How ecommerce firms in SEA can survive the downturn

Post-Covid developments continue to have a significant impact on Southeast Asia’s ecommerce landscape.

After a period of accelerated ecommerce adoption, fueled by online discounts and limited offline shopping options, online sales slowed as Covid-19 cases tapered off. Consumers shifted partly to offline shopping as lockdowns and travel restrictions were lifted.

Image credit: Timmy Loen

I see this as a temporary correction for the ecommerce adoption spike during the pandemic. Driven by macroeconomic factors, the sector will normalize to its longer-term adoption rate and growth, with a forecast of 17% compound annual growth rate (CAGR) from 2022 to 2025.

Here’s a better look at how this will affect consumer brands in ecommerce going forward.

What’s next for brands?

Many consumer goods companies have matrix organizations that evolve with time. They typically swing between being product led and market led (in terms of geography) and centralized versus localized.

In 2022, many brands did not achieve their online sales targets in different countries and are shifting from a localized strategy to a more centralized regional approach. I see that as part of this regional approach across Southeast Asia or even the Asia Pacific, brand leaders are aiming to achieve the following:

1. Streamline at SEA level

As brand organizations become more regionally driven, I see a strong push to streamline by reducing the number of external partners firms have. Instead, brands want to find partners that can offer multiple services, for example, one company that offers both marketing resources and analytics support.

Streamlining is instrumental for aligning approach, quality control, and consistency across all business performance metrics. Brands are looking for partners from multiple countries offering end-to-end services under one roof to achieve the most streamlined go-to-market.

2. Drive optimization via tech and data

Brands that fully capitalize on advanced tech solutions can become more efficient by using automation in inventory, chat support, price syncing, and more. As brands invest in market intelligence solutions, they can better understand key category trends and their performance in comparison to competitors.

For instance, being able to track competitors’ commercial strategy can help brands fine tune their assortment and commercial strategy to drive faster growth at better margins.

3. Invest in long-term brand building

What’s next for the industry?