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Treat Yo' Self: Southeast Asia's e-Commerce Sector to Hit $150 Billion by 2025 The region sees an average of 5 million e-commerce orders in a day

By Aparajita Saxena

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

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The e-commerce market in Southeast Asia has grown sevenfold since 2015, to $38 billion in 2019, far outpacing any other internet-based sector in the region, a recent study showed, adding the sector is expected to hit the $150 billion mark by 2025, thanks to more and more people using internet in the region.

Even though ease and convenience have fuelled the boom in e-commerce around the world, steep online discounts have played a bigger role, especially for big-ticket items like electronics.

In Southeast Asia, online shopping festivals organised by international, as well as homegrown companies, have risen: from 9/9 (9 September), to Singles Day, (11/11) which has helped Alibaba post record sales year after year.

A Google Trends report showed that queries related to vouchers, coupons, and promotions, typically given out by e-commerce platforms during shopping festivals, have more than doubled over the last four years.

Perks such as same-day, or two-hour deliveries have also incentivised consumers to purchase online, with shorter delivery times catalysing purchase of cheap, everyday items, such as groceries, clothing, medicines etc.

Gamification of e-Shopping

Leading e-commerce apps in Southeast Asia have tapped the "social media influencer" culture, to enable online shopping-related content, such as "unboxings" of products, followed by reviews.

Limited time offers, where customers are given only a few minutes to check out items from their baskets if they want to avail deep discounts, have also helped drive online sales.

The e-commerce industry has inadvertantly given rise to several logistics players in the region, which then compete with each other on delivery times, and cost of operations so that they can bag contracts with big online shopping players, again making the system more conducive to attract consumers to the online shopping ecosystem.

But being forced to let go of profit margins to attract buying customers online, e-commerce companies in the region have turned to supply-side monetisation, by offering value-added services for a fee to its sellers, such as logistics, inventory management, and advertising, the joint study between Google, Temasek, and Bain & Co added.

Aparajita Saxena

Former Deputy Associate Editor, Asia Pacific

Aparajita is Former Deputy Associate Editor for Entrepreneur Asia Pacific. She joined Entrepreneur after nearly five years with Reuters, where she chased the Asian and U.S. finance markets.

At Entrepreneur Asia Pacific, she wrote about trends in the Asia Pacific startup ecosystem. She also loves to look for problems startups face in their day-to-day and tries to present ways to deal with those issues via her stories, with inputs from other startups that may have once been in that boat.

Outside of work, she likes spending her time reading books (fiction/non-fiction/back of a shampoo bottle), chasing her two dogs around the house, exploring new wines, solo-travelling, laughing at memes, and losing online multiplayer battle royale games.

 

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