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News Release


Southeast Asia has its finger on the button for online shopping



Vietnam, 17 August 2017Southeast Asia is fast becoming a region of online shoppers.

As more people choose to shop from the comfort of their computers – or mobile phones – the battle lines between online retailers​ are being continuously redrawn as the big players look to build their presence and new entrants join the fray.

E-tail giant Alibaba has a​lready begun to make significant inroads. It increased its stake in Southeast Asia's homegrown e-commerce​ site Lazada from 51 percent to 83 percent. It also setting a regional logistics​ hub in Malaysia by end 2019 that will function as a centralized customs clearance, warehousing and fulfilment facility for Malaysia and the wider region to deliver faster clearance for imports and exports.

Fellow Chinese rival is entering via Indonesia and Thailand. It is reportedly in talks with Indonesia's Tokopedia, one of Indonesia's largest online marketplaces, and has announced it is expanding into Thailand at the end of the year.

Elsewhere, U.S. behemoth Amazon made its move by launching in Singapore last month and currently occupies a warehouse of nearly 100,000 square feet in the western end of the island state while home-grown start-up, Sea, is focusing on its ecommerce site Shoppee following a fresh round of funding.

New opportunities meet new challenges

It's no surprise that the competition is heating up rapidly, says Regina Lim, Head of Capital Markets Research, Southeast Asia. And it's more than just the demographics of an increasingly affluent and tech-savvy middle class at play. A report by Google and Temasek reveals that internet usage in Southeast Asia is growing at 124,000 new users per day while ecommerce is likely to grow at around 32 percent annually to reach US$88 billion by 2025.

The developing ecommerce battle is just the tip of the iceberg for online retail in Southeast Asia, which is a very diverse region. There will be competition over payments as the region's consumers still have a strong preference for cash on delivery over credit cards while customers prefer to pick up orders rather than get home delivery. Lim expects to see strong demand for community malls in Southeast Asia in the next few years given this consumption pattern.

But despite the willingness of consumers to embrace online shopping, the digital infrastructure remains an issue for many countries, especially outside of the big cities. Other obstacles include regulations and red tape dealing with factors such as customs and shipping, which slows down cross-border transactions.