E-Commerce Is Accelerating the Rise of a Common Southeast Asian Consumer Market
SINGAPORE, Sept. 15, 2018 (GLOBE NEWSWIRE) -- The rapid spread of e-commerce and embrace of digital technologies are binding together the economies of the ten members of the Association of Southeast Asian Nations into one of the world’s largest emerging consumer markets, helping fulfill a decades-old aspiration of the region’s leaders. This is among the key findings of a report titled How the Digital Revolution Is Integrating Southeast Asia’s Consumers, which The Boston Consulting Group (BCG) is presenting today in Singapore, in a partnership with the Singapore Summit.
This digital revolution has been aided by the efforts of many innovators and entrepreneurs to drive a regional strategy across ASEAN, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Social media, the growing reach of e-commerce platforms, and investments in logistical infrastructure are helping connect buyers with sellers across Southeast Asia.
As a result, e-commerce is projected to grow explosively by 36% per year through 2025, when it will reach around $88 billion. E-commerce is also projected to account for 6.4% of retail sales in ASEAN by 2025, compared with less than 1% today. This will create enormous new opportunities for companies to reach the region’s middle-class and affluent consumers, whose ranks are projected to reach 400 million by 2020.
“A common market is emerging, due to similar consumer themes developing across ASEAN,” said Aparna Bharadwaj, a BCG partner who leads the firm’s Centre for Consumer Insight and its Marketing, Sales & Pricing practice in ASEAN. “Affluent consumers are growing more rapidly than the emerging middle-class. To capture the enormous opportunities, companies will not only need an ASEAN-wide strategy. They will need a digital ASEAN strategy.”
The rapid spread of e-commerce is also likely to help keep Southeast Asia’s economic prospects strong. The region’s combined population is larger than that of the European Union and nearly double that of North America. Its combined GDP of $6.5 trillion, measured in purchasing power parity, is the equivalent of the world’s fourth-largest economy in 2017. With a projected compound annual growth rate of 5%, GDP is on track to nearly double by 2030.
Several powerful megatrends are accelerating the growth of e-commerce:
-- Rising affluence: The percentage of Southeast Asians with middle-class or affluent incomes is projected to rise from 40% now to 64% in 2030. -- Increasing urbanization:Between 2015 and 2030, the percentage of the population in Indonesia, the Philippines, Thailand, and Vietnam living in cities is projected to rise from 48% to 57%. -- Growing demand for convenience:As people spend more time commuting to work, and as traffic congestion grows more severe, Southeast Asian urbanites are fueling the so-called on-demand economy.
The widespread adoption of digital technologies by consumers is making it easier for companies to capitalize on these trends. Whether they live in cities or rural areas, Southeast Asians spend a remarkably large amount of time online—around nine hours a day on PCs and tablets and four hours on smartphones, in the case of the average Thai, Malaysian, and Indonesian. Southeast Asian consumers also are fairly unique in that they frequently engage directly with sellers and make purchases through social media apps.
“Digitalization is making it increasingly possible for companies big and small to gain access to Southeast Asian consumers long separated by geography and a wide variety of languages and cultures,” said Vaishali Rastogi, a BCG senior partner who leads the firm’s business in Southeast Asia. “Companies need to engage with the rich new market segments that span Southeast Asia by analyzing the immense data generated by connected customers.”
Digital integration is still in its early stages, and different tariff and regulatory regimes across ASEAN will continue to have an impact on the physical movement of goods. But businesses can help ease cross-border data flows by working with the region’s governments to update regulations and improve data privacy and security. “Businesses can help governments gain a better understanding of how the evolving digital economy can be mobilized to boost economic growth,” said Michael Tan, a BCG partner and coauthor of the report. “By accelerating digital integration, ASEAN can become one of the world’s greatest growth zones for decades to come.”
A copy of the report can be downloaded here.
To schedule an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or email@example.com.
About The Boston Consulting GroupThe Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit bcg.com.
About Center for Customer Insight (CCI) The Boston Consulting Group’s Center for Customer Insight (CCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG’s various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCI is sponsored by BCG’s Global Advantage and Marketing, Sales & Pricing practices. For more information, please visit www.bcg.com/expertise/centers-accelerators/center-customer-insight/default.aspx.
About Singapore Summit The Singapore Summit, supported by the Singapore Economic Development Board, GIC, the Monetary Authority of Singapore and Temasek, is organized to bring together business and thought leaders from around the world to discuss future-oriented topics in business, economics, finance, and geopolitics. The by-invitation event is attended by Chairmen, Chief Executive Officers and prominent thinkers from Asia and globally who engage in discussions and exchange perspectives on opportunities and challenges that could impact regional and global growth, prosperity and stability. More information about the Singapore Summit can be found at www.singaporesummit.sg
The Boston Consulting GroupEric GregoireGlobal Media Relations Manager
Tel +1 617 850 3783Fax +1 617 850 firstname.lastname@example.org