With a population of more than 600 million people, Southeast Asia is often considered as the next ecommerce gold rush. But how big is the potential of eCommerce in Southeast Asia actually? It still has no accurate guess about it.
Southeast Asia’s Ecommerce
However, we can see that the potential is really huge as Southeast Asia is ready to blow up as one of the world’s quickest developing areas for ecommerce webs, surpassing US$25 billion by 2020. In 2015, the market earned US$11 billion despite of a few acquisitions, advertise exits, and numerous online retailers entering the market.
Nevertheless, Frost and Sullivan stays hopeful about the development capability of web-based business in Southeast Asia. Based on the research made by Frost and Sullivan, the report analyzes advertise patterns and openings in 6 key Southeast Asian markets, for example, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam with gauges to 2020.
Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More
Fast development as industry advances
Today, Chinese ecommerce amounts US$700 billion market, making up about 13 percent of the country’s total retail. Malaysia and Thailand were the biggest web-based business showcases in Southeast Asia in 2015, creating incomes of US$2.3 billion and US$2.1 billion separately!
In any case, by 2020, both of these business sectors are required to be obscured by rising economies in Southeast Asia including Vietnam and Indonesia.
Despite the fact that the mass marketing approach has not worked so far in Southeast Asia, there are many opportunities in ecommerce business and P2P ecommerce business. For example, Carousell, LetGo and Shopee are forcefully seeking after a ‘portable’ strategy. If business focus on what Southeast Asia’s consumers would like to purchase, it will be easier to manage them.
Global Investor’s Penetration
It’s not surprising that global investors have targeted Southeast Asia and betting heavy expenditures for Southeast Asia’s future e commerce. Some of the biggest funding is for application GrabTaxi which accepts $550 million and regional marketplace Lazada, which received nearly $500 million.
Japan’s SoftBank, together with Sequoia Capital and SB Pan-Asia Fund, put $100 million in Tokopedia, Indonesia’s biggest online commercial center. The investments are spread across a growing set of players in each segment of the business.
For example, a lot of companies are competing for their share of the “traditional” e-commerce space, while startups are among the players trying to establish a foothold in the financial technology industry. The ranks of competitors in such areas as transport, groceries, logistics and food delivery just keeps growing, too.
Despite Southeast Asia is considered a wonderland for ecommerce business, Southeast Asia is a complex and diverse region encompassing with different languages, cultures and ethnics – which all play an important role in customer’s preference.
These elements somehow will affect businesses trying to grow across Southeast Asia. But as long as you know the trick, you don’t have to worry because Southeast Asia got many visible potentials.
Article by Nabihah Jasri