5 years in 1: The new ASEAN e-commerce


Not only China: e-commerce is also gaining momentum in ASEAN, with a specific emphasis on everyday consumables.

In the last months we witnessed the gradual disappearance of specific industrial sectors, while others have experienced rocketing growth. E-commerce is clearly the best example of success, and specifically e-commerce in Asia.

McKinsey has found that 2020 has seen two examples of international successful companies: the ones that focus on Asia (+9%) and that massively invest on enhanced digital infrastructures and commerce platforms (+76%).

China has been, for years, the leading actor in this sector. In 2020 Chinese e-commerce grew to a record $2.090 billion, up 26% from the previous year. Total active customers are now 900 million over a total population of 1,4 billion people. However, it is important to shed a light on the two underlying changes that Chinese e-commerce has seen in the last months.

First, Chinese are still not allowed to leave the country out of necessity matters, and they cannot access the most important global commercial and fashion hubs. This has been the end of the so called ‘shopping tourism’, which has brought nationals to purchase online and from their homes. Now, 73% of retail purchases are online, versus 35% of 2019, the trend to endure up to 50% in 2025. Second, Gen Z (the ones born after 1995) are increasingly gaining prominence in purchases, especially the ones living in lower tier cities.

Gen Zs and Millennials account for roughly 300 million consumers, and their presence is literally reshaping the e-commerce landscape by emphasizing the importance of uniqueness and omnichannel experiences.

Although less skyrocketing, ASEAN has also witnessed a historical evolution in its e-commerce industry. Studies have found that the e-conomy in the region has grown five times more than in a business-as-usual year before 2020.

Users grew from 360 to 400 million, while active consumers have grown 33%. If keeping this rate, ASEAN e-commerce market will value $300 billion in 2025. 

The key for this growth has been massive investments in digital infrastructure and architecture and traditional business model innovation, which have all spurred the way for new industries to grow in the long term. In particular, ICTs development and education have also been crucial in successfully facing Covid-19 related challenges. Moreover, the growth of digital conglomerates, together with innovation in digital payments methods, have allowed millions of retailers to access international marketplaces. Similar to the Chinese case, most of the new consumers are young, live in rural or less important urban areas, and are highly sensitive for customization, peer-to-peer confrontation and quality omnichannel integration. Notably, 94% of Southeast Asians internet users will continue to purchase online after the pandemic has ended, a remarkable share even when compared with China (around 40%). 

Though similar to other global ecosystems, ASEAN e-commerce is fundamentally different, due to an intrinsic characteristic.

Indeed, before 2020 the great majority of retail purchases were made offline: like others, ASEAN economies are traditionally ‘communal’, meaning that physical daily contact is an inseparable part of social and economic structures. In this sense, the region has pioneered a new approach to digital commerce, centered on exchange of consumable goods and food. Online purchases of groceries and food deliveries has increased 35%, reaching $6 billion, one of the most consistent increases. However, here the key is that online Asian users are willing to purchase high-quality consumables as well as best-in-class groceries.

These numbers highlight a unique chance for Italy and for Made in Italy products, which have historically been able to represent quality, focus on style and on personality in everyday life, being it with fashion products or food. 

Asian e-commerce has been the key for companies’ prosperous growth in 2020 but will by all chances be also the key for growth for years to come: Italy, if takes it on time, can not only be an accelerator of this commercial shift, but also a global leader promoting a new cross-national e-conomy model.

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