Statistics show that the digital economy in Southeast Asia will reach a trillion-dollar level, with a huge increase in e-commerce. And China has an extremely high-quality supply chain. In terms of cross-border e-commerce, Chinese cross-border e-commerce delivers Chinese high-quality goods to the Southeast Asian market through B2C, B2B, etc., and there will be more room for imagination in the future.
At present, China's cross-border e-commerce in Southeast Asia has formed a complete ecology. In terms of the market, the initial selling and trial stages have basically passed, and now it has entered a new stage of building product strength and refined operations. High cost performance will be in this stage. more evident in the market.
Below, aida will share with you the development trend of e-commerce in Southeast Asia and the e-commerce environment, as a reference for merchants who want to expand the Southeast Asian market.
First, the six major trends in the development of the Southeast Asian market
First, the three major driving factors of the overseas market in Southeast Asia
1. The cultural environments of Southeast Asia and China are highly similar;
2. The advantages of China's supply chain are basically complete;
3. The support bonus of the platform in brand going overseas is very obvious.
The platform’s support for brands going overseas mainly includes:
1. All platforms facing Southeast Asia have brand support plans;
2. The platform has traffic tilt in terms of brand going overseas;
3. The platform is integrating various service resources for going overseas in Southeast Asia to provide one-stop support for brands going overseas.
The formation of these three driving factors has also allowed many excellent domestic brands to make new attempts in going overseas in Southeast Asia, and even achieved relatively good results.
Second, the scale of the digital economy in Southeast Asia will reach trillions of dollars
In 2021, the scale of the digital economy in Southeast Asia will be 174 billion U.S. dollars. According to some institutional analysis, it will grow 7-8 times by 2030, which means it will reach 1 trillion U.S. dollars. The huge volume of the digital economy will have huge room for development for the development of e-commerce in Southeast Asia.
Third, localized operations will occupy a greater weight
In the future, if you want to gain a foothold in the Southeast Asian market, you need to speed up localized operations, and the selection of products and services must be close to local users.
Fourth, social e-commerce in Southeast Asia is growing rapidly
According to the survey, among the most popular shopping methods in Southeast Asia, shopping on social media accounted for 78%, and shopping on e-commerce platforms accounted for 91%. Shopping popularity on social media has approached that of e-commerce platforms. Some organizations predict that in the next five years, the market share of social e-commerce will account for 60%-80% of the e-commerce market in Southeast Asia. This is quite different from the structure of the domestic e-commerce market.
Fifth, young consumers dominate the e-commerce market in Southeast Asia
The e-commerce market in Southeast Asia is dominated by young consumers, with an average population under the age of 35 accounting for more than 50%. In Vietnam, the Philippines, Indonesia, and Malaysia, the proportion of the population under the age of 35 has reached more than 50%, or even more than 60%, which is a typical market dominated by young people.
Sixth, various services in the Southeast Asian market must conform to the consumption characteristics of young consumers
For example, the rise of the "pay first" model, merchants judge the credit level of the consumer through the payment platform, and allow him to pay in installments if there is no problem. For consumers, in installment payment, if there is a problem with the merchant's service, the consumer can immediately suspend the payment, so the rise of the enjoy-then-pay later model proves that the characteristics of young consumers in this market are more obvious.
In China, many consumers are willing to pay in one lump sum, and not many people are willing to pay in installments, and the younger people are more in need of this model.
At the same time, in terms of the growth forecast of the pay-as-you-go model, the proportion of young people under the age of 35 in Singapore is much smaller than that of several other countries, so Singapore’s growth space is relatively small, and the other countries under the age of 35 In countries with a relatively young population, the growth expectation of pay now is very large.
Secondly, the development environment of e-commerce in Southeast Asia
First, the economic environment in Southeast Asia
The GDP growth rate of major countries in Southeast Asia is higher than the global average, so this market is a typical incremental market. We are constantly using innovative methods to capture more market increments, and at the same time promote the accelerated release of this market increment.
Second, the e-commerce environment in Southeast Asia
According to the forecast data of the research institution E-Conamy, there will be 5 Southeast Asian countries among the top 10 global e-commerce growth rates in 2022, and China's e-commerce growth rate will fall outside the global TOP 10 for the first time.
