The scale of another e-commerce market is about to exceed one trillion!

As competition in the European and American markets becomes increasingly fierce, many sellers are observing and trying new markets in order to find new growth points. Southeast Asian countries such as Vietnam, Thailand, Indonesia, and the Philippines have also entered the field of vision of many sellers due to the rapid development of e-commerce.

Recently, Google, Temasek and Bain & Company released the Southeast Asia Digital Economy Report 2024. The report mentioned and analyzed the current status of six Southeast Asian markets worth paying attention to, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and made predictions about their future.

It is worth mentioning that the "Southeast Asia Digital Economy Report" has been published since 2016, when it was led by Google and Temasek, and then in 2019 Bain joined as a major research partner.

The total GMV of e-commerce in the six Southeast Asian countries will reach US$159 billion in 2024

This year's report mentioned that the e-commerce market has made an indispensable contribution to the growth of Southeast Asia's digital economy in the past two years . In 2023, Southeast Asia's e-commerce GMV was still US$138 billion (RMB 989.971 billion), and by 2024 it had reached US$159 billion (RMB 1.14 trillion) .

In the report, Google, Temasek and Bain listed the e-commerce GMV of the above six countries in 2024 and predicted the size of the e-commerce market in these countries in 2030. In order of GMV from high to low, these countries are ranked as Indonesia, Thailand, Vietnam, the Philippines, Malaysia and Singapore .

Indonesia: $65 billion

Indonesia's e-commerce is expected to reach $65 billion (RMB 466.29 billion) in 2024, an increase of 11% from 2023, and will increase to $150 billion (RMB 1.07 trillion) in 2030. However, between 2022 and 2023, Indonesia's e-commerce growth rate was only 1%. According to the forecast, Indonesia is not only the country with the largest e-commerce scale among the six countries now, but will still be the country in six years. At the same time, Indonesia also has the largest population among the six countries, with a population of 280 million.

Thailand: $26 billion

The scale of Thailand's e-commerce is expected to reach US$26 billion (RMB 186.516 billion) in 2024, an increase of 19% from 2023, and will grow to US$60 billion (RMB 430.422 billion) in 2030. The e-commerce market is also an important factor in promoting the growth of Thailand's digital economy. The popularity of video commerce plays an important role - it promotes online shopping in Thailand through an interoperable shopping experience and attractive content. Although e-commerce GMV ranks second, Thailand's population ranks only fourth among the six countries, reaching 72 million.

Vietnam: $22 billion

Since 2022, Vietnam's e-commerce market has maintained a good growth rate, with a growth rate of 25% from 2022 to 2023 and 18% from 2023 to 2024. The report predicts that the scale of Vietnam's e-commerce is expected to be US$22 billion (RMB 157.821 billion) in 2024, and will increase to US$63 billion (RMB 451.943 billion) by 2030. E-commerce and tourism together have driven and maintained the double-digit growth of Vietnam's digital economy. Vietnam's population, like GMV, ranks third among the sixth countries, reaching 100 million. It is worth mentioning that both consumers and content creators have shown a stronger preference for local languages.

Philippines: $21 billion

The scale of Philippine e-commerce is expected to reach US$21 billion (RMB 150.648 billion) in 2024 and will increase to US$60 billion (RMB 430.422 billion) by 2030. Like Vietnam, the Philippine e-commerce market has maintained a good growth rate since 2022, at 14% in 2022-2023 and 26% in 2023-2024. The Philippines has the second largest population among the six countries, reaching 119 million. Compared with other countries, creators in different fields in the Philippines are able to interact and develop better, forming a vibrant and sustainable creative environment.

Malaysia: US$16 billion

The scale of e-commerce in Malaysia is expected to reach US$16 billion (RMB 114.779 billion) in 2024 and will increase to US$25 billion (RMB 179.342 billion) by 2030. Malaysia's population ranks fifth among the six countries, reaching 35 million. Unlike other countries, the Malaysian e-commerce market maintained a zero growth trend in 2022-2023, and increased by 17% in 2023-24. In addition, the number of brands and influential video creators in Malaysia has also seen strong growth during this period.

