Here’s a market overview of Southeast Asia’s online space that everyone in the industry understands so far:

  • The ecommerce market is expected to be worth 238 billion USD by 2025.
  • The region is still relatively young with only 1% of total retail GMV being generated online compared to 7.1% and 15.9% in the US and China.
  • There is a fast growing young & digital savvy population of 158 million who spend approximately 19.4 hours online per week.
  • Southeast Asia is the only truly ‘mobile-first’ region.

southeast asia ecommerce

  • The region is only a decade behind China’s booming online ecosystem because of the following:

Lack of offline retail infrastructure outside tier 1 cities

Surging domestic consumption spurred by growth in GDP/capita

Major capital investment into ecommerce businesses

Cash on delivery as a dominant payment method

Lack of cross-border ecommerce due to high import duties and taxes



So what do all of these numbers and comparisons mean? We take a deep dive into how these factors drive ecommerce forward in Southeast Asia and provide companies with a simple phased approach to consider before entering the market:

Almost Like China

The region is following China’s trajectory due to similar historical developments and ecosystem mentioned above. Southeast Asia is however more competitive due to it being an open market versus China’s closed one, making it easier for companies to enter.

Mobile Commerce

The leapfrog towards mobile is disrupting traditional desktop-first platforms and moving C2C ecommerce straight into mobile marketplaces such as Carousell and Garena-backed Shopee. The high smartphone penetration rate is also giving access to the rural and rapidly emerging consumer base as 85% and 79% of online shopping comes from outside of the major metro areas in Thailand and Indonesia. Thailands mobile growth exceeded developed countries like US and China within the first year 3G technology was launched with an average Thai user having 1.4 mobile phones.

Social Commerce

Browsing for items on social platforms and purchasing offline is a unique phenomenon in Southeast Asia where Lazada isn’t Thailand’s biggest ecommerce platform; Facebook and Instagram are.


An estimated one-third to half of total ecommerce GMV is happening on social platforms like Instagram, Facebook, and LINE in Thailand compared to 16% globally. Based on a survey done in Bangkok by ecommerceIQ, 48% of respondents indicated to have purchased something they found on  Facebook, Instagram, and/or LINE in the last three months. Page365, a startup that helps small retailers sell products via social media, estimated that social commerce is worth more than 500 million USD per year in Thailand alone.

Businesses have the opportunity to leverage the high popularity of social networks in the region to push ecommerce forward. Online transactions can be done via chat-apps and social media to reach out to Southeast Asians that prefer making ecommerce purchases through channels they’re already familiar with rather than a traditional website.


Disparate infrastructure and fickle government regulations make it hard for global brands to find a one-size-fits-all solution to enter the region.

High import duties are a barrier to cross-border ecommerce, which is why companies are recommended to operate locally or partner with a specialist with on-ground knowledge.

Singapore is an exception in Southeast Asia where cross-border businesses can thrive thanks to the high local demand for overseas goods and low custom duties.


The region’s consumers still rely heavily on cash on delivery (COD) with which 70% of online payments are made. Most C2C commerce happens via bank transfer as consumers are still reluctant to share their financial information online and less than 20% of the population (excluding Singapore) make online payments via debit or credit card.

Currently, there are no dominant payment platforms who have been able to create a solution that will replace COD in the region such as Alibaba’s alipay has been able to do in China.The region is making continuous efforts to raise awareness about e-payment to overcome this challenge not just with consumers but also businesses.

Knowing all of this, companies need to take a strategic approach if they are looking to leverage the next big opportunity for ecommerce in Southeast Asia. Sheji Ho, Group CMO of aCommerce shares a step by step phased approach that companies of any sector can follow.

A Step Approach to Enter Southeast Asia

1. Organic Demand from Overseas

If a company is getting organic inquiries about its business from Southeast Asia with no marketing push, it means they are receiving organic cross-border interest.Through those inquiries and additional research of the competitive landscape, the company should look into whether there is potential for its business to carve a niche and start in one country first as the fragmented market make it difficult to enter all markets at once.

