Southeast Asia E-commerce Acceleration

The Southeast Asian e-commerce market has experienced rapid growth since the mid-2010s, but the COVID-19 pandemic has accelerated this trend even further. E-commerce sales have increased by 40% annually, resulting in a fivefold growth from 2016 to 2021. Additionally, e-commerce’s share of retail sales has jumped from 5% to 20%.

This growth in the Southeast Asian e-commerce market has brought about changes beyond just increased value. More people are purchasing a wider variety of products through various online channels, causing a shift in the region’s supply chains. To meet the demands of this expanded range of fulfillment requirements, new logistics capabilities will be necessary, and both established and new logistics companies possessing these capabilities will benefit the most from these changes.

This article provides an outlook on the future growth trajectory of Southeast Asia’s e-commerce market. We will draw upon China’s experience to predict how the e-commerce landscape will evolve in Southeast Asia, examine how changing consumer and merchant behaviors will impact the logistics sector, and explore opportunities for logistics players to capitalize on domestic and cross-border operations.

While e-commerce is currently growing at a slow pace in Southeast Asia, there is still a significant opportunity for further expansion and development in the region.

Southeast Asia’s e-commerce markets have experienced significant growth in recent years, with many passing their inflection points marked by significant upticks in e-commerce activity (as seen in Exhibit 1). This growth has been fueled by increasing internet accessibility as more people in the region gain access to smartphones and other digital devices, as well as the proliferation of online marketplaces like Lazada, Shopee, and Sendo. Despite the current macroeconomic challenges and uncertain conditions, many e-commerce players are expected to focus on profitability and adopt a more conservative growth strategy. However, the potential for significant growth in the sector remains vast and unaffected.