Southeast Asia’s E Commerce Boom

The region of Southeast Asia consists of eleven nations. Namely Indonesia, Malaysia, Singapore, Thailand, Vietnam, Cambodia, Laos, Myanmar, Philippines, Brunei as well as Timor Leste. Often enough, Southeast Asia has long been and is still considered as a developing economy. However, the potential of this resource rich region can no longer be ignored.

The ten countries that make up ASEAN. By 2050, this market is expected to be of the same size as Europe, with Indonesia becoming the fourth largest economy in the world

To begin with, Southeast Asia has a population of more than 600 million. The region has been experiencing a surge in population growth where by 2050, the market size for the Association of Southeast Asian Nations (ASEAN), which is an association of ten Southeast Asian nations, could potentially eclipse that of Europe. Furthermore, the Indonesian economy is predicted to go on to become the fourth largest economy in the world, right after China, India as well as the United States.

While this may only occur in about thirty years time, some of the effects can already be seen and felt all across Southeast Asia.  In particular, the electronic commerce (e commerce) market has been facing an exponential level of growth.

The combined Gross Domestic Product (GDP) of ASEAN in 2013 stands at 2.4 trillion US Dollars, making it the seventh largest economy, just behind the United Kingdom at 2.5 trillion US Dollars.

Real GDP growth of ASEAN has been at 5 percent from 2000 to 2013, only lagging behind China and India’s 10 and 7 percent respectively.

The e Commerce Market In Southeast Asia

In 2015, the e commerce market of the region was valued at 5.5 billion  US Dollars. This figure is set change by the year 2025, to approximately 88 billion US Dollars. This is a growth of over 80 billion dollars in a short span of just ten years.

While most of the e commerce transactions in Asia could be attributed to sales to larger and mature markets like China, Japan and South Korea,  the next region to experience surge in growth is Southeast Asia.

Reasons For Growth

Two main factors stand out when analysing the causes  for the spike in growth. They are a growing middle class as well as increase in internet access. According to projections, the middle class population in ASEAN could double to 400 million by 2020.

The number of people in ASEAN having access to the internet could triple to about 600 million by the year 2025

On the other hand, approximately 200 million people in Southeast Asia have internet access, which is about a third of the current population. This figure is expected to triple to 600 million in 2025, indicating that majority of Southeast Asian population would have some sort of an access to the internet.

The growth has not gone unnoticed by investors. For instance, Alibaba from China is exploring opportunities in the region. It is rumoured that the Chinese e commerce giant would invest in Indonesian e commerce marketplace, Tokopedia. It has also increased its total stake to ninety-five percent in Singapore based Lazada, another e commerce venture.

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