Southeast Asia’s eCommerce Market in 3 Words: Growth, Social and Mobile

TMO Group TMO Group

Operating a successful eCommerce business in China and ready for your next step? Well, stay close by because the Southeast Asian (SEA) Region is booming. Google and Temasek’s e-Conomy SEA Spotlight 2017 report predicts Southeast Asia’s internet economy to reach 200 billion USD by 2025. Online travel, eCommerce, and online media will primarily drive this development. Want to make sure you do not miss any opportunities? Keep on reading because we will map out the Southeast Asia eCommerce market below. From its consumers, distribution and logistics, payment methods as well as marketing and social media.

southeast asia ecommerce market size

The annual growth rate of Southeast Asia eCommerce (32%) will far exceed the growth rate of offline retail sales (7%). Like China and the further East Asia region, a large part of this growth is propelled by mobile. Google and Temasek estimated 330 million monthly active internet users by year-end 2017.

southeast asia ecommerce users

The trend continues this year, not only in Asia but worldwide. We Are Social and Hootsuite’s Digital in 2018 report states that almost 1 million people started using social media for the first time every day in the past year. That means more than 11 new users every second. Globally, the number of people using social media has grown 13%. Central and South Asia recorded the fastest gains, up 90% and 33% respectively.

Southeast Asia eCommerce Trends and Developments

eCommerce is a mobile-first economy in the SEA Region. Mobile traffic increased with an average of 19% in 2017 and in no SEA country does desktop traffic account for more than 30% of web traffic. An increasing percentage of consumers also use social media to purchase their goods or services.

Looking at the demographics, more than half of the SEA population is a millennial and 70% under 40. The retail space per capita is also extremely low, which means limited access to offline stores and products. Thus, there is a lot of interest and willingness to shop online. At the same time, we see that omnichannel and online to offline (O2O) are emerging trends. Customers want to see or feel products before they buy them.

All in all, it is clear that Southeast Asia’s eCommerce sector is developing at rapid speed. Success requires the ability to act quickly. Innovation is not only required for product development, but also in handling customer interactions and new channels. Agility and flexibility are crucial to get products out into the marketplace – or quickly pull the plug if necessary.

Besides these broad trends, we take a look at 2 key metrics: basket size and conversion rate.

The Value of Basket Sizes

A key metric for eCommerce operators, basket size measures the average total amount that customers spent for every order over a defined period of time. It should thus come at no surprise that these numbers greatly vary per country – they relate to the GDP per capita.

southeast asia ecommerce market devices

iPrice’s research in 2017 shows that Singapore, having the highest GDP per capita (90.530 USD), scored the highest with an average basket size of 91 USD. This is 3 times higher the basket size of Vietnam (23 USD) who has the lowest GDP per capita at 6.880 USD.

According to iPrice, lower basket sizes make it harder to achieve sustainable profitability. Furthermore, their research also shows that SEA consumers consistently buy bigger on desktop in comparison to mobile. This is consistent with the worldwide trend. For example, Shopify reported that 67% of 2017’s holiday shopping took place on desktop and only 23% via mobile.

Developing Mobile Conversion Rates

Not only are desktop purchases worth more, the conversion rate is also much higher. Though mobile is bringing in the most traffic to eCommerce sites in SEA countries, the total conversion rate of desktop is 137% higher.conversion rate southeast asia ecommerce

However, the time is ripe for change. With payment methods, distribution and logistics improving, these numbers may well be reversed in the near future. eMarketer reported: “Mcommerce sales in Asia-Pacific totaled 1.027 trillion USD in 2017, a 41.9% increase over 2016, accounting for 76.1% of retail ecommerce sales.”

For eCommerce companies, this suggests that mobile experience still has a lot of room to grow in order to increase conversion rates. And experience is one of the buzzwords for retail and eCommerce in this year. KPMGstated earlier this year: “Successful retailing in 2018 comes down to obsessing about customer experience. Essential to achieving this is digital and physical touchpoints working together seamlessly.”

Key Aspects of Southeast Asia eCommerce

Below we will sketch out the following topics in more detail: consumers, distribution and logistics, payment methodsmarketing and social media.


Southeast Asian consumers are highly price sensitive and value discounts, as well as the cost-effectiveness of products. They also pay attention to the sales service level, distribution and logistics.

Another important factor for consumers in the region is brand trust. Because fake products or fraudulent merchants are quite common, a lot of value is attached to personal recommendations. Like China and other countries in the region, this will directly influence a decision to purchase something.

Looking at peaks in online shopping throughout the week, the number of orders is the highest between 9:00 and 17:00. Consistently across countries, there is a dip between 17:00 and 19:00, were people typically commute and have dinner, before getting back into online shopping until 23:00.

shopping times southeast asia ecommerceAs to the days of the week, eCommerce merchants suffer a dip of up to 30% of their conversion rate over the weekend. The main factor contributing to the dip in conversion rate on the weekend is, not surprisingly, the large increase in the percentage of mobile usage. Another consistent trend is the peak conversion rate on Wednesday, up on average between 4% and 15% from the average weekly conversion rate.

shopping days southeast asia ecommerce

Distribution and Logistics

Logistics is one of the biggest challenges for the SEA region to tackle. Important factors are the lack of logistics experience in new markets, challenging geography, personnel management and Cash on Delivery (COD). Because a large part of the region exists of island archipelagos, there is no unified infrastructure and often a backward traffic environment.