Singapore: US$9 billion

The scale of e-commerce in Singapore is expected to reach US$9 billion (RMB 64.563 billion) in 2024 and will increase to US$17 billion (RMB 121.953 billion) by 2030. Singapore's e-commerce scale is not only the smallest among the six countries, but also the smallest population among the six countries, with only 6 million. Moreover, Singapore's e-commerce market showed a negative growth trend between 2022 and 2023, with a decline of 6%; but between 2023 and 2024, the e-commerce market grew by 12%. It is worth mentioning that in Singapore, a multilingual ecosystem, English dominates consumer searches and content creation, as does the Philippines; while Indonesian, Malaysian, Thai, and Vietnamese consumers and content creators mainly use their native languages .

However, consumers in all six countries prefer to use broader keywords when searching for products rather than searching directly for a specific brand, which means they may be looking for more options.

This situation is particularly evident in Thailand ( 69% ), Vietnam ( 68% ) and Indonesia ( 66% ); followed by the Philippines ( 59% ) and Singapore ( 56% ), but the proportion is less than 60%; in Malaysia, the difference between the proportions of consumers who prefer brands (49%) and non-brands (51%) is the smallest.

(Source: Southeast Asia Digital Economy Report 2024 )

Instead of new users, existing users become the key to e-commerce market growth

In the current growth of Southeast Asia's e-commerce market, existing users are the main driving force , accounting for 60%-70% of the growth in 2024. This is different from the situation in the past decade, when growth was mainly dependent on consumers who tried online shopping for the first time.

As GMV grows, the number of orders placed by each shopper also changes: compared with a decade ago, shoppers will shop online nearly eight times more frequently in 2024 ; in 2012, the number of orders placed by each shopper per year was 3-4, and in 2024 it is expected that the number of orders placed by each shopper per year will reach 27-32.

However, the average order amount of shoppers has decreased , which is caused by changes in the types of goods purchased and fierce market competition . In 2021, the average order amount will be between $18 and $23, and in 2024, the average order amount will be between $13 and $15 . However, this situation will gradually slow down as the market environment matures.

Different product categories also have different growth trends. For example, the fashion category market is relatively mature, so the growth rate will become slower; beauty products will continue to grow due to the emergence of some new brands that are mainly sold online; groceries currently have a small share in the market, so the growth in the next five years will be more obvious.

It is worth mentioning that the growth of GMV and revenue is inseparable from the "rapid development of video commerce" and the "investment of various platforms in GMV".

At present, major international e-commerce platforms such as TikTok, SHEIN, and Temu are gradually expanding into the Southeast Asian market. These platforms usually have strong brands, funds, and resources, which allow them to gain a foothold in new markets more quickly; and old players who entered the market early have to make more investments in order to maintain their own GMV growth and market share. This makes the market competition more intense.

The rapid rise of video commerce (live streaming, video streaming, etc.) has had a positive impact on GMV and customer acquisition. The report shows that in 2022, video commerce accounted for less than 5% of GMV, and by 2024, this proportion rose to 20%. The report believes that video commerce has been integrated into the shopping process of Southeast Asian consumers. From product discovery and research to final purchase, more than 40% of Southeast Asian online shoppers rely on this method to help them make purchasing decisions.

Video commerce also provides brands with the opportunity to collaborate with creators from different industries, which not only expands the brand's audience base but also enhances the brand's influence.

Although the effectiveness of video commerce in maintaining long-term customer relationships is still being evaluated, the report believes that by providing a more personalized and interactive shopping experience, video commerce can help deepen the connection between customers and brands, thereby enhancing long-term customer loyalty.

According to the data in the report, the potential of the Southeast Asian market is still relatively large. However, due to the large number of countries in the region, each country has different national conditions, consumer languages ​​and habits. Sellers also need to find and adjust business strategies that are more suitable for themselves and the target market (or the market they are operating in) according to their own conditions.

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