Pandemic driving South-East Asian shoppers online

Singapore

NEARLY eight in 10 people in Singapore will make an online purchase this year, as the novel coronavirus drives South-east Asian consumers online faster than earlier expected.

Singaporeans are also the most willing to splash out: Almost six in 10 shoppers drop at least US$50 on each online purchase - the biggest share of such "high spenders" in the region.

Regionally, some 310 million consumers in six key markets are tipped to shop online this year - which puts the level of e-commerce activity on track to breach previous five-year estimates in just one year, said an industry study released on Thursday.

Online spending across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam is now expected to be worth US$147 billion by 2025 - surpassing an earlier estimate of US$120 billion for the same period.

Rise in spending

Consumers are spending more this year than they did before, and buying goods from a wider range - especially groceries and cooked food.

"South-east Asia is a dynamic region and is fast growing to be one of the top growth engines for the global digital economy," said Praneeth Yendamuri, a partner at consultancy Bain & Co, which carried out the data analysis and modelling for the study.

"The number of South-east Asian digital consumers has grown exponentially and their consumption habits are shaping today's new norm."

The Web is now the preferred sales channel for 44 per cent of regional shoppers, up from 30 per cent last year.

And the amount each consumer spends on average is expected to hit US$172 this year and reach US$429 by 2025 - more than triple the per-consumer spend of US$124 in 2018.

The surge could be spurred by higher e-commerce engagement in Indonesia, the region's largest country, where gross merchandise value could nearly triple to US$72 billion in 2025.

Yet Singapore is not too shabby, with the value of its e-commerce market forecast to double to US$8 billion in the next five years. Some 59 per cent of shoppers here are high spenders, up from 54 per cent in 2019.

The study, which was commissioned by tech giant Facebook, polled about 16,500 online shoppers in May.

It found that 79 per cent of Singapore consumers will buy online this year, beating the regional average of 69 per cent; Malaysia is narrowly in the lead with an online share of 83 per cent.

But Singaporeans are also more conservative shoppers than their neighbours, even as consumers in Vietnam and Thailand are most willing to give new brands and retailers a try.

Across the region, 47 per cent of respondents said they would buy from stores that they had never heard of.

Yet only 27 per cent of Singapore consumers would do so, down from 38 per cent in a poll last year. Singaporeans were also likelier to buy from new stores only when deals were on offer, rather than when they found the stores' products interesting.

Similarly, just 33 per cent of Singapore respondents had switched their most-bought brand in recent months - below the 54 per cent average for the rest of the brand-hopping region.

These latest findings build on another poll from the second quarter of this year, which found that 57 per cent of regional consumers prioritised value in their decision-making.

Safe distancing "a catalyst"

Singaporeans had already opted to play it safer then, with an above-average 68 per cent citing "value for money" among the top three factors.

"The decline in consumer spending may pose a challenge for high-end products and bring back focus towards value-for-money items," Facebook and Bain said at the time.

Even so, Dhruv Vohra, director of digital natives and technology at Facebook, has now called pandemic-related safe distancing "a catalyst that brought more consumers online".

"Even with the easing of physical restrictions, we believe that these contactless and home-consumption habits are here to stay," he told The Business Times in an e-mail.

The report also named healthcare, education and entertainment as segments that could benefit from changing consumer trends, with home-based learning, telemedicine, gaming and live-streaming expected to grow.