5 ecommerce trends to look out for in Southeast Asia in 2019

Ecommerce in Southeast Asia last year certainly blew many forecasts out of the water, including the one from Google and Temasek’s e-Conomy SEA 2018 report.

But as 2019 begins, a new set of predictions come to play. Here’s what to expect from the ecommerce sector this year, according to experts.

The most exciting countries for ecommerce

Analysts Tech in Asia talked to are thrilled about the growth prospects of Indonesia and Vietnam.

Data from market research firm Forrester shows that Indonesia booked US$7.6 billion in online retail sales last year, accounting for 41 percent of the tally in Southeast Asia. Vietnam came in second, with retail sales amounting to US$2.8 billion.

Photo credit: Forrester

Santitarn Sathirathai, group chief economist of Singapore-based internet company Sea, calls Indonesia “the most exciting” market. There’s enough reason for him to believe this: based on data generated during Sea-backed Shopee’s 12.12 event, 5.4 million of the total 12 million orders placed on the ecommerce platform within that period came from Indonesia alone.

This is supported by software firm Meltwater’s holiday report, which found that Indonesia accounted for 57 percent of online conversations about sale days like Singles’ Day and Black Friday. In contrast, Singapore only accounted for 1.2 percent of social engagement.

Photo credit: Meltwater

Simon Wintels, a partner at consulting giant McKinsey & Company, also bets on Indonesia. His research projects an eightfold growth in Indonesia’s ecommerce sector from 2017 to 2022, leaping from US$8 billion of sales to roughly US$55 billion to US$65 billion.

He also thinks that Vietnam is exciting. “[The country is] getting to a point where ecommerce is already quite big, and logistical challenges are still, as in Indonesia, challenging.”

But Matthew Doull, managing director of investment banking advisor BDA Partners, argues that Vietnam will pull ahead in 2019. He cites a host of factors: More than being young, the Vietnamese population is earning more. A government report released in October said that the average monthly wages in the country went up by over 10 percent in 2017. This means that consumers have gained purchasing power, making them targets of ecommerce sites.

Doull also notes that geographically, Vietnam’s landscape is easier to contend with, as it’s one continuous territory as opposed to Indonesia’s fragmented islands. He points out that Indonesians in rural areas would find it tough to participate in ecommerce. “[Indonesia is] a potentially bigger market than Vietnam, but I think that the tier-two cities in the countryside of Vietnam will participate more quickly in the booming and growing economy than the tier-two cities or rural areas of Indonesia,” he says.

More entertainment experiences to engage users

Offline retail has begun offering more experiential services such as cashierless stores and augmented reality. Ecommerce is following suit – a trend that became more obvious in 2018.

Deepening relationships with sellers

Digital payments are still a problem

China is opening up and reaching out