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Southeast Asia e-commerce market poised for high growth
Southeast Asia will be one of the world's fastest-growing markets for e-commerce revenues in 2014, new research from Frost & Sullivan shows.
Total revenues from B2C e-commerce in the six largest Southeast Asian countries (Indonesia , Malaysia , Philippines , Singapore , Thailand and Vietnam ) reached US$7 billion in 2013. This is expected to grow at a compound annual growth rate (CAGR) of 37.6 percent to reach USD34.5 billion by 2018.
The research firm said Singapore is the largest e-commerce market in Southeast Asia in 2013 with revenues of USD1.7 billion. However, by 2018 growth in emerging economies will be substantial and Indonesia is expected to be the largest Southeast Asian e-commerce market generating over 40 percent of regional revenues.
Mr. Marc Einstein, Industry Principal, ICT Practice, Asia-Pacific at Frost & Sullivan said a combination of economic growth, Internet adoption and foreign investment are generating enthusiasm for the e-commerce sector.
"Per capita income is rising in Southeast Asia and more consumers are using the Internet through PCs, smartphones and tablets. There is no dominant player in the regional market but foreign companies such as Amazon, Rakuten and Alibaba are all expanding in the region and there are several strong domestic companies hence the region is very competitive despite its infancy."
Einstein said the rapid-growth in the Chinese e-commerce market is also influencing Southeast Asia e-commerce space. "In 2013 e-commerce revenue in China represented 7.8% of all retail sales, higher than in the US, Europe and Japan. Given the rapid adoption of ecommerce there, we believe that e-commerce will grow rapidly in Southeast Asia countries where e-commerce still represents less than 2 percent of all retail sales in most countries," he said.
There are, however, several factors that are inhibiting the growth in the region. For one, Frost & Sullivan said credit card ownership is less than 10 percent of the population in some Southeast Asian markets and upwards of 50 percent of the population in some countries lack bank accounts making payment a major issue. Internet fraud is also very high is some countries such as Indonesia which further discourages e-commerce use.
Nonetheless, Einstein said the market will continue to expand and will eventually consolidate.
Source: retail in asia