Tham Siew Yean and Sanchita Basu Das write in their recent paper that “the incentives and priority to develop efficient infrastructure also differ according to population size and neighbouring economies. For example, logistics in Indonesia, the Philippines and Vietnam — the three most populous countries in ASEAN — need to serve a much greater population than smaller countries like Brunei, Singapore and Laos. Countries like Malaysia and Thailand see more benefits from cross-border seamless logistics as they have land connectivity with big economies like China and India. Hence, a regionwide efficient logistics system that can support economic integration can be difficult to achieve.”

Logistics Developments

The SEA countries are tackling this challenge in their own ways. Singapore, as the most mature eCommerce market in the region, already has a relatively complete logistics network. Its well-known postal service SingPost already earns 26% of its revenue through eCommerce related services. They also established a 24 hours warehousing network in many countries within the region.

singpost southeast asia ecommerce

Indonesia’s main challenge is last-mile delivery. Express delivery service company JNE is the most well-known and it technically services the entire country. It still lacks in on-time delivery and accurate tracking, but remains the main player in Indonesia for now.

jne southeast asia ecommerce

Philippine players lack experience in delivering small eCommerce packages, being more used to high-volume freight services. These challenges are only larger since they are an island nation which increases logistics costs and delivery difficulties.

ninja van southeast asia ecommerceBy far the country with the least basic logistics facilities is Malaysia. Especially last-mile delivery is difficult, with companies like POSMalaysia, NationwideExpress and SkyNet lagging behind in the use of new technologies. However, there are improvements, often by foreign players. A promising one is Ninja Van which launched in 2014.

It currently has a presence in Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam. They use algorithms to provide the best delivery routes, allowing their delivery staff to bring items to their intended recipients within the shortest possible time.

Payment Methods

Fragmented is the keyword for the payment situation in Southeast Asia. Except for Singapore, credit and debit card penetration is low, and they are far from the most popular ways to make an online purchase. Instead, there is a dizzying array of online banking, ewallet, ATM, and cash-based payment methods.

payment methods southeast asia ecommerce

Although penetration is low in all other SEA countries, credit card is the undisputed king in Singapore. Consumers even tend to have multiple cards for online purchases. In comparison, Malaysia also has a slightly higher credit card usage.

Cash on Delivery (COD) is offered by more than 80% of the players in both Vietnam and Philippines. Cash-based payments are also still predominant in Indonesia, although mobile payments are predicted to grow in coming years.

Bank transfer is another very popular payment method across SEA, with respectively 94%, 86% and 79% of merchants in Indonesia, Vietnam and Thailand offering it.

In Thailand and Vietnam, almost 50% of merchants offer offline point of sales. This means that consumers pick up their purchases at an offline destination, for example a 7-ELEVEN convenience store.

Payment by installments proves to be very popular (and increasing) in both Vietnam (47% of merchants) and Indonesia (42%)

Marketing and Social Media

Finally, we take a look at marketing and social media in the region. Overall, Facebook is the ruling social media platform across all countries. Brands in this region need to consider how this platform can build up their image. More than 240 million Southeast Asian users get their news and life updates through the social network. According to WeAreSocial’s 2017 official data, there are 126 million Facebook users in Indonesia and 57 million in Thailand. Worldwide, they rank fourth and eighth worldwide.


Indonesians are also the most active on Instagram in the Asia-Pacific region. In 2017, there were 45 million monthly users up from only 22 million in 2016. 32.5% of the time spent online is used for social media. Mobile phones are used 3 times as much as laptops, and 4 times as much as tablets and desktops to access social media. In the future this will also bring huge potential business opportunities for mobile shopping malls.indonesia device usage methods southeast asia ecommerce


After its high Facebook usage, Thailand’s favourite social media are Line, Instagram and Twitter, with Thailand being Line’s largest overseas market. 93% of Thai Internet users access social networks via their smartphones, and the average age of most users is under 40 years. For the other age groups, distribution is mostly evenly with 6-19 years old at 6.9%, 20-29 years old at 7.5% and 30-39 at 6.3%.

thailand southeast asia ecommerce


Facebook, Instagram, and Twitter are the most popular social media in Singapore. In addition, WeChat ranked sixth, accounting for 38%. 71% of middle-to-high income people access social media via their smartphones. 90% of users use social media and 71% use social media at least every day.

singapore social media use southeast asia ecommerce


In Vietnam, almost everyone uses Facebook and it is certainly the most popular platform. However, Zalo from a Vietnamese technology company, also has a solid user base. They are more popular than Whatsapp and other international social media such as Instagram and Twitter. Instagram reportedly had the largest gender gap, with 54% women and only 43% men. According to a Nielsen survey, 23.5 million of the Facebook users in Vietnam were urban (accounting for 51.08%) and 22.5 million were rural users (48.92%).

vietnam social media platforms southeast asia ecommerce

eCommerce Market Localisation

Interested to capitalise on eCommerce opportunities in worldwide markets? At TMO Group, we provide crucial services for your eBusiness success such as: eCommerce Consultancy and StrategyUX / UI DesigneCommerce Website Development or Cloud Hosting and Support.

Specifically interested in one Southeast Asian market, or those of China or Italy? You also might be interested in our ResourceseCommerce Market Localization Guides, which include in-depth guides to some exciting markets. The guides are based on our 20+ years of experience and composed by our team of eCommerce market researchers. Each also offers a free Starter Guide for those who aren’t ready to make a stronger commitment.


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