Southeast Asia’s e-commerce market is set to skyrocket

As online shopping surges, marketers and merchants gear up for the next phase of growth

The Southeast Asian e-commerce market has grown rapidly in recent years, and this trend is expected to continue for the next five years, according to McKinsey & Company. Many people in the region have become more comfortable shopping online, due in part to the proliferation of online marketplaces like Lazada, Shopee, and Sendo. 

Between 2016 and 2021, the total value of e-commerce sales in Southeast Asia grew fivefold, and e-commerce’s share of all retail sales rose to 20 percent from five percent. The report states that by 2026, the Southeast Asian market is expected to triple, reaching approximately USD230 billion in gross merchandise volume. Growth is likely to come from customers making purchases across a range of product categories and channels, including food and beverage, beauty products, and home and living goods. 

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This shift is expected to increase the demand for new and more sophisticated logistics services. Merchants will diversify their sourcing channels to include more Southeast Asian countries, and this will cause a migration of supply chains, unlocking new channels of value for logistics providers.

With this shift, it was reported by Marketing-Interactive that 99 percent of Asia-based marketers plan to increase their retail media spend over the next 12 months, according to a study by Carousell Media Group and the Interactive Advertising Bureau Southeast Asia and India. Retail media, which involves placing ads on a retailer’s e-commerce website or app, helps to influence sales throughout the customer journey. 

Customer engagement company Moengage noted 45 percent of consumers reducing offline purchases and 30 percent growing their online purchases. Out of all consumer brands, 80 percent in the region are going digital, with many brands focusing on growing their online gross merchandise value (GMV) and enhancing customer experience and engagement, thus highlighting the importance of using insights-based engagement, personalization, and product-driven strategies to attract and retain customers in the digital retail space.

The Property Report editors wrote this article. For more information, email: [email protected].