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  • Writer's pictureJoel Werner

Online Shopping Drives Growth in Southeast Asia

Updated: Dec 15, 2021

By the end of this year, the Southeast Asian countries of Singapore, Malaysia, the Philippines, Indonesia, Thailand, and Vietnam will likely have at least 70% of their adult population buying online. That’s according to the latest SYNC Southeast Asia report undertaken annually by Facebook and the consulting group Bain. In the report, the authors relate how, between them, these nations have added 70 million digital consumers since the beginning of the coronavirus pandemic. It represents an 85% year-on-year growth in online retail penetration, exceeding even the traditional Asian giants, India (10%) and China (5%).

What and How Are Southeast Asian Consumers Buying Online?

Based on a survey of more than 16,000 people, digital spend per head for the region was $238 in 2020. And it's anticipated to jump to $381 by the end of this year. Partially accounting for the rise is groceries, the fastest-growing online spend category during the pandemic period. But the new digital shoppers buy across a wide range of categories—an average of 8.1 versus 5.1 categories last year. And respondents don't plan to revert to brick-and-mortar stores for any of their purchases.

As opposed to China and the US, where the increase in online purchasing essentially represented a shift from offline to online, in Southeast Asia consumer spending growth is being driven by online channels. But still, only 45% of the region’s shoppers are using online channels as their primary shopping path, and most aren’t going online with a fixed idea of what they want to purchase. That half admit to buying from stores they previously had not known about in the last three months shows just how open these buyers are to discovering new products and services. And 22% identify social video as their top discovery medium. The figure explains why statistics show the medium has tripled in importance for online shopping and perhaps also explains the correlation between the region’s 346 million daily Facebook users and its 350 million anticipated digital shoppers for 2021. However, the report forecasts a slowdown in growth as things normalize post-pandemic, suggesting it's going to take another five years for the next 30 million shoppers to come online. That’s an estimate that puts the region on a par with predictions for India, China, and Brazil.

Online Shopping Trends for 2022

The pandemic changed eCommerce trends globally, and as Southeast Asians come online, their needs will likely fall in line with international trends. Entrepreneur predicts five trends that will change the eCommerce landscape in 2022:

Voice Search for Shopping—The voice-assistant-speaker market is anticipated to reach $4 billion by next year, with voice shoppers predicted to grow by 55%. As a result, eCommerce vendors utilizing voice-search optimization that will be identified and positively ranked by voice-search AIs like Siri, Alexa, and Google’s Assistant will undoubtedly be rewarded.

Demand for Personalized Products—Brands that allow customers to personalize products the way Nike is letting people choose the designs on their sneakers have latched on to how to win loyalty with a customer base that can now switch brands with the swipe of a finger. Experts predict that most eCommerce brands will offer customers some form of personalization in exchange for their data in 2022.

Customer-Service Management with Chatbots—Servicing customers online is one of the biggest challenges faced by eCommerce vendors. Chatbots are increasingly being used to perform tasks ranging from making product recommendations to dealing with customer complaints. The trends will continue in 2022, with smaller vendors realizing the benefits of chatbots.

Augmented and Virtual Reality for ShoppingAugmented and virtual reality will close the experience gap between offline and online shopping by showing customers what the product looks like in “real life.”

Omnichannel Selling—85% of digital customers need to be shown items multiple times before they’ll make a purchase, and almost 40% research prospective purchases and vendors on social-media channels. Vendors that expand to social-media platforms and make their products available via major retailers like Amazon or eBay will see higher sales volume.

It’s Not Just Shopping.

But the future isn’t only about shopping. The majority (more than 95%) of Southeast Asians surveyed in the Facebook/Bain study report using smartphones to access the Internet. And investors with an eye to the future are confident that’s not all they’ll be doing on their devices. Technology startups made up 88% of venture capital and private equity deals for this year’s first quarter, compared to 75% last year. And fintech made up more than half of that deal value. So shopping may be what's leading consumers to the Internet, but they'll likely be needing other services, like credit and digital currencies.

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