February 2, 2024 
Ecommerce revenue in Southeast Asia (see Fig.1) is expected to grow significantly in Southeast Asia with ecommerce leader in Southeast Asia, Indonesia, forecasted to grow from $37.48 billion in 2023 to $60.63 billion in 2024. The ecommerce revenue growth trends of Singapore, Malaysia, Vietnam, Thailand, Philippines, and Indonesia over the period till 2028 all show a growth of over 60%.
Fig. 1 Ecommerce revenue forecast of selected Southeast Asia countries. Source: Statista
Internet penetration in most of the Southeast Asian countries is very high at 65-75%. In most of these countries, social media usage is also very high and data shows that social media video is the top channel for discovery of products. Account to a recent report published by Facebook and Bain, consumers in the region have shown greater interest in buying goods online in an average of 8.1 categories with Indonesia leading at 8.8 categories on average, following by Thailand at 8.3 and Philippines at 8.2.
Ecommerce sellers aiming to enter the Southeast Asian markets have two options to enter the market. These include setting up their own website on an ecommerce shopping platform such as Shopify, Wix and Big Commerce but would be well advised to remember the different languages that consumers in these countries speak and read and the customer facing site must be in the local language for this to be successful. The other option is to sell on one or more of the many regional marketplaces, which are popular with customers, and which also offer language translation services by default. Some of the more popular marketplaces include Lazada, Shopee, Tokopedia, Blibli, and Zalora. Selling on these marketplaces provides an added advantage since these marketplaces provide payment processing, marketing, advertising, and even warehousing and delivery support. In countries such as Indonesia, Vietnam and Thailand, social commerce as a sales channel is an attractive proposition since a significant part of the population purchase on these channels.
Selling on marketplaces has an additional cost component for sellers and the cost structure varies according to the marketplace used. A sample of the charges involved is shown in Fig 2.
Fig 2: Indicative marketplace charges at Shopee and Lazada in Singapore.
A seller not based in the country where the item is being sold must be familiar with the legal and regulatory requirements in each country where there will be duties for import and taxes applicable. There are thresholds in each country below which a no duties or lower tax rate is applied and above which a different tax rate is applicable.
Infrastructure is not uniform in all the countries in Southeast Asia and logistics and last mile delivery can often be a challenge in some countries. For example, Indonesia with its archipelagos of more than 17000 islands, poses a natural challenge to do last mile logistics efficiently. Road and rail infrastructure is not adequate and the ports in many of these islands are small with limited cargo handling capacity and there is lack of efficient warehousing systems thereby making logistics costs expensive.
A new seller in SEA would do well in food and beverage, home and living, and apparel and beauty categories, which show the strongest potential for growth according to a recent report by Mckinsey.
A new seller in Southeast Asia (SEA) would do well to start with one of the more popular marketplaces in each country where they would like to sell. In all the countries in SEA, Shopee and Lazada are the top marketplaces to sell except in Indonesia where Lazada is the third popular marketplace behind Shopee and Tokopedia. Shopee also provides its own logistics services and language specific customer service in each country it operates in, in addition to Shopee guarantee that provides payment security to both the buyer and seller. Lazada provides multiple payment options in addition to COD (Cash on Delivery) which can be a key differentiator in markets such as Indonesia.
By carefully picking the product categories to sell in and listing the products in the leading marketplaces in the region, a seller can grow successfully in the SEA markets.
