E-commerce in ASEAN shows much promise. Southeast Asia’s online retail penetration level is 3 percent, amounting to about $6 billion in sales in Singapore, Thailand, Indonesia, Malaysia, Philippines and Vietnam. In contrast, China and the U.S. have online retail penetration levels of 14 percent, with online sales surpassing $250 billion.
Yet, operating in Southeast Asia is challenging. The market is more heterogeneous than many assume, and e-commerce is also an increasingly crowded and fragmented space. Coupled with the lack of good logistics and payments network in many of these countries, Southeast Asia is testing even for the most seasoned online retailers.
With all this in mind, e-commerce platforms, payment providers, logistics enablers, and last mile delivery and marketing agencies would do well to understand the nuances of each region before deciding to launch in one, or expand to others. With this report, we provide an overview of the landscape, opportunities, and challenges that are prevalent in SE Asia and its e-commerce industry.