Online shopping in Southeast Asia will continue to grow –analysts

Online shopping in Southeast Asia will continue to grow --analysts
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Online shopping in Southeast Asia will continue to grow, even after the coronavirus pandemic ends, according to analysts.

The rise of online shopping in Southeast Asia is attributed to constant buying of groceries and other essential items, based on the research of consultancy Bain & Company and Facebook.

A new report from the two firms revealed that the coronavirus outbreak gave a boost to e-commerce and other digital trends across the region. Over 7 million people worldwide were infected by Covid-19.

“Some of these trends are here to stay,” Praneeth Yendamuri, a partner with Bain & Company based in Singapore.

“One of the trends we identified was essential online shopping, and that’s here to stay,” he said during an interview on CNBC’s “Street Signs” on Tuesday.


Online groceries

Yendamuri pointed out that the online groceries is a huge category that is relatively under-penetrated because of logistics and other issues.

However, data showed that the sector increased by almost three times during the outbreak in Southeast Asia. One in three respondents said they planned to still purchase their groceries over the internet in future, the report says.

Total grocery spend in Southeast Asia reached around $350 billion. Industry experts emphasize that online grocery accounts for a fraction of that overall value. The sector is gaining traction.

Alibaba-supported Lazada, which caters to the region, reported that its online grocery sales in Singapore rose by four times from early April. This is when the city-state imposed movement restrictions as the number of coronavirus cases multiplied.


Southeast Asia’s digital economy plays a critical role in many companies. Facebook recently made an investment into Indonesia’s ride-hailing regional company Gojek.

A commonly cited research from Google is Singapore state investor Temasek and Bain’s prediction about the internet economy in Asia by 2025. Research says it would grow to a $300 billion industry due to the surge of e-commerce, ride-hailing, and digital payments.

There are over 600 million people in the region that could become potential customers of online shops. Their digital access is easier with the penetration of smartphones and improved internet connectivity. They are deemed a lucrative consumer base for tech companies like Facebook.

Digital systems

Yendamuri says the use of new apps in areas such as digital and social commerce and video streaming is another trend that will likely persist.

E-payments and digital wallet apps will provide consumers contactless payment options. These would give them a sense of safety as countries gradually lift their various degrees of national lockdowns, he said.

The report revealed a potential massive culture shift in Asia. People in the region are 1.5 times less likely to go out in the future compared to their American counterparts.

Telemedicine and digital health care services will remain in demand.

“A lot of consumers have used these services and find that the quality and the service levels they’ve gotten out of doing virtual checkups, consultations have actually worked for them,” Yendamuri said.

Bain and Facebook examined the YouGov survey data for April across the major Southeast Asian economies: Vietnam, Indonesia, Singapore, Malaysia, Philippines, and Thailand. It also covers interviews with business leaders and venture capitalists in the region.