ASEAN KEY DESTINATIONS
ASEAN lags in global e-commerce
LESS than one in six people from major ASEAN economies shop online which is an indication that e-commerce in the fast growing region is still in its infancy stages, according to a joint report made by a consulting firm and a research organisation.
The report ‘Lifting the Barriers to E-Commerce in ASEAN’ by A.T. Kearney and CIMB ASEAN Research Institute said ASEAN still lags when it comes to the e-commerce market. The six major ASEAN economies collectively account for less than one per cent of global online retail.
The report provides an overview of retail e-commerce across the six major ASEAN economies of Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam along with proposals to lift the barriers to unlock the region’s full potential.
According to the report, the retail e-commerce market offers the region an opportunity for cross-border trading particularly with the formation of the ASEAN Economic Community.
“E-commerce remains relatively underdeveloped in Southeast Asia, accounting for less than one percent of total retail sales, compared to rates of six to eight per cent in Europe, China, and the United States,” said the report.
On the other hand, the US, Germany, France, Italy, Spain, the UK, China and Japan combined accounts for 76 per cent of global retail e-commerce.
With the exception of Singapore, of which online retail comprises four to five per cent of retail sales, online retail in five other ASEAN economies accounted for only one per cent of retail sales.
But as the region’s growth is expected to boost purchasing power, improved Internet penetration and varied online retail options, the online retail market in ASEAN could grow as much as 25 per cent annually.
Annual gross domestic product (GDP) per capita is expected to grow at 6.2 per cent and this level of growth should create a young middle class that is more prone to shopping online. This will also be supported by increased access to the Internet.
“As mobile broadband spreads, consumers may shop online more and thus we can expect that channel to play a significant role in future e-commerce growth,” the report said.
The report said banks and telcos are developing innovative payment methods to make it easier for consumers to pay with their smartphones.
Increased offerings in the online retail space will boost online spending with major retail players having recently extended their positions into Southeast Asia.
In 2013, Rakuten launched a mobile marketplace in Singapore called Carousell and had been making substantial investments in Indonesia and Malaysia since 2011 and 2012.
In Singapore, local players such as HipVan, a specialised e-commerce site for design products such as home furnishings and fashion accessories, has expanded to Malaysia.
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