The ECOMScape series details the current players in the following landscapes: Thailand, Malaysia, Indonesia, Singapore and the Philippines

2. Reaching The Local Consumer

Once demand has been identified, the company should begin testing ways to scale online initiatives to improve it.The best combination would be through local digital marketing and a local language website and landing page.

3. Local Entity & Fulfillment

Once businesses have proven that demand can scale, they are recommended to set up an entity nearby their target demographic for a more efficient local fulfillment and operations process, especially important for casodelivery cash reconciliation. If a company decides to operate outside its target market, the costs of high-custom duties would bleed them dry.

The only cases where it may succeed would be for  low custom duty markets within the region like Singapore and to a lesser extent Malaysia. But for companies based outside Southeast Asia, such as Taiwan, a local approach is required to tap into the growth markets like Thailand and Indonesia.

What Next?

In Southeast Asia, competition is welcome as it drives more innovation in the tech and ecommerce space. Although companies in the US such as Amazon have provided a glimpse of what business models could work, Southeast Asia is still an entirely new game that plays by its own set of rules.

Entrepreneurs aiming for this region cannot simply replicate the successful business models of the US.It may succeed in the short term but when the big players such as Amazon enter the market, they are going to wipe out competitors by offering a substantially better product as a result of technological, capital and human capital advantages.  

Looking towards China, the past decade of competition in the Chinese ecommerce space has resulted into arguably the most innovative market not just in retail but also in adjacent industries like finance and banking, with products such as Alipay Wallet and WeChat Pay.

In Thailand, the heavy competition between marketplaces like Lazada, Wemall and 11street will lead companies to avoid competing on economies of scale and price only and adopt a unique spin to its business model. We’ve noted a few well-known ecommerce players below and their progress since entering Southeast Asia.  

As ecommerce becomes more mainstream, the more traditional industries like banking, insurance and healthcare in Southeast Asia are also starting to adopt a digital strategy.

Competition will only increase as companies from across the globe look to leverage the urbanization and digitization of Southeast Asia. May the smartest, most swift ecommerce company win.  


Before you wind down from your day, here are the ecommerce headlines you should know.

1. Shopee marks rapid growth in Southeast Asia

Southeast Asian pure-play m-Commerce operator Shopee says it has reached $1.8 billion in annualised GMV just a year after its launch.

App-based Shopee operates in Singapore, the Philippines, Malaysia, Indonesia, Thailand, Vietnam and and Taiwan.

The Garena-backed company says it has achieved a month-on-month growth of 43 %, with 25 million downloads of its mobile app to date and 65 million product listings.

Read the rest of the story here


2. Retail ecommerce small but growing in Vietnam

However, despite all the optimism and the strong growth forecasted, retail ecommerce would still account for just 5% of total retail sales by 2020, if the target were to be reached, which puts Vietnam well behind Western countries.

Read the rest of the story here


3. Recommended Reading: Southeast Asia’s ecommerce future

The rate of digital adoption in Southeast Asia is unmatched. The Philippines sends more texts than any other country, and Jakarta is the world’s No. 1 city for tweets. There are more than 250 million smartphone users in the region.

Read the rest of the story here



It is hardly a secret anymore – ecommerce in Southeast Asia is an enormous $238 billion opportunity that has been under the global radar in the recent years. It’s no longer about whether businesses should have an online presence, but instead how they can stay relevant to their audience in a quickly crowding space.

Indonesia Ecommerce Landscape

ECOMScape: Indonesia details the growing ecommerce ecosystem as of 2016. Source: eIQ

One market that has time and time again stood out is Indonesia thanks to more accessibility to mobile devices, affordable data plans and a youthful demographic propelling social channels and social commerce to the leading activity on the internet. It is a clear goldmine for brands, retailers and investors alike to unlock over 250 million unrealized online shoppers.

