E-Commerce in Southeast Asia is growing fast, driven by the increasing adoption of Internet and smartphone technologies. Travel and tourism was the largest digital spending category in 2017, followed by product purchases via B2C E-Commerce, as well as media and entertainment.
Nearly one-half of online buyers in SEA purchase travel and leisure products and services online. Online travel sales are boosted by hotels, airlines and agencies that improve their services by adopting tech solutions in their daily operations to make booking easier. One more driver is the growing middle class that includes young, tech-savvy consumers. As a result, online travel aggregators and booking services, such as Indonesia’s Traveloka were among the highest-funded tech companies last year.
In 2017, the online travel sector generated more than two times higher sales value than that of physical products through B2C E-Commerce. Despite this recent sales history, by 2025, B2C E-Commerce sales of goods are projected to increase significantly, outpacing online travel to rank as the top digital spending category in Southeast Asia.
The online retail shopping sector is in early stages of development in most Southeast Asian countries, accounting for a small one-digit share of total retail sales. The Indonesian online retail market is expected to grow the fastest and remain the largest in the region through 2021, followed by Thailand. The increasing adoption of mobile and social commerce will be the main driver helping foster the online retail growth in Southeast Asia. However, the underdeveloped infrastructure is still posing a major barrier to further expansion of B2C E-Commerce.
For more information on this topic, see the report “Southeast Asia B2C E-Commerce Market 2018”.