Southeast Asia has a huge increase in e-commerce, and China has an extremely high-quality supply chain. At this time, in terms of cross-border e-commerce, we must firmly take export as the leading factor, give full play to the advantages of the supply chain, and provide services through B2C, B2B, etc. This market transports China's high-quality supply chain and commodities, and there is more room for imagination in this regard.
Third, online shopping groups in Southeast Asia
The online shopping penetration rate of Southeast Asian netizens is as high as 80%, which is higher than that of my country's 73%. Southeast Asian netizens generally like to buy things online. Users in Southeast Asia have a relatively large "Internet addiction", and the time spent online far exceeds that in China and the United States. According to statistics, users in China and the United States spend 5-6 hours online every day, and Southeast Asian countries spend 7-10 hours a day, and the overall time is relatively long.
Fourth, the situation of Southeast Asian companies going overseas
According to Ebrun.com's survey of overseas companies, about 50% of the interviewed companies have only launched cross-border overseas business in Southeast Asia in the past three years, and Singapore and Malaysia are the most popular. In 2021, 70% of the interviewed companies have annual sales of more than 10 million yuan, 30% of the interviewed companies have annual sales of more than 50 million yuan, and 80% of the interviewed companies have sales growth of over 40% year-on-year.
Among them, enterprises with a growth rate of 80%-100% accounted for the most, accounting for 25.39%. The average net profit margin of the interviewed companies is 11.88%, and the profitability is generally high, because Anker's net profit margin is 7%-8%. This is also in line with the analysis we made at the beginning. This market is still a market with obvious incremental characteristics, and the profit margin of enterprises is relatively high.
In terms of categories, beauty and personal care, shoes and bags, and clothing accessories accounted for more than 30% of the entire category. The recognition of Chinese products is relatively high, and 80% of the interviewed companies’ product market share has increased year-on-year.
Fifth, economic and trade relations between China and ASEAN
In 2021, ASEAN has become my country's largest and fastest-growing trade partner in terms of import and export. Moreover, RCEP officially came into effect on January 1 this year. Cross-border e-commerce has a series of benefits in reducing tariffs and improving customs clearance efficiency.
With the continuous influx of new players, Chinese and foreign practitioners are also jointly building a cross-border e-commerce ecological map in Southeast Asia. China's Southeast Asian cross-border e-commerce has formed a very complete ecology, including B2B platforms, B2C platforms, and independent stations, and supporting services include financial services, technical services, logistics services, and marketing services. There are a large number of Chinese e-commerce service companies in the ecology.
Sixth, commodity demand in Southeast Asia
Although the demand for goods in Southeast Asian countries is not the same, Chinese sellers have already explored some methods of product selection from actual combat.
For example, when selecting products, Chinese sellers will search for popular products on major platforms, explore business opportunities in the category from the localized perspective of the target market, and use social media and communities to understand trends. At the same time, our sellers have already done some research on the preferences of the entire market and users in Southeast Asian countries.
In Singapore, Chinese products are highly accepted, and the price sensitivity is relatively low, but you must buy authentic products, they pay great attention to products and services.
In Vietnam, the acceptance of Chinese products is relatively low, but there are many young people who like entertainment and promotion equally, and are keen on new categories. Therefore, Chinese sellers have formed a certain methodology from product selection, market insight, and user insight.
The Indonesian market is also worthy of attention, because various institutions predict that in 2025, Indonesian e-commerce will account for a very high proportion of the entire Southeast Asian region. Some institutions believe that Indonesian e-commerce will account for more than 40% of the entire Southeast Asian region. However, the Indonesian government encourages local trade, and there will be certain policy thresholds for the access of cross-border e-commerce. Therefore, aida suggests that when entering the Indonesian market, a localized operation strategy must be formulated, and cross-border e-commerce and localized operations should be two things. combined.
The average unit price of goods in Southeast Asia is in the range of US$17-62, and the products with the largest sales volume are mainly below US$25. Lazada and Shopee are the main shopping platforms for Southeast Asian consumers. Of course, we also see Alibaba’s international stations, independent stations, etc. etc. also play a more active role in this market.
Generally speaking , in the cross-border e-commerce market in Southeast Asia, the initial stage of selling goods and trials has passed, and now it has entered a new stage of building product strength and refined operations. Online shopping is affected by many factors, but "Value For Money" and high cost performance will go further in this market.
We have been focusing on cross-border e-commerce for seven years, providing merchants with one-stop solutions for going overseas in Southeast Asia. If you are interested in the blogger's articles, please follow the recommendation, or private message for consultation.