Southeast Asia: Surviving and Thriving in the Digital Economy

Special Reports

Southeast Asian countries swept the top four spots for mobile ecommerce adoption rates: Indonesia, Thailand, Philippines, Malaysia;  over 72% of Internet users did mobile online shopping the past month —  compared to the global average of 55.4%. 

There have also been shifts in online shopping. From Nintendo Switch to hand mixers, consumers look for things they may not have previously bought digitally, and nearly three quarters have the intention to change their future shopping habits for good – with Indian and Singaporean consumers reporting the strongest intention. The demand for delivery of all kinds has also surged. In Singapore, searches for bubble tea delivery peaked last April. On grab, bubble tea orders were 60% higher in April compared to March. In Indonesia, only 20% were buying groceries online back in 2019; that number rose to 31% during the pandemic year. 

The use of ride-hailing services in this region is high and rapidly increasing. In the third quarter of 2020, the percentage of ride-hailing app users in Indonesia each month increased by 16.3 percentage points to 65.3%, more than twice the global average.

Unlike Uber and its western counterparts, ride-hailing giants in the region, Grab and Gojek, strive to be the everyday super app, from rides to food to fintech and more. In the year of lockdown, the transport side of the business may have slowed down, but these apps adapted, expanding their services needed by consumers during social distancing measures. They shifted their focus to on-demand delivery verticals. In fact, Gojek’s food delivery business surpasses motorbike-hailing in its home market of Indonesia. Now, with or without restrictions, consumers in this region indeed got used to hiring wheels for anything and everything, partially explaining Grab’s ability to bounce back to pre-pandemic revenues in Q3.

Yet, with this much shopping and spending, cash (or cash on delivery!) remains king for some countries here. Indonesia and the Philippines, for example, have less than 3% credit card penetration rate. The uptake of mobile payment services may be slightly slower than global counterparts, but it’s growing. E-wallets and bank transfers represent the emerging wave of payments in this region. Even in a card-preferring market like Singapore, 42% preferred new methods of payment such as Paynow, swinging all the way to 78% in Indonesia with popular fintech apps such as OVO, Go-Pay or Dana.

TL;DR: There’s a high level of comfort with mobile ecommerce in the region, and this will likely continue to increase, given the convenience it offers consumers. Brands should assess how accessible they are in this space – is their .com optimized for mobile? Are there super apps worth partnering with? 

We may be dependent on the Internet, but we remain vigilant.  

In Southeast Asia, misinformation is a visible and growing concern. Over 60% of Singaporeans and Malaysians say they’re concerned about what is real versus fake when it comes to news on the Internet. The region remains a hotspot for cyber-attacks and crime. Singapore, for example, reported a record number of scams in 2020, with e-commerce scams being the most common. It explains why 4 in 10 Singaporeans are worried about how companies use their personal data online. More than half of Indonesians are also using some form of ad-blocking tool.

TL;DR: Integrity and transparency have become more paramount than ever before – for brands, at the minimum this means providing consumers with data privacy options and being forthcoming about any breaches to try to maintain trust.