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At present, the Asia-Pacific region is leading in global B2C e-commerce, with the total retail sales surpassing Western Europe and North America markets.

In fact, countries in the region are reported to have the highest levels of e-commerce adoption in the world. Currently, there are approximately 260 million users in the SEA region. This makes SEA the 4^th largest market in the world and the region’s B2C e-commerce market is estimated to be valued at US$770 billion.

According to GlobalWebIndex, Indonesia, Thailand, Malaysia, and Vietnam are all ahead of the global average while the Philippines matches the global average at 75%. Singapore, however, comes in just below that average, at 73%.

E-commerce use among internet users in the SEA — E-Commerce use among internet users in the SEA region

The SEA market is also a fast growing market , expanding at a 5-year compound annual growth rate (CAGR) of 14 per cent. The growth is further accelerated with the onset of a pandemic which saw 400% sales increase for products such as groceries.

The phenomenal growth in e-commerce is also not just about big, established platforms such as Shopee and Lazada. 2020 also saw other rising players in the region, including Vietnam’s Sendo, Tokopedia and Bukalapak in Indonesia as well.

With the increasing popularity of e-commerce, it’s no surprise that Southeast Asia has adopted the industry well. If you are transitioning to e-commerce and unsure how to maximise your digital potential, there is no reason to fret. Here are 3 Rising E-Commerce Trends that will inform your marketing decisions and drive your brand forward.

Rising Trends in the APAC/SEA Region

Trend #1: Mobile-first connectivity

High mobile phone user penetration is one of the major drivers of e-commerce growth in Southeast Asia.

A 2018 GSMA Intelligence’s Mobile Connectivity report indicated that 33% of Southeast Asia’s population is now covered by a mobile network, with 82% of the population living within the range of a 4G connection.

The increasing availability of affordable smartphones and the rollout of mobile telecommunication services across SEA markets also play an integral part in the growing mobile penetration in the region.

When it comes to internet penetration, Southeast Asian countries also lead the way. As of May 2020, Brunei ranks first with 95.3% followed by Singapore with 88.4% and Thailand with 81.7%.

Understanding the increase of internet penetration throughout SEA can help understand the e-commerce boom. — Image by: Statista

This growing mobile consumption and internet use in the SEA increases the likelihood of consumers making purchases via their mobile phones. Not only that, but this could also mean a higher probability of them researching product information on their smartphones.

How to keep up with this trend?

Given the Southeast Asians’ high mobile usage, you should optimize your website for mobile devices. Your e-commerce site must feature a responsive design—be it viewed through a web browser on a PC or a smartphone.

The loading speed of your website also matters. Most people prefer using mobile phones when they want an immediate response, so slow-loading products and sluggish checkout process might not help.

Building a mobile app is another way to keep pace with this trend. This will help you tap your customer base easier and engage with them faster.

Trend #2: Growing Number of e-shops

The rising demand for e-commerce has compelled many aspiring businesses to enter the industry.

Before, people are hesitant to buy things online. That is not the case anymore. Shoppers now prefer purchasing online primarily because it is convenient. Some online stores also offer a wider selection and better prices compared to physical stores.

This is particularly evident in today’s Covid-19 pandemic, wherein more people are turning to e-commerce to purchase items they might have otherwise purchased in person.

Indeed, the Internet has transformed shopping in Southeast Asia—and studies have proven it many times. According to a report by Hootsuite and We Are Social, 63% of the SEA population use the internet, putting the region ahead of Eastern, Central, and Southern Asia.

Internet penetration around the world has directly impacted the increase of e-commerce around the world.

Also, the SEA’s e-commerce big players—Lazada, Shopee, and Tokopedia—contribute to the growing e-shops in the region. It is no doubt that these leading platforms greatly impact the rapidly increasing popularity of e-commerce.

How to keep up with this trend?

Since more people are dipping their toes in the e-commerce field, you must take a step ahead in bringing your brand to life.

Learn to use technology to your advantage.

Incorporate tech features in your website to provide customers with a personalised shopping experiences. Many e-commerce stores have developed “virtual try on” for their products so that customers can shop in the comfort of their own homes.

Smart Buy Glasses’ virtual try-on is one of the best e-commerce site examples that integrated technology to meet the customers’ needs and demands.

Artificial reality can be leveraged to engage customers and increase e-commerce reach — SmartBuy Glasses

Sephora’s Virtual Artist

Sephora’s app has a Virtual Artist feature which allows you to try on makeup without visiting the physical stores. It is a time efficient way for customers to shop on the go, and it also solves the problems of customers who need to see and test the product when they’re unsure of the actual effect and suitability of a particular product.

