Post-Pandemic E-Commerce Trends in Southeast Asia

Post-Pandemic E-Commerce Trends in Southeast Asia

Read Time: 4 Minutes

There’s no question that, in 2020 and beyond, retailers focusing on e-commerce saw rapid growth globally because of the lockdowns and travel restrictions associated with COVID-19. But how did that growth manifest among consumers in Southeast Asia, specifically? And as we speed toward the end of 2022, what can be predicted for this market moving forward? To answer these and other questions, GLG’s Joyce Ho spoke with Duri Granziol, GLG Network Member, Chief Executive Officer and Co-Founder of Mama’s Choice Indonesia, and former Co-CEO of Lazada Indonesia. This article is a condensed and edited version of their conversation.

Can you give us an overview of Southeast Asia’s e-commerce market in the first half of 2022?

This year we’ve seen a bit of a slowdown of growth in most markets compared with last year. This slowdown had already started in Q4 2021 because most intercountry travel regulations, including group size and mask mandates, were removed. This made people feel more comfortable going to malls and seeing family and friends, so they would instead spend money on other things, like going to restaurants, as well. This meant people were more likely to spend their money offline, so we could see that online growth slow down across all markets.

Other than that, competition intensity has been up and down. In Indonesia, we saw a few pushes this year, with Lazada and Tokopedia having different months where they tried to ramp up market share. In this article, you can see Tokopedia in first with 157.2 million web visits and Lazada in third with 24.7 million web visits for Q1 in 2022.

In terms of market penetration, how are different markets in Southeast Asia doing? Do you see a significant uptake since the pandemic? And where do they stand respectively in terms of development cycle?

Many people seem to be buying online for the first time. In the Southeast Asia markets, a majority of the younger, urban demographics were already familiar with e-commerce. COVID, both in Southeast Asia and globally, increased the frequency of online purchases and overall market penetration because of restrictions and lockdowns, preventing buyers from going out and shopping in person.

Can you highlight some user behaviors specific to the Southeast Asian markets?

People love choice. Compared with Western consumers, those in Southeast Asian markets want to see the same product listed by many different sellers so they can compare prices or delivery times. This is similar to their offline behaviors — you might see a whole street of lamp stores, or whole streets of butchers. You don’t see that as often in Western retail. People are also extremely price sensitive because, generally, their income is low.

Consumers in the region also find playful interfaces appealing, so when you look at a retailer like Shopee, there is gamification, vibrant colors, pop-ups, and blinking features. Nowadays, the average consumer also has more spare time, so they like to be entertained while they’re shopping, as well.

Considering that inflation and rising interest rates continue to make foreign goods more expensive in Southeast Asia, what’s your outlook for the region’s e-commerce market in the second half of the year?

There will definitely be a further slowdown in the purchasing of more expensive goods, like mobile phones and so on, because overall employment rates will likely decrease and salary increases will occur less frequently. Because the majority of regional orders are either less expensive local goods or goods imported from China, I don’t foresee that the overall amount of orders will decrease.

Are there any foreseeable headwinds or tailwinds for the next three to five years?

Establishing and improving infrastructure in the region will help to bring logistics costs down, and because of that, will help introduce e-commerce into smaller towns.

In places like Jakarta, players like Astro offer delivery within 10 minutes of the user’s order. We’re seeing more retailers offering comparable services, which could lead to higher customer standards, which will be interesting. In larger cities, users get a higher service level at cheaper costs, but it’s unclear how sustainable that will be.

Once the more remote areas gain access to these services, the volume of orders will likely increase. This is a massive growth region with economies growing at a fast pace and citizens growing their own wealth, so you’ll obviously have an increase in consumers who are able to spend on products other than necessities. This will then trickle down into e-commerce, because while you might be able to buy your more basic goods, like rice and cooking oil, or clothing, in neighborhood stores, once you begin buying luxury items, e-commerce provides a greater variety of options than previously available.


