Southeast Asia added 70 million online shoppers since Covid: Report
Grab delivery cyclists ride past each other in Singapore on April 20, 2020.
Getty Images An estimated 70 million more people shopped online in six Southeast Asian countries since the pandemic began, according to .| AFP | Getty Images
An estimated 70 million more people shopped online in six Southeast Asian countries since the pandemic began, according to a report from Facebook and Bain & Company.
Because governments encouraged residents to remain home, the pandemic spread slowly, Southeast Asia witnessed a rise in digital services, including e-commerce, online food delivery and online payments.
This trend will likely continue. According to the report which included more than 16,000 respondents from Indonesia, Malaysia and the Philippines as well as Singapore, Thailand, Thailand, Vietnam, and Singapore, 350 million digital customers will be found in Southeast Asia by 2018.
Facebook and Bain anticipate that more than 70% will shop online by 2021. According to the report, 380 million Southeast Asian online shoppers will be available by 2026.
According to the report, Indonesia is still the most developed country in Southeast Asia. According to the report, its digital consumer population should grow 15% to reach 165 million by 2021 from 144 millions in 2020.
Many parts of Southeast Asia are grappling with a resurgence of Covid due to the highly transmissible delta variant. Some emerging countries have low vaccination rates. E-commerce has thrived due to intermittent lockdowns, movement restrictions and difficulty for customers to go into brick-and-mortar stores.
The survey, which was conducted in May, found that the share of respondents who said they shop “mostly online” rose from 33% in 2020 to 45% this year, with the greatest gains coming from Singapore, Malaysia and the Philippines.
Bain and Facebook projected that online spending would increase 60% by 2020, from $238 per consumer in 2020 to $381 this year. The report stated that online retail has increased in Southeast Asia, from 5% to 9% in 2020, and is growing faster than it was in Brazil, China, or India.
The report stated that Southeast Asia’s online retail sales are expected to grow at 14% annually over the next five-years.
With more purchases being made online, fintech services such as “buy now, pay later,” digital wallets and cryptocurrencies have also become more widespread.
88% of venture capital and private equity investments made in the region were directed to the internet and technology sector during the first three months. The report shows that 56% went to financial technology.
We are seeing a triple explosion in fintech. Dmitry Levit from Cento Ventures stated that not only will regulators remove the regulatory hurdles, but there’ll be an explosion of capital with zero friction.
For 37%, digital wallets were preferred as a payment method, while 28% preferred cash. 19% preferred credit cards or debit cards, and 15% preferred bank transfers. With 133%, 87%, and 82% respectively, the Philippines, Malaysia, and Vietnam experienced the greatest gains in digital wallet use.
The report stated that Southeast Asia’s rapid digitization during the pandemic has demonstrated the enormous potential in its digital economy.
The report said that the region will become a major growth market over the coming 10 years, as more verticals, industries, and products are developed,” Justin Hall of Golden Gate Ventures stated.