With India on one side and China on the other, the Southeast Asian market has in the past often been overlooked by international brands as being too disparate, too diverse, and simply too challenging to take on. Those brands who have tried to enter the market have often been knocked back, or even knocked out entirely, due to a fundamental failure to understand the real dynamics that make up this sub-region of nearly 700 million inhabitants.
Nevertheless, a series of macro-trends in recent years have meant that it is now an imperative for global retailers, e-commerce merchants and more to make plans to move into the market in a significant way. These trends include:
- Slowing retail spend in developed markets (eg. just 0.8% Western European average YoY growth in 2016)
- Consolidated markets, especially in e-commerce, both in Western and developed Eastern markets
- Faltering disposable income growth in developed markets (eg. Just 2% YoY growth in 2016 in USA)
- Population stagnation in many developed markets – 0.24% growth Western Europe, 0.73% in USA
On the flipside and as you can see from the infographic below, the situation in Southeast Asia is far more vibrant. From the exceedingly young population to the remarkably high mobile phone penetration rate, from the near double digit retail growth through to the burgeoning e-commerce spend, there is a great deal to be interested in.
Furthermore, savvy merchants and vendors alike who are moving into the region see the opportunity both in the strong numbers but also in the weaker metrics too. For example:
- The rapidly expanding native fintech community is competing with and increasingly partnering with local banks to increase access to financial services
- Affordable smartphone devices for as little as $20 are being adopted in rural areas and are giving communities internet access for the very first time
- Projects such as Facebook’s internet.org are giving first time access to the web for many as well as exposure to e-commerce services
- Rapidly improving infrastructure from telco networks to logistics services are extending the availability of e-commerce outside of metro areas to Tier II and III cities
All of this is leading experts to predict a 650% growth in the internet economy in the decade between 2015 and 2025- with a predicted market size of $197 billion. Merchants around the world have recognised that this is a market that they simply cannot ignore, which is why we have seen inroads being made both by Alibaba and by Amazon. They will not be the last.
If you would like to find out more about the opportunity presented by the growing Southeast Asian digital economy and how your business can best take advantage, contact firstname.lastname@example.org or download the brochure for Seamless Asia, our two day conference showcasing the best of Asian commerce.