South-east Asia’s e-commerce market to hit nearly US$290 billion by 2029: study

[SINGAPORE] South-east Asia’s e-commerce market is set to reach US$289.8 billion by 2029, a study commissioned by payments platform 2C2P by Antom has found.

With a projected compound annual growth rate (CAGR) of 13.2 per cent between 2024 and 2029, the region’s e-commerce growth is expected to be the second-fastest among global markets, read a report of the study’s findings published on Wednesday (May 13).

India is set to book the fastest growth, with a projected e-commerce CAGR of 22.1 per cent over the same period.

Digital payments are expected to account for much of the growth across markets.

The study, conducted by the International Data Corporation (IDC), found that digital payments will account for 97 per cent of total e-commerce transactions by 2029, up from 89 per cent in 2024.

Cards, domestic payments and mobile wallets are forecast to remain the top three forms of digital payments.

In South-east Asia, domestic payments – which include real-time payments and local bank-based payment schemes – are projected to nearly double to US$92 billion in 2029, from US$45.1 billion in 2024.

The segment is expected to be “the largest contributor to South-east Asia’s digital payments sector in 2029, accounting for about 32 per cent of the sector (and) replacing cards”, 2C2P by Antom noted in a statement.

Mobile wallet transactions, meanwhile, are set to grow to US$79 billion from US$38.2 billion over the same period, increasing their share of the e-commerce market by three percentage points to 27 per cent.

Noting that 56 per cent of the region remains uncarded, 2C2P by Antom said that such digital payment solutions “address structural gaps such as low card penetration, large unbanked populations and limited access to traditional banking infrastructure”.

SMEs in focus

The study also included a survey of 600 small and medium-sized enterprises (SMEs) in six South-east Asian markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The survey focused on these companies’ business priorities, payment adoption and readiness for emerging payment trends.

SMEs are expected to contribute 58 per cent of total e-commerce in South-east Asia in 2029, up one percentage point from 2024.

IDC found that enabling broader SME participation in cross-border e-commerce could “drive a further US$20.8 billion in sales” by 2029, representing a 7.1 per cent increase in regional e-commerce value.

It noted, however, that “uneven digital maturity, especially in payment capabilities, continues to limit their ability to fully capitalise on e-commerce growth”.

For instance, about one-third of the Singapore SMEs surveyed reported high reliance on cash in day-to-day operations. Businesses cited data security concerns and integration issues as major barriers.

IDC said this suggests that “even advanced markets have SME segments that are reluctant to shift or struggling with issues that hinder them from fully adopting digital payments”.

It added that Singapore SMEs operate in an “advanced but highly competitive environment, requiring innovation and optimisation rather than basic digital tool adoption”.

Worachat Luxkanalode, group chief executive officer of 2C2P by Antom, noted that South-east Asia’s businesses contribute “more than 50 per cent of GDP in major markets and (employ) 64.6 per cent of the workforce”.

He noted, however, that many, especially SMEs, “are still navigating the complexities of digital transformation”.

“As payment ecosystems evolve rapidly across different markets, businesses of all sizes need solutions that can simplify operations, support diverse local payment preferences, and enable them to scale across borders.”