ASEAN e-commerce is at a crucial turning point. It is evolving to a more mature stage, providing more value to consumers and companies. Premium products, innovation, creativity, and new customer experiences are the new standard.
Pandemic Accelerated Growth
Already before the pandemic, online shopping in ASEAN had grown at a massive pace. It is expected to reach $172 billion by 2025, according to the e-commerce platform Lazada. That's about 2.8 times more than the 2020 volume.
The pandemic further accelerated this trend when in-store shopping became unfeasible due to lockdowns. "In the pandemic, resilience and innovation are key to overcoming challenges. Lazada is very optimistic that all of the countries across Southeast Asia will be able to flatten the curve and emerge stronger than ever," says Chun Li, chief executive of Lazada Group.
Tailwind through Online Proliferation
Today, in ASEAN, most people—70% of the population—have access to a stable internet connection, equaling 40 million new internet users.
ASEAN also has a large young population and strong GDP growth. The middle class is growing fast, uplifting the region's retail sector. However, ASEAN e-commerce still has unexploited resources, with online retail accounting for only 7% of total retail sales, while China's has reached 26%.
According to Lazada's Digital Commerce Confidence Index, 70% of ASEAN online sellers say they are confident about their business prospects over the next three months.
Trust Is Increasing
There are sharp differences among the product categories. The proportion of electronics items sold online reached 21% last year, compared with 14% in 2019. Fashion had increased from 9% in 2019 to 13% in 2020.
ASEAN e-commerce will capture more of the retail market, as it helps brands create a better experience for customers. Moreover, it allows them to gather more data and target customers more effectively. Mr. Chang believes that as the e-commerce market becomes stronger, consumers will start buying items with higher prices and with a greater level of trust.
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