was successfully added to your cart.

Southeast Asia will be the next major boom market for e-commerce in Asia-Pacific (APAC), Marc Woo, Google’s head of e-commerce, travel, and financial services, told the Bangkok Post recently.

APAC accounted for 40% of global e-commerce sales in Q1 2017, but the vast majority of those sales went to larger or more mature markets in the region, particularly China, but also Japan, Australia, South Korea, and India. That leaves Southeast Asia as the next frontier for e-commerce in the region, Woo said.

Image Courtesy Venue Magz.

Image Courtesy Venue Magz.

Chart Courtesy Business Insider Intelligence.

Chart Courtesy Business Insider Intelligence.

Two critical factors — a growing middle class and rapidly expanding internet access — are positive indicators for fast-paced e-commerce growth in Southeast Asia in the coming years:

The middle class population of ASEAN — an association of 10 Southeast Asian nations — will reach 400 million in 2020, up from 190 million in 2012, according to Nielsen projections.

Meanwhile, internet access has been expanding at a torrid pace — 130 million people in the region now have smartphones, Woo said. Altogether, he added, about 200 million people in Southeast Asia have some form of internet access, and that will triple to 600 million by 2025.

Recent research by Google and investment firm Temasek Holdings predicts that e-commerce sales in the region will grow at a 32% CAGR from $5.5 billion in 2015 to $88 billion in 2025, when they will make up 6% of total retail sales.

This promise of fast growth has lured China’s two e-commerce giants — Alibaba and JD.com — to explore opportunities in Southeast Asian countries. JD.com executives recently hinted that the company is looking to expand geographically outside of China, and it’s rumored to be considering an investment in Indonesian e-commerce company Tokopedia. Meanwhile, Alibaba paid $1 billion last year for a controlling stake in Singapore-based Lazada, which owns a portfolio of popular e-commerce sites across the region.

Infographic Chart Courtesy Baynote.

Infographic Chart Courtesy Baynote.

In addition, Alibaba is working to set up a “digital free-trade zone” in Malaysia, and has signed a Memorandum of Understanding with the government there and municipal authorities in the Hangzhou region of China to simplify cross-border trade between the two regions. Such moves from these two titans are putting pressure on local players — Sea Ltd., an Indonesian internet company formerly known as Garena that operates a major e-commerce marketplace, recently raised $550 million to rapidly expand its presence in Southeast Asia before the Chinese giants become more entrenched. [1]

The easy growth days for e-commerce may be over, finds new U.S. consumer research by The Boston Consulting Group (BCG).

Even though more than three-quarters of Americans, ranging in age from 15 to 85, have bought something from Amazon.com in the past year, the overall move to online shopping is expected to slow considerably over the next three years, according to a BCG survey of more than 3,300 Americans completed this month.

In 41 categories, from athletic apparel and pet supplies to insurance products and consumer electronics, the vast majority of Americans surveyed — 78 percent to 92 percent, depending on the category — said they don’t plan to increase their online spending over the next three years. And in many categories — including baby products and food, beverages, fine jewelry, news and magazines, cars and packages goods — more than a quarter of those already shopping online said they will spend less online in the future.

Image Courtesy varstreetinc.com

Image Courtesy varstreetinc.com

In other words, more than twice as many people say they’ll spend less online over the next three years than those who say they’ll spend more online. Strikingly, the intention to keep online shopping at current levels and slow down in many categories is virtually identical among Millennials, Gen-Xers and Baby Boomers.

Consumers are notoriously unable to predict their spending patterns,” said BCG senior partner Michael J. Silverstein, an expert on consumer behavior and retail and packaged-goods innovation. “However, the findings from this research certainly pour cold water on everyone’s expectations for a continuously rising e-commerce world. E-commerce winners will have to earn new dollars and new spending by providing new value. That means me-too players will suffer — and leaders will need to provide more user-friendly websites, lower prices and offers tailored to individuals customers.

He added, “E-commerce is a channel, like any form of distribution: growth does not continue at a rapid, double-digit rate forever. Most consumer categories have been available online for several years. The ‘newness’ is gone, and we’re looking at mature levels of penetration in many categories,” noted Silverstein, coauthor of the recent book Rocket: Eight Lessons to Secure Infinite Growth.

Right now, online shopping growth is similar to the growth experienced in the 1970s and 1980s by catalog merchants. E-commerce has provided incredible value, enhanced competition and forced land-based retailers to improve their game. But consumers right now are saying, ‘I’m happy with my current options,’” he added.

The few categories in which the most respondents said they’ll spend more online over the next three years include airline tickets (20 percent of Americans), hotel reservations (20 percent), entertainment tickets and reservations (22 percent), reflecting potential sales growth in experiential consumption as opposed to products.

Photo Courtesy Boston Consultancy Group.

Photo Courtesy Boston Consultancy Group.

Said Christine Barton, the BCG senior partner who led the research, “We’ve done this survey periodically, and this is the first time we’ve seen such low future intention to increase online spending across categories. The plateau doesn’t mean that it’s ‘game over’ for online and omni-channel retailers. But it does suggest that e-commerce growth will now be harder for most of them.

She added, “Consistent with previous studies, men as well as younger generations report more of their purchases online across categories, compared with women and older generations. [2]

 

 

This Article Curated by Benang Merah Komunikasi’s Editorial team.

We consider to take journalism ethics and contents reposting etiquette seriously, that you can find here about media ethics. We do curation article for our audiences, not for search engine bots. By addressing this growing area of concern we hope reader can be smart to filter and understand between content plagiarism and content curation method.

References Sources:

[1] Taken from Southeast Asia’s set for explosive e-commerce growth written by Jonathan Camhi for Business Insider.

[2] Taken from Is the E-Commerce Boom Over? written by Apparel Mag.





© 2004-2017 Copyright Benang Merah Komunikasi Indonesia. Registered Trademarks.

Made with in Indonesia