As a natural continuation of our previous article, ASEAN’s E-commerce Challenges, InvestAsian is proud to feature opportunities for e-commerce in ASEAN as well. Southeast Asia is looking at a prosperous future as an e-commerce retail giant with phenomenal growth rates surpassing those of the US and EU.
Just the sheer size of ASEAN makes it a viable market for e-commerce businesses. Not only does ASEAN consist of more than 600 million people, but the region has just initiated a landmark integration project called the ASEAN Economic Community. The community aims to transform the 10 member nations into a single market, greatly reducing tariffs and encouraging free trade.
This environment represents a significant opportunity for both multinational e-commerce companies and smaller businesses of any size to develop business models to reach out to all of ASEAN.
There is huge growth potential in the e-commerce market of ASEAN, but this does not mean the current market is not significant now. The e-commerce retail market in just the 6 countries of Malaysia, Indonesia, Philippines, Singapore, Thailand, and Vietnam is estimated to be worth around US$7 billion.
It’s important to note that the market value of US$7 billion is with only 29% of ASEAN’s huge population having access to the internet. The e-commerce industry is set to grow naturally as internet penetration increases.
With that said, there are two key drivers which are opening up opportunities for development of e-commerce in ASEAN.
1. Increase in Purchasing Power
In many ASEAN countries, the middle and affluent class population is expected to at least double in a few years’ time. With GDP per capita expected to grow in the range of about 7% per year, economic growth will be one of the main drivers of growth for e-commerce in ASEAN.
2. Growth in Internet Penetration
With increased internet access, more people will be exposed to e-commerce. Market research reveals that the lack of internet access is one of the key barriers keeping many ASEAN countries from fully engaging in e-commerce. Banks and telecom companies are taking initiative to bring greater internet penetration, and most people will be able to make online transactions in the next decade.
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