E-commerce sales in South-east Asia to more than double to US$410 billion by 2030: DBS report
[SINGAPORE] E-commerce in South-east Asia has reached profitability in 2024, with regional sales expected to more than double from US$184 billion last year to US$410 billion by 2030 – a 14 per cent compound annual growth rate over the period.
This was one of the key findings of the DBS Nextwave Southeast Asia 2025 report that was released on Wednesday (May 14). This report is the first edition in a series exploring Asia's digital economy and was developed in partnership with market data and insights firm Cube.
The report noted that e-commerce sales in the region today has increased from US$4 billion to more than US$180 billion between 2012 and 2024, as more consumers embrace e-commerce as their preferred mode to purchase goods.
It added that the likes of Shopee, Lazada and Grab were among the key winners of this growth as they achieved profitability, as increased consolidation among the top platforms in recent years have seen them gain market share from the smaller competitors.
These larger platforms currently command more than 70 per cent of total online sales in South-east Asia, with many smaller firms shutting down due to competition and market dominance.
The report said the factors contributing to the e-commerce giants' profitability include greater consolidation, commission fee increases and a greater prioritisation of core business offerings.
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'Several also invested in vertical 'e-commerce-adjacent' business models – such as warehousing and last-mile delivery – to drive operational efficiency and improve customer service,' the report said.
'There is now a class of profitable and entrenched winners who guarantee greater stability while simultaneously making it harder for new entrants to compete.'
Over in China, major players such as Alibaba experienced declining market shares from 2015 to 2024 due to stiff competition from newer entrants such as ByteDance and Pinduoduo.
And in the US, which is seen as a more mature e-commerce market, top platforms such as Amazon and MercadoLibre largely maintained their market shares, while smaller entrants provide specialised e-commerce experiences to cater to a more diverse set of preferences from consumers.
According to the DBS report, the US is where advanced digital infrastructure and consumer preferences have shaped a more diverse online landscape.
'Convenience-focused platforms Amazon and Walmart share the market with a long tail of omni-channel players and specialised e-tailers. The US market offers a clue that South-east Asia's consumers may seek a more diverse set of e-commerce experiences over time,' the report said.
What future entrants should be aware of
Investors prefer more sustainable business models and realistic projects to provide their funding to. This is even as they conduct more rigorous due diligence, suggesting a greater difficulty in attracting funding for new entrants.
The report said that investors prefer companies with proven business models, such as personalised shopping experiences, to grow customer loyalty, which shows future growth potential in their market shares.
Chua Shih Guan, head of Digital Economy Group, Institutional Banking at DBS, 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.'
'We believe these platforms will grow profitably and play a crucial role as conduits for the next wave of South-east Asian innovation,' says DBS' Chua Shih Guan. PHOTO: DBS
Entrants should also focus sustainable growth such as seeking balanced capital structures with a focus on credit-backed growth to lower the cost of capital.
For example, utilising credit reduces costs compared to equity due to more tax-deductibles and the use of credit not diluting existing shareholders' equity.
Other tools that can be capitalised are new lines of financing such as term loans to finance specific projects and revolving credit which provides companies to a line of credit that can be drawn as needed.
'We believe these platforms will grow profitably and play a crucial role as conduits for the next wave of South-east Asian innovation. This evolution may also require founders to pair fundraising with credit solutions earlier on in their journey,' said Chua.
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