The latest report from Facebook & Bain Company has highlighted that the “new normal” resulted in new purchasing habits, which boosted digital consumption. E-commerce sales in Southeast Asia are estimated to nearly double to US$254 billion at the end of 2026.
While it is expected that digital spending will continue to expand amidst the pandemic, how much will SEA’s e-commerce companies grow as we’re entering the year-end sales period?
An e-commerce aggregator, iPrice Group, analysed the most visited e-commerce platforms in Southeast Asia to predict where the market is heading and what exciting developments we can expect from the year-end shopping frenzy.
Here are three key predictions on the success of Southeast Asia’s e-commerce industry for the rest of the year:
1. Online growth will be off the charts
The pandemic-induced digital shift is enhancing online consumption even more than last year. Data shows that the overall web visits of online shopping platforms across Southeast Asian countries remained positive in the 1H 2021.
With an average of more than 4 million web visits from January – June in 2021, the number has increased by 31% compared to the same period in 2020.
The Philippines experienced the most surge by 73%, followed by Indonesia (41%), Malaysia (34%), Singapore (10%), Thailand (9%), and Vietnam (7%).
The surge was probably driven by its ongoing marketing initiatives to supply value-driven shoppers during the new norm with flash sales, Ramadhan sales, 6.6 sales, and others.
In 2020, iPrice Group saw that the overall web visits grew at 26% from 1H to 2H 2020 across all six countries. As such, the company forecasts that the total average web visits will grow even more for the remainder of 2021.
Therefore, online marketplaces will potentially receive an additional average of 690 thousand visitors or more across the region, given that there are many upcoming year-end sales.
2. Influencers will continue to drive success to online sales
From footballers to Korean artists as brand ambassadors, along with recent partnerships with Jackie Chan and Hyun Bin, Shopee & Lazada, sparked consumer hype as we’re entering the year-end shopping sales.
Using this data, the study uncovers which campaign is the most successful. iPrice Group tracked the social sentiments of the latest 9.9 sales campaign that Shopee & Lazada have partnered with. While Lazada endorsed Hyun Bin (a South Korean Actor), Shopee had a partnership with Jackie Chan to boost the excitement for the upcoming sales period. From the data mentioned, It’s clear that influencers play an important role in driving traction with users.
Jackie Chan’s endorsement has the highest engagement per article. The campaign collaboration with Chan for 9.9 sales has over 59 articles published online, while there were 53 articles written about Hyun Bin’s endorsement.
However, the number of articles doesn’t draw a full conclusion. Hence, the study also investigates consumers’ reactions towards these partnerships. Who seems to be the more loved brand ambassador?
Observing the 3.8k social reactions recorded, Hyun Bin had the highest number of “love” reactions (79%), along with 19% “haha” reactions and 2% “wow” reactions from its partnership with the giant e-commerce company, Lazada.
Similar success was seen with the kung fu legend’s collaboration. Jackie Chan’s endorsement attracted 62% “love” reactions, 21% “haha” reactions, and 17% “wow” reactions. It looks like the social sentiments towards these two ambassadors have been positively received by people, according to the data.
It’s clear to see that influencers play an important role in driving excitement for the upcoming sales period. Thus, key e-commerce companies have enough incentive to involve influencers in their campaigns. But does this mean that they will increase the amount of consumer spending during year-end sales?
3. Steady increase of consumer spending year-over-year
Given the uncertain COVID infection rates, consumers will continue to stay at home and consequently forego holiday travel and family get-togethers.
More time spent at home means more opportunities for online shopping. iPrice foresees that Southeast Asian consumers would probably spend an average of USD40 on e-commerce by the end of the year.
The prediction is made by examining the average consumer spending across online marketplaces in the 1H 2020 and 1H 2019. iPrice found there was an increase of 26% in average consumer spending in 2020 when consumers spent about USD32.
Most purchases will be directed towards the categories of sports and outdoor, home improvements, and electronics. Lastly, even if consumer spending won’t increase as predicted, online retailers can still expect far more online web visits to their platforms this year.