So how are they going to do this? Well, Indonesia is a mobile-first country and its citizens update their social networking apps twice more frequently than games and fives times more than music/video apps according to a study by Baidu.

In the next three years, Indonesia is expected to have over 92 million smartphone users, up 67% from 2015. This will push many startups to skip desktop entirely and focus on smartphone friendly ecommerce products. New apps have been the popular way to reach customers, but large spending for development, maintenance, and marketing have restricted companies from finding long-term success. And what happens when app downloads start to slow down as currently happening in the US?


The rising global resistance to new apps

Almost 50% of smartphone users in the US did not install a new app last month while less than 25% of the ones who did returned to it after the first use. What’s even more shocking is a full 94% of revenue in the App Store comes from only 1% of all publishers, think Google and Facebook.  

Mobile isn’t dead but the opportunity is shrinking. So what does this mean for businesses scrambling to capture the attention of the world’s fourth largest population who prefers to use on average only 6.7 apps?

You don’t chase customers, you find them where they already are.

For the first time, messaging apps have surpassed social networks and that’s where chat commerce comes into the story.

Chatbot, chat commerce

Chat commerce isn’t the future, it is the present.

Chat commerce or conversational commerce is the intersection of messaging apps and shopping and is already a very familiar concept in the West. Businesses understand the importance of being readily available to their customers, especially as a poor customer service experience will drive 89% of them to a competitor.

According to Facebook, more than 50 million companies operate on its platform and send more than 1 billion business messages every month.

But having properly trained customer service reps to support hundreds to millions of personal conversations in parallel is difficult to scale for any business. Solution? Chatbot.

A chatbot is an AI (artificial intelligence) feature of a chat or messaging platform that simulates a human conversation with the user in order to provide them with the information or service they’re looking for.

Brands overseas like Taco Bell have partnered with Slack to allow customers to order and pay through the team communications platform.

Think about Siri who has been helping Apple users carry out tasks since 2011 or Amazon Echo, an at-home device by Amazon, which encompasses a chatbot named Alexa to read aloud weather reports, set alarms and more importantly, help customers order new products from Amazon.


Screenshot from Amazon Echo commercial.

These are only a few of many examples. Facebook Messenger also opened its platform earlier this year for businesses to build chatbots through its Messenger Send/Receive API.

The API will support sending and receiving text and also images and interactive rich bubbles containing multiple calls-to-action.

chat-bot-benefits, southeast asia chatbot

A chatbot can clearly offer a business great benefits to get closer to customers in a medium they are already familiar with, so why has there been little activity in Southeast Asia?

Call all chatbots

Southeast Asia has largely mirrored the West and particularly China in development of its ecommerce maturity. Yet, current chatbot growth has been stuck at the ‘idea phase’ – a lot of chatter and buzz about its revolutionary importance but no product.

“The reason why companies in Southeast Asia haven’t created chatbots isn’t because they don’t think the opportunity is there, but they lack the resources and most fundamentally – AI talent to build it,” comments Lingga Madu, Sale Stock co-founder.

No company has released a true commercial-scale, transaction-enabled MVP, that is, until now.

Sale Stock case study: Facebook Messenger’s first chatbot in Southeast Asia

One lesser talked about company has already begun testing its chatbot with Facebook, Indonesia’s most popular social channel. Sale Stock, the mobile first shopping platform widely popular among Indonesia’s young females, has become SEA’s first company to launch a chatbot that can handle end-to-end transaction on Facebook’s Messenger Platform.

Meet Soraya AI, a relatable, cheery chatbot who handles 100% of queries coming to Sale Stock’s Facebook Page and the brainchild of Facebook, Google, Palantir, and NASA engineers recruited by Sale Stock around the world.
sale-stock-chat-2, southeast asia chatbot

Soraya uses machine learning to shuffle through queries and decide whether to answer it autonomously or give recommendations to an agent instead.