E-Commerce is helped by the omnichannel approach to engage customers digitally. — Sephoras Virtual Artist Explainer Video

Trend #3: Evolving Customer Journey

Business trends across many industries can change rapidly, and so do customer expectations. As customers’ shopping behaviour changes over time, it’s important that businesses models can capture and grow in tandem with these shifting expectations.

This is especially so for Southeast Asian customers, whose shopping journeys are becoming increasingly complicated. While most of them shop online, a significant portion of them also research offline before purchasing online.

According to Forrester, SEA consumers’ shopping journey is a mix of online and offline touchpoints. Xiaofeng Wang, Senior Analyst in Forrester pointed out that they frequently research products and services on mobile phones, compare prices, look up product info, read customer reviews, and scan QR codes, to name a few.

Examples of such significant offline channels that customers go through are telephone, coupons, loyalty card, click and collect scheme, and so on.

How to keep up with this trend?

With customers in the region using varied channels for interaction, it’s crucial to bring align the customer’s online and offline shopping experience.

One way to do so is to implement an omnichannel marketing approach. This will help make your brand a most trusted product supplier or service provider. Doing this also further increases the possibility of getting customer retention.

The Takeaway

Southeast Asia is a part of the world where mobile phones and the Internet are no longer just wants but needs—and this could also explain why e-commerce is booming in the region.

If you’re thinking of starting an e-commerce business in the SEA, it’s not too late to do so. Getting into e-commerce could greatly benefit your business especially in times like a pandemic. Of course, you’ll ultimately need a strategy and a high-performance website or mobile app to stand out in a crowded field.

When it comes to web and app development, you can rely on 2Stallions. As a digital marketing agency, we can help to develop an instant e-commerce website that can market your business online and boost your sales. Talk to us today!

Keep Reading

You may have noticed that people around you are making money—with some making a living—from their online businesses. From blogshops selling clothes to private tutors getting clients from mobile apps, people are earning cash by leveraging innumerable business possibilities. Is there a formal description of this phenomenon?

Yes, there is one. It is called the “Long Tail Effect.” Before we delve into its specifics, let’s address the question on your mind right now: Why is it likened to a “long tail?”

That is because the graph associated with this phenomenon resembles a creature with a long tail (yay, pareidolia). Of the following images, the first is an archetypal version of the graph, while the second is a visual explication of the graph’s resemblance to creatures with long tails:

Figure 1: Sales Distribution Curve

Coined by Chris Anderson (former editor-in-chief of WIRED magazine) in his 2004 article, the Long Tail describes the shape of the lower end of the sales distribution curve—as represented by the shaded portion of the graph in Figure 1. The main takeaway from this graph is that the “long tail” occupies an area roughly equivalent to the area occupied by the vertical “head” that comprises of bestsellers. In other words, there is bestseller-quantity wealth hidden in the seemingly nondescript “long tail”.

So, what makes up the Long Tail? While the “head” consists of a handful of fortune-making bestsellers, the Long Tail consists of innumerable, non-popular (not necessarily unpopular) products that sell few

Returning to the part about bestseller-quantity wealth, this means that if you could somehow aggregate the sales of all products in the Long Tail, you would make a fortune roughly equivalent to the wealth generated from the sales of the relatively few bestselling products in the “head.” This is what happens with companies such as Amazon and Netflix; these aggregators and sellers of content/products make roughly the same amount of money—or more—from the sales of their obscure content/products as they do from the sales of their handful of bestsellers.

Of course, not everyone will find an aggregator like Amazon or Netflix (and go on to become a multimillionaire or billionaire). How does the Long Tail Effect benefit individual, ordinary persons then? How does it help you market for yourself?

As always, the answer is to search for a sweet spot somewhere in the middle of two extremes. In the Long Tail’s context, the two extremes are the bestsellers and the super-obscure sellers. As an ordinary person, you should generally aim for the area labeled “Broad Range of ‘Average Performers’” in Figure 1. The rationale is as follows: Your product/service becoming a bestseller is unlikely, while being in a low-selling niche will ensnare you in urban poverty—so making your offering average in popularity/demand is the most realistic measure you can take.

Remember those people around you who are making money (or even a living) from their online businesses? Those who make a living have products that lie at the very least in the Long Tail’s middle area. If you also have an online business, but you are not making a living like them, then perhaps you require 2Stallions’ digital marketing expertise. We can help you market online better; we can elevate your offering from the wasteland of obscurity to the wellspring of average-or-more popularity.

Contact us here to begin your 2Stallions partnership. With years of experience across diverse industries under our digital marketing belts, we can analyze your business needs accurately, and provide you suitable solutions.

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digital economics

3 E-Commerce Trends in SEA to leverage and boost your business