Continuing our previous article, ASEAN’s E-commerce Challenges, we’re proud to feature opportunities for e-commerce in ASEAN as well. Southeast Asia wants to be an e-commerce giant, with phenomenal growth rates surpassing those of the US and EU.
The sheer size of ASEAN alone makes it a viable market for e-commerce businesses. Not only does ASEAN consist of more than 600 million people, but 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 represents opportunities for both large e-commerce companies and smaller businesses of any size.
There’s huge growth potential in the e-commerce market of ASEAN. But this doesn’t mean the current market is insignificant now. The e-commerce retail market in just the 6 countries of Malaysia, Indonesia, Philippines, Singapore, Thailand, and Vietnam is worth over US$7 billion.
It’s important to note that only 29% of ASEAN’s huge population has 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, middle and affluent class populations will double in a few years’ time. With GDP per capita expected to rise by about 7% per year, economic growth will be one of the main drivers for e-commerce in ASEAN.
2. Growth in Internet Penetration
With more internet access, more people will be exposed to e-commerce. Market research reveals the lack of internet access is one key barrier keeping many ASEAN countries from fully engaging in e-commerce. Banks and telecom companies are taking initiative to bring greater internet penetration. Most people in ASEAN will be able to make online transactions by 2025.
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