sell directly through social and live commerce, having a brand store as a touchpoint with users in major e-commerce and live commerce will become essential in the future. 

To reach a wide range of consumers in Southeast Asia, having touchpoints on Shopee, Lazada, TikTok, Facebook and/or Instagram is recommended.

[Slide 1: Major E-Commerce Players in Southeast Asia and India/China]

[Slide 2: Types of Social Commerce]

[Slide 3: Live commerce: A sales event carried out by a well-known cosmetic brand]

[Slide 4: The food category, which has a low e-commerce rate, also has a brand store and is sold in bulk online]

E-Commerce Market Size and Major Players in Each Southeast Asian Country

E-Commerce Penetration Rates

Indonesia ranks second in E-commerce rates in the retail sector in Asia, trailing behind China. Thailand and Singapore follow closely with E-commerce rates surpassing 15% (indicated on slide 5). Moreover, if Vietnam and the Philippines, both with populations exceeding 100 million, grow to have E-commerce rates above 15% in the future, their E-commerce market size is expected to exceed that of Thailand’s.

[Slide 5: E-Commerce market size and E-Commerce conversion rate]

While China and India are dominated by their own local E-Commerce, Southeast Asia presents a different story. Southeast Asia is well known to be dominated by Sea (which owns Shopee) and the Alibaba Group (which owns Lazada). However, local E-Commerce companies in each specific country, such as Gojek and Tokopedia in Indonesia and Tiki in Vietnam, also have a considerable presence. Consequently, due consideration should be given to local E-Commerce companies operating in non-English speaking countries.

[Slide 6: E-Commerce market share ranking by country and company]

Digital Advertising and Media

As E-commerce rates increase, ad spending by media has naturally begun to gravitate towards the digital format. In Southeast Asia, digital spending has exceeded 40% in all countries. Noticeably, in Malaysia, the Philippines, and Singapore, the rate has exceeded 60%.

E-Commerce conversion rate growth by segment (by each Southeast Asian country)

E-commerce rates across apparel, consumer electronics, home care, snacks & beverages, and beauty & personal care categories were analysed per country. The apparel category consistently demonstrates a notably high e-commerce rate in every country. Following apparel, beauty & personal care exhibit relatively high E-commerce rates, whereas snacks & beverages, easily accessible in convenience stores and supermarkets, generally show lower E-commerce rates.

[Slide 7: E-Commerce Penetration Rate]

Summary

In Southeast Asia, O2O initiatives for both offline and online retailing are important. However, a digital presence in product categories such as consumer goods, is essential.E-commerce, live and social commerce are highly effective in quick sales. In these instances, the traditional customer journey can be omitted and a more direct approach to the individual consumer is possible. However, in the initial phase of the customer journey where consumers seek motivations for purchase, it is crucial to establish touchpoints across E-commerce, social media, and live commerce platforms.