Asean-6 online spending to hit US$150b by 2025, driven by Covid-19: Report
SOME 310 million consumers in key South-east Asian markets will make online purchases this year, amid the deadly novel coronavirus pandemic - a surge from 250 million such consumers in 2018, a new report suggested on Thursday (Aug 6).
The amount that each consumer spends on average could also jump to US$172 this year, the poll of nearly 16,500 online shoppers found. The per-consumer spend is projected to hit US$429 by 2025 - more than triple the US$124 in 2018.
Indeed, tech giant Facebook and consultancy Bain & Co, the firms behind the survey, now expect the level of online consumption in the region to breach their previous five-year estimates in just one year, as the shift to online habits has picked up faster than expected this year. .
Online spending across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam is tipped to be worth US$147 billion by 2025, said the study.
Such growth - from about US$31 billion in 2018 - exceeds the firms’ earlier forecast of US$120 billion in online sales revenue by 2025. About half of Asean-6 online retail value is expected to come from Indonesia alone.
Dhruv Vohra, director of digital natives and technology at Facebook, called pandemic-related safe-distancing measures in the region “a catalyst that brought more consumers online”.
He told The Business Times: “Even with the easing of physical restrictions, we believe that these contactless and home-consumption habits are here to stay. For example, we’ve seen the majority of recent first-time online purchases have been in grocery and food delivery in the past three months.”
Healthcare, education and entertainment are key consumer segments that also stand to benefit, with a rise in home-based learning, telemedicine, gaming and live-streaming, the report added.
It suggested that Internet and technology firms could look to tap some US$8.7 billion in South-east Asian-based venture capital and private equity funds’ unspent finance.
Said Bain partner Praneeth Yendamuri: “South-east Asia is a dynamic region and is fast growing to be one of the top growth engines for the global digital economy.
“The number of South-east Asian digital consumers has grown exponentially and their consumption habits are shaping today’s new norm.”
Concluding that “the rise of the digital consumer won’t happen slowly in the next five years”, the report said: “Large brands should make their move by, among other things, preparing for an omnichannel future, being a leader in discovery-led e-commerce, building a reputation for reliability, and recognising the challenge posed by insurgent brands.”
The study also found that customers in the region are fickle about brand loyalty, with about half of respondents having changed their most-purchased brand in the last three months.
Consumers also visited an average of 5.2 websites before making a purchase - up from an average of 3.8 websites last year - with lower prices and product quality the top factors involved.
The online survey, which was carried out in May this year, was commissioned by Facebook, while Bain conducted the data analysis and modelling.