Some of you may have heard that Southeast Asia has potential, but wonder if it is true. In this issue, we will provide an overview of the Southeast Asian market for such people!
Southeast Asia usually refers to the 10 countries of Singapore, Malaysia, the Philippines, Indonesia, Thailand, Vietnam, Cambodia, Brunei, Myanmar, and Laos.
Among them, six major countries [Singapore, Malaysia, the Philippines, Indonesia, Thailand, and Vietnam] are often targeted for e-commerce in terms of income level, population, and environment. Of these, English is the official language in Singapore, Malaysia, and the Philippines.
Religions vary from Buddhism, Islam, and Christianity. All countries have many similarities in lifestyle due to their warm climates.
People say, "Southeast Asia is a growing market," but quantitatively, to what extent? First, let's look at the population.
The most populous country in Southeast Asia is Indonesia, which ranks fourth in the world with approximately 280 million people. Singapore has one of the highest income levels in the world but is a compact country with a population of about 6 million. Other countries have population levels ranging from tens to 100 million. If Southeast Asia is considered as one market, the total of the six major countries is a market of about 600 million people.
The annual growth rate of the population shows that the population of each country is steadily increasing, with the Philippines leading the way. However, Thailand's population growth is slow as the country's birthrate is declining and the population is aging. The Philippines and Vietnam are expected to exceed Japan's population in three years (2026) and 23 years (2046), respectively.
Singapore boasts the world's second-largest GDP per capita. English is the official language, income is high, and the tax system is simple, making Singapore a target for cross-border e-commerce in many cases.
Other countries have a lower level of GDP per capita than Japan, but Malaysia and Thailand have increased their GDP per capita to about half that of Japan, and Indonesia, Vietnam, and the Philippines have followed suit, growing to around the level of middle-income countries.
Annual GDP growth is also strong in each country: over the past 10 years through 2022, the Philippines has increased its GDP by 1.5 times, Indonesia by 1.4 times, and Vietnam by 2.1 times.
Furthermore, although the author lives in Vietnam, I feel that urban residents in Southeast Asia have the unique atmosphere of a developing country and that consumption is a high percentage of their income.
The size of the e-commerce market in Southeast Asia continues to grow rapidly, and the combined e-commerce market size of the six major countries is expected to exceed the level of Japan by 2025.
While your own website is an important channel for e-commerce in Southeast Asia, you may also want to consider using an e-commerce marketplace if your product category is well known or if you have significant price and functionality advantages.
The biggest e-commerce marketplaces in Southeast Asia are Shopee and Lazada. iPrice reports that the top five e-commerce platforms in terms of monthly visitors in the six major Southeast Asian countries in Q2 2022 are as follows, with Shopee and Lazada topping the list in every country.
Shopee's GMV is expected to be approximately $80 billion by 2022, and Lazada is aiming for a similar level (reference), meaning that Shopee has about half of Shopify's global GMV, even though its GMV is primarily in Southeast Asia.
By category, Shopee is particularly strong in fashion, cosmetics, and accessories, while Lazada is strong in electronics (reference).
Southeast Asia has great potential, and the major e-commerce marketplaces are Shopee and Lazada (And TikTok Shop has recently gained momentum.). However, different products require different tactics; we can provide more detailed information on the situation and promotion methods in each country, so please feel free to contact us.
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