Frequently asked questions such as “do you offer cash on delivery?” or “do you sell high heels?” are replied to almost instantly. In development since 2015, she can already handle 22% of all queries autonomously.

The beauty of machine learning is that the more information she receives, the smarter she becomes and the more accurate her answers will be.

Soraya has already improved response time by 20 – 40 times and currently replies within 60 s. That has granted Sale Stock a response time badge on their official Facebook page.

sale-stock-fb, southeast asia chatbot

Soraya has also been fed large amounts of past Sale Stock customer queries to enhance her intelligence. This combined with recent purchasing behavior and browsing history allow her to recommend consumers personalized products.

Buying the product is even more simple. Soraya asks for confirmation of the item, correct size and color, all within Messenger, and requests address and payment method. If it is a returning shopper, all previous payment information is saved so purchase is simply a click of yes.

sale-stock-chatbot, southeast asia chatbot

“Soraya was created to meet the needs of our customers, many of whom are living outside major cities on limited social media data plans where chat is free but browsing is not. Some have never even been exposed to digital shopping carts but chatting is second nature,” – Jeffrey Yuwono, Sale Stock President.

Trust is also a major concern that holds many Indonesians back from trying ecommerce. By creating a personable chatbot on a familiar channel, brands hope customers will feel comfortable sharing their personal details.

sale-stock-chat, southeast asia chatbot

Chatting with Soraya on Facebook Messenger

Sale Stock chat bot, Indonesia

What’s next for Sale Stock?

The company is already working to create viable chatbots for WhatsApp, LINE, BBM and SMS as they are the most popular messaging platforms their shoppers use. Sale Stock strongly believes in the Lean Startup methodology, “getting it out there as soon as possible to collect real, user feedback”.

“We’re still in the very early stage of our product and ironing out the bugs and adding features iteratively,” comments Madu.

All inquiries going to Sale Stock are monitored, independent of the channel source, on one platform created in house to control flow and fix any arising bugs.

The team hopes to fine-tune its technology to quite possibly launch SaaS in the future.

“The success of chat commerce depends on how well the machine can distinguish the details: context, intention, the slang, mix of dialects, and even the use of emojis so the customer never feels like they are chatting with a bot. The platform has to be robust enough to handle these typos and fringe use cases,” says Madu.

The future of chatbots

There has always been a fear of AI replacing tasks typically performed by humans, but customer support is a tricky area since personalization is at the core.

“As brand loyalty and exceptional customer service become the main priority for brands, companies simply cannot afford for bots to completely handle customer service and risk creating a negative experience. With that said, the live customer service representative will always have a place with the overall customer experience,” says Mayur Anadkat, Vice President of Product Marketing at call center software provider Five9.

The moment has not yet been reached when machine learning enables 100% accurate and instant replies to customers no matter the language, mix of dialect, slang or emojis – but it is in the foreseeable future. AI is here to enhance, not replace.

Not only will the rise of chatbots improve the reputations of brands but it will be expected of businesses by the next generation of shoppers. As Uber product manager Chris Messina put it, bots present a new, unpolluted opportunity to build lasting relationships with people.

Ultimately, the lack of friction is what makes the shopping experience a pleasant one and what will drive the A players to the head of the game.

By: Cynthia Luo

Still reeling from the weekend? Check out today’s ecommerce headlines.

1. FedEx Trade Networks expands Into Malaysia with Penang office

With our network stretching into Malaysia, we are well positioned to proactively respond to customer needs and support them in simplifying the complexities of international shipping,” said Udo Lange, executive vice president and COO, FedEx Trade Networks.

Read the rest of the story here


2. Black Friday online sales to hit a record-breaking $3 billion, over $1 billion from mobile

Black Friday is on track to set a new record by surpassing the $3 billion mark for the first time. It’s also expected to become the first day in U.S. retail history to drive over a billion dollars from mobile sales.

