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Five eCommerce Trends to Watch in Southeast Asia Listen with ReadSpeaker Our expertise

After sustained growth in the late 2010s as consumers adapted to home shopping during the pandemic, eCommerce is experiencing a period of transition in Southeast Asia. Rising living costs across the region mean consumers are value conscious. Browsing and price comparison in malls are regaining popularity.

Marketplace models are evolving as shoppers demand more products, better discounts, faster delivery, and flexible returns. The digital economy is a key driver of growth and job creation for governments. Investment in digital infrastructure and e-payment connectivity aims to overcome short-term challenges and position the regional market as a global hub of eCommerce innovation.

Here are five trends to watch.

1. Growing the Market

Hyper-growth rates are forecast to moderate, so eCommerce platforms will focus on two key challenges. Despite the expansion and diversification of mobile commerce in recent years, the top 30% of online spenders in ASEAN account for 70% of digital economy revenues. Therefore, reaching more customers and raising the average cart size are high priorities.

Digital infrastructure investment in lower-tier cities and rural areas will enable more people to participate in the mobile economy. The importance of last-mile logistics will increase. AI tools will help eCommerce platforms to segment more accurately and identify repeat users. Next-generation gamified promotions and rewards will incentivize customers to return. 

2. Adjusted Business Models

The post-COVID adjustment has been significant for e-marketplaces and brands. As shopping behaviors altered with the lifting of COVID restrictions in 2022, organic e-sales growth slowed. Customer acquisition became more costly and retention challenging. A push for profitability by e-marketplaces resulted in sizeable operational cost reductions.

In turn, brands are adjusting as eCommerce models evolve. Subsidies for promotions and activations provided by the platforms were eliminated. Instead of leveraging seamless flows of organic traffic, brands have had to pay for their marketing and build their customer bases. This new era of focusing on bottom-line growth remains in development.

3. AI Activations

“Decision intelligence” is a hot topic. It defines how generative AI can combine time-series data, mathematical modeling, and causal analysis to help retail platforms anticipate and influence consumer decisions. Powering eCommerce personalization with targeted campaigns, push notifications, and optimized search tools is now a reality.

Insatiable demand exists among consumers for fresh content. AI video and text tools can update can generate new information for large SKUs frequently. Analytics tools identify campaign responses across channels in real-time, enabling budget spending to be quickly redeployed to boost conversion rates. As these tools become more accurate and widely used, they will drive efficiency gains.

4. Livestream Goes Mainstream

Livestream broadcasting has evolved quickly from a disruptive direct-to-consumer sales force to a mainstream medium for connecting with consumers. Livestreaming is used by brands and platforms for various purposes. Primarily, livestreams are interactive shows that sell large volumes of health and beauty products and fashions to impulse buyers.

Livestreaming strategies are at an early stage of evolution as the format becomes more creative and competitive. In addition to high-volume selling, it is used to educate consumers about new product innovations and style updates and to test price discounting models.

5. The TikTok Influence

Platform models are adapting to the surging influence of social commerce, which is driving online sales across Southeast Asia. Short video app TikTok is a popular forum for brands and influencers to sell directly to consumers. In Indonesia, the region’s largest eCommerce market, TikTok promised to invest billions to promote in-app sales of products. Indonesia’s government then introduced a new law banning direct sales to consumers via social media.

TikTok subsequently acquired a 75% stake in Jakarta-based Tokopedia. Merging Southeast Asia’s most popular video app and an eCommerce platform could transform how curated social content shapes Gen Z shopping trends. It might also prompt lawmakers to pass similar new regulations elsewhere in the region.