Southeast Asia's e-commerce market is expected to double in size over the next six years and reach $370 billion by 2030, according to a report compiled by U.S. tech giant Google, Singapore's sovereign wealth fund Temasek Holdings and consulting firm Bain & Co.
The booming industry has attracted a host of Chinese companies — including Alibaba Group Holding’s Lazada, PDD Holdings’ Temu and ByteDance’s TikTok Shop, as well as Singapore giant Sea’s Shopee — all of which are competing aggressively in Southeast Asia, a region of 612 million people.
According to research from Google, Tamasek and Bain & Co., the gross merchandise value (GMV) of the six major digital economies in Southeast Asia, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, is expected to grow by 15% in 2024 to reach $263 billion, while revenue is expected to increase by 14% to $89 billion.
Rapid adoption of livestreaming, a sub-sector of e-commerce, has helped drive growth in the region’s online shopping business. The sales method, which allows consumers to buy products marketed during a live stream, is estimated to account for about 20% of the industry’s GMV this year, up from less than 5% two years ago.
TikTok Shop, which has nearly quadrupled its annual GMV to $16.3 billion by 2023, is now the second-largest e-commerce platform in Southeast Asia, according to a separate report by Singapore-based consultancy Momentum Works.
Low-cost shopping platforms Shein and Temu are also expanding their reach. Overall, the e-commerce boom in Southeast Asia has attracted the participation of Chinese tech giants.
Google’s annual joint report, now in its ninth edition, looks at the profitability of Southeast Asia’s core digital industries, such as travel booking, online media, and financial services, for the first time. The report also found that some industries, including e-commerce, transportation, and food delivery, have recovered from the pandemic and introduced innovations that have helped them become profitable.
That reflects a broader shift in the region’s industry from focusing on user growth to pursuing profit growth. For example, some e-commerce companies have achieved profitability through a combination of efforts such as consistent sales campaigns and optimizing seller fees.
