Southeast Asia’s growth during 2022-23 is projected to outpace most other markets such as the US, the EU, and China while its long-term growth will remain robust, said Bain & Company recently.
This is according to Bain & Company and Meta ’s annual SYNC Southeast Asia report which looks at the digital economy and the future of e-commerce in the region.
By the end of 2023, Southeast Asia is expected to maintain its projected growth at 5.1% compared with other markets such as the US (1.3%), the EU (2.1%), and China (4.7%) according to Bain & Company and Meta ’s annual SYNC Southeast Asia report.
The SYNC Southeast Asia study is based on a survey of about 16,000 digital consumers and gathered insights from interviews with over 20 CXOs across six Southeast Asian countries — Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Digital consumers surveyed are those who have made an online purchase in at least two product categories in the past three months and are above 15 years of age, Bain noted.
- Southeast Asia’s projected annual inflation rate from 2022 to 2023 is also expected to fare better than most of its peers.
- The region’s annual inflation rate is projected to decline from 4.2% to 3.3% by end 2023, outperforming the US (at 4.2% by 2023), the EU (at 4.3%), and India (at 6.0%).
- The digital consumer population in Southeast Asia is still growing steadily and is forecast to reach 370 million by end-2022, accounting for 82% of the total population of 15-year-olds and above. This figure is projected to rise further to 402 million by 2027, accounting for 88% by the end of the forecast period.
- Southeast Asia is seeing more foreign direct investment (FDI) being channeled into the region. FDI accounted for a greater proportion of total investment in 2021, at 17% versus 15% in 2015 and just 9% in 2009.
- Southeast Asia sees a higher penetration of e-Wallets, cryptocurrency and non-fungible tokens compared to most other markets such as China, the US, the EU and Japan, with almost 70% in Southeast Asia having used at least one metaverse-related tech in the last year.
This new evolution of digital consumers will undoubtedly be the driving force for Southeast Asia's eCommerce gross merchandise value (GMV) growth said Praneeth Yendamuri, Partner at Bain & Company.
"With longer term favourable demographic profile, and as Southeast Asia leads in the adoption of future technologies, businesses that focus on staying the course in the region, build a truly integrated channel strategy and necessary capabilities, make their supply chains resilient, and leverage new tools and technologies to engage with digital consumers will emerge as winners,” he predicted.
Highlights: eCommerce and integrated shopping experience
Post pandemic, the study found that Southeast Asian consumers are at a new stage of evolution in terms of ecommerce, Bain said. The followings are e-commerce-related highlights from the report.
- The consumer appetite for integrated shopping experiences that effectively blend online and offline services continues to drive digital commerce in the region.
- This openness of consumers to experimentation and engagement is also driving new behaviours with 63% of respondents having used business messaging in the past year.
- eCommerce marketplaces account for 51% of online spend, while alternative eCommerce platforms such as business messaging and live-shopping account for 22% of online spend.
- Social media accounts for almost half of online discovery, consisting of image feed (15%), videos on social media (21%) and related tools such as messaging (10%).