South-east Asia e-commerce sales projected to more than double by 2030: DBS report
SINGAPORE – South-east Asia e-commerce sales are projected to more than double by 2030 as large platforms continue to solidify their hold in the region, according to the DBS NextWave South-east Asia report.
The report was launched on May 14 in partnership with market data and insights firm Cube.
Cube's data predicts that total e-commerce sales will grow from US$184 billion (S$239 billion) in 2024 to US$410 billion by 2030, which reflects a compound annual growth rate of 14 per cent. Physical goods are expected to account for about 90 per cent of the sales, with food delivery making up the rest.
'Over the past decade, hundreds of millions of consumers in South-east Asia went online to purchase products and meals for the first time,' the DBS report noted.
'Looking back, it all happened at just the right time. E-commerce became the biggest beneficiary of existing efforts to build out South-east Asia's nascent digital infrastructure in areas like 4G/5G connectivity, and the fast-growing online shopping market willed new solutions into being in areas like digital payments and logistics,' the report added.
Major e-commerce player like Alibaba-owned Lazada reported its first profitable month in July 2024. Singapore-headquartered, US-listed Sea posted its first profitable year in 2023, and also had a strong start to the year, with its e-commerce arm Shopee reporting a 28.3 per cent surge in first-quarter revenue.
Forward growth, however, will slow as most targetable consumers are already shopping online , the DBS report noted. But the major players are likely able to benefit from higher commission charges given their dominance. In 2024, Shopee was the first large platform to impose share fee increase of several percentage points, and its peers followed suit.
Mr Chua Shih Guan, DBS Bank's head of digital economy group, institutional banking, said: 'As the region's e-commerce sector matures, we are seeing a shift from simply offering promotions and discounts to more innovative and differentiated customer experiences, through investments in areas like AI-driven personalisation, smarter logistics and embedded finance.'
Mr Chua Shih Guan, DBS Bank's head of digital economy group, institutional banking, delivering the opening remarks at the launch of the DBS NextWave South-east Asia report on May 14.
PHOTO: DBS BANK
If faced with low disruption in the next few years, the 'Generation One' winners in the region, including Shopee, Lazada and Grab, will continue to consolidate market share and enjoy high profitability, according to a scenario projection in the DBS report.
However, it said this dominance may not be permanent. China's e-commerce landscape suggests that the dominant players can be challenged by newer platforms such as ByteDance and Pinduodo, when the latter were able to gain traction with innovative, immersive and frictionless shopping experiences.
Hence, the key is for the Generation One winners to compete on customer experience innovation, and Cube's co-founder Simon Torring said he expects to see a lot of innovation from inside these winners.
'Because they now have profitable core businesses, and with that, they will have the ability to take some concentrated bets [and] try new business models,' he said at the launch of the report.
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