About Duri Granziol

Duri Granziol is currently the CEO and Co-Founder of Mama’s Choice Indonesia. He is also an advisor to the CEO and Founder of Tickled Media Ltd. Previously, he was the Co-CEO at Lazada Indonesia. Under his co-leadership, Lazada became the largest e-commerce platform in the country. In this role, he oversaw commercial, business development, and operations. Before joining Lazada Group, he was a management consultant at the Boston Consulting Group Hong Kong. He received his master’s degree in law and economics at the University of St. Gallen in 2008.


This retail industry article is adapted from the GLG Teleconference “Southeast Asia’s E-Commerce Market 2022 H2 Outlook.” If you would like access to the transcript for this event or would like to speak with retail industry experts like Duri Granziol or any of our approximately 1 million industry experts, contact us.


Questions Asked During the Teleconference:

  • So for a start, Duri, can you please give us an overview of Southeast Asia’s e-commerce market in the first half of 2022?
  • So in terms of market penetration, how are different markets in Southeast Asia doing? Do you see a significant uptake since the pandemic? And where do they stand respectively in terms of development cycle?
  • Can you tell us a little more about Southeast Asia’s competitive landscape in the first half? Which players are doing particularly well, what are their respective market shares, and how have they achieved that?
  • Can you tell us more about how Shopee has maintained its leading position? How has it arrived at such a strong position?
  • So, is Shopee still in this kind of cash-burning mode or spending a lot of money on marketing? Are they still in that stage?
  • Can you comment on the unit economics across the major players in Southeast Asia?
  • So, are they improving across the board?
  • Recently — actually, it’s more like in the past year or two — we saw many Chinese internet companies, like TikTok, expanding into Southeast Asia, especially when the domestic e-commerce market is saturated. So, how well are they doing in Southeast Asia, and what are their competitive advantages and disadvantages?
  • Can you expand on what determines good conversion for a particular e-commerce site? What would help them in terms of conversion, and what doesn’t help?
  • So, to what extent do you think that TikTok can extrapolate their experience from mainland China to Southeast Asia for market expansion, considering a lot of mainland Chinese in tier-two, -three, -four, or -five cities probably have very little pocket money or disposable income to spend on shopping? So, given that kind of similarity, do you think these players can also extrapolate their experience at home to Southeast Asia?
  • Is it possible for you to highlight some specific user behaviors or behaviors specific to the Southeast Asian markets?
  • I know you are running Mama’s Choice Indonesia, a personal care goods brand targeting expecting and new mothers through different e-commerce platforms. So, how do merchants typically choose which platforms to host their online stores, and what are the different support or incentives from different platforms?
  • In terms of support and incentives, are support and incentives very different from different platforms?
  • How important are e-commerce enablers, such as Sirclo in Jakarta or aCommerce in Bangkok, to merchants and the growth of the entire e-commerce ecosystem in Southeast Asia?
  • Can we expect more mergers and acquisitions in the e-commerce enabler space because companies like Lazada or Shopee would like to acquire some existing players? Or do you think they want to build their own e-commerce enabling unit?
  • So which e-commerce enablers are doing particularly well in Southeast Asia, and why are they doing so well?
  • In the first quarter, Sea Ltd. recorded a 64% jump in revenue, thanks to improvement in its e-commerce business. Yet early this month, it also announced staff layoffs in various markets. I think food delivery and online payment are the ones being most impacted. So how would you interpret these moves by Sea Ltd.? And do you think this signals that Southeast Asia’s business environment is changing for the worse?
  • We see that Sea has quite a strong position already in Southeast Asia. So, what are the other growth drivers for this company?
  • So what about other competitors, like Tokopedia and Lazada — how are they competing against Sea now?
  • What’s your outlook for Southeast Asia’s e-commerce market in the second half, considering inflation and rising interest rates, which basically make foreign goods more expensive in the region?
  • So what about the next three to five years — any foreseeable headwinds or tailwinds?
  • Do you have any estimated size of Southeast Asia’s e-commerce market and growth pace in the next few years?

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