6 things about Southeast Asia’s growing ecommerce potential

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This article is part of Tech in Asia’s partnership with iPrice Group where we publish the firm’s valuable insights on various ecommerce markets in Asia. For more articles in this series, go here.

With more than 330 million internet users in Southeast Asia, ecommerce in the region is well on track to become a major industry in the coming years. A study by Google indicated that Southeast Asia’s internet economy has reached US$50 billion in 2017, outpacing expectations by 35 percent.

Earlier research estimated that around 3.8 million new users would come online each month in the region. This makes Southeast Asia the fastest growing internet market in the world between 2015 and 2020.

This, combined with a burgeoning young population, rising disposable incomes (all six major countries in the region are expected to break the estimated US$3,000 GDP per capita barrier), greater availability of payment systems, and a lack of available organized retail, will spur the growth of the internet economy, which is estimated to grow to US$200 billion by 2025.

Here are the vital indicators of ecommerce’s potential in the region.

1. Southeast Asia is a mobile-first economy

The average Southeast Asian spends about 3.6 hours using mobile internet every single day. This figure is the highest in the world and makes Southeast Asia the only region with this unique statistic.

In our analysis on the six major cities in the region (i.e. Singapore, Malaysia, Indonesia, Philippines, Vietnam, and Thailand), mobile commerce or “m-commerce” has grown by 19 percent on average and now captures 72 percent of overall web traffic. Leading the pack is Indonesia, which now has a staggering 87 percent share of mobile traffic. Across the region, desktop traffic represents just less than 30 percent of web traffic, indicating the importance of a mobile-friendly platform for ecommerce merchants.

2. Southeast Asians spend a lot of time on online shopping

On average, Southeast Asians spend about 140 minutes shopping online every month. That’s double the time Americans spend on ecommerce.

As the graph shows, shoppers in the region are very likely to shop during working hours. The number of orders is highest between 9 am and 5 pm when people are typically at work or in school. However, it’s different in Singapore, where the peak hour is 10 pm.

3. Ecommerce startups raised nearly US$8 billion in 2017

4. A market’s maturity doesn’t necessarily translate to a higher conversion rate

5. Basket size is closely correlated to the GDP per capita

6. Bank transfer is the most popular payment method across the region