“The negative impact on online shopping we saw following the election has not been fully made up, but consumers are back online and shopping,” said Tamara Gaffney, principal analyst and director, Adobe Digital Insights, in a statement. “As spending ramps up on Black Friday, we are back on track. We still expect Cyber Monday to surpass Black Friday and become the largest online sales day in history with $3.36 Billion.”

Read the rest of the story here


3. What WeChat teaches about the power  of social commerce

Amazon is a minor player in China, with about 1% of the local e-commerce market. To drum up interest in its products imported from the U.S., Amazon just put a video ad on WeChat, the all-purpose mobile app, with a link guiding people to its online shop.

“WeChat marketing is completely different. It’s a test of your patience and your faith as well. You need to allow it to burn, to travel. Then it will take off.” Says Bessie Lee, CEO of WPP China.

Read the rest of the story here


4. It’s ‘Cyber Monday’ in America

A survey released on Sunday by the National Retail Federation and Prosper Insights & Analytics estimates that some 122 million Americans will shop online on Cyber Monday. That’s up only slightly from last year’s 121 million shoppers.

Read the rest of the story here

Rakuten has acquired Fablic, provider of C2C marketplace app, Fril, reports Japan Today.

The undisclosed, 100% stake has made Rakuten the sole owner of the Japanese app. Japan is seeing an increase in popularity in C2C marketplace platforms that make it possible to buy and sell speedily and at predetermined prices, as well as a transition away from auction services that involve a bidding process.

Fril launched in 2012 as Japan’s first C2C marketplace mobile app, and has cumulative downloads of the app now exceeding 5 million. 

In November 2014, Rakuten also launched Rakuma, a C2C marketplace app for use mainly on smartphones, and this is also seeing a rapid expansion in gross merchandise sales. Rakuten in Japan has considerably been performing better than its Southeast Asian branches, as the company has shut down operations in Singapore, Indonesia and Malaysia.

The combined monthly GMS of the two companies’ services already exceed several billion yen. The addition of Fril will further accelerate Rakuten’s dominance of the C2C market in Japan.

Rakuten is currently planning to allow users to use their Rakuten member ID to log into Fril, and implement point campaigns utilizing Rakuten Super Points. These features are already integral to the Rakuma platform. This will contribute to enhanced convenience for Fril users and broaden Rakuten Group’s overall user base.

By exploring ways to collaborate and enhancing on each other’s strengths, the addition of Fril into Rakuen’s ecosystem should further innovate the C2C landscape in Japan.

A version of this appeared in Japan Today on September 5. Read the full version here.

Missed the usual headline scan this morning? Here are today’s top stories.

1. ZhongAn is preparing for an IPO in 12-18 months

The Ant Financial and Tencent backed online insurance company targets young insurance buyers in the areas of automotive, health and online shopping. Read the rest of the story here


2. Indonesia’s Airbnb, Travelio, raises $2 million pre Series A round led by Gobi Partners

Travelio offers accommodation in hotel rooms, apartments, and private villas. Its unique proposition is that it gives travellers a chance to negotiate the price. Read the rest  of the story here.


3. Indonesian fashion ecommerce app ‘Lyke’ raises $4 million series A funding led by Holtzbrinck Ventures

Lyke’s app combines several online fashion and lifestyle retailers, allowing users to browse through products and make purchases without leaving the platform. Read the rest of the story here.


4. Kayne West: Retail visionary and mobile payments leader?

On average, 7% of transactions at the Pablo shops (Kanye’s pop-up stores) worldwide were through contactless payments. That blows away the US industry average, which is about 1%. And those percentages varied quite a bit by city. Read the rest of the story here.


5. Samsonite’s profit falls 12.7% , as online shopping crimps demand for luggage

The company, which is facing the most challenging market conditions since  2008, is shifting to online sales. Read the rest of the story here.