In 2023, e-commerce continued to expand in Southeast Asia, with the gross merchandise value (GMV) of the region’s top eight e-commerce platforms increasing by 15% year-over-year (YoY) to reach US$114.6 billion, according to Momentum Works’ “Ecommerce in Southeast Asia 2024” report. The figure represents a 2.1-fold increase from 2020, and showcases the rapid growth of e-commerce in the region.
The growth of e-commerce in Southeast Asia last year varied across countries and platforms. Within the region, Vietnam and Thailand experienced the most significant growth, with GMV rising by 52.9% and 34.1% YoY, respectively.
The surge turned Vietnam into the third largest e-commerce in Southeast Asia, with a GMV of US$13.8 billion, overtaking the Philippines, which saw a much more modest growth rate of 19.4% to US$13.7 billion.
Thailand maintained its position as the second-largest e-commerce market in Southeast Asia, with GMV growing from US$14.4 billion in 2022 to US$19.3 billion in 2023. Indonesia remained the undisputed regional leader with a GMV of US$53.8 billion, despite a meek 3.7% YoY rise.
Indonesia accounted for 46.9% of the total GMV of the region in 2023, down from 54% in 2022. This indicates that growth is slowing in Indonesia compared to other markets in Southeast Asia which registered double-digit growth last year.
Leading e-commerce platforms in Southeast Asia
Shopee, a subsidiary of Singapore’s tech conglomerate Sea, continued to dominate Southeast Asia’s e-commerce market in 2023 with a 48% market share. The platform’s GMV increased from US$47.9 billion in 2022 to US$55.1 billion last year.
More remarkably, TikTok Shop, the e-commerce feature of the video hosting service, recorded the strongest growth. In 2023, TikTok Shop’s GMV almost quadrupled, reaching a scale comparable to Alibaba Group’s Lazada and Indonesia’s e-commerce giant Indonesia.
TikTok Shop is an e-commerce feature integrated within the TikTok app, allowing users to browse and purchase products directly through the platform.
The feature was first launched in the Indonesian market in February 2021, before expanding to Malaysia, Thailand, Vietnam and the Philippines in April 2022, and entering Singapore two months later. TikTok Shop launched in the US in September 2023 and has been expanding across Europe this year. The company claims 15 million sellers using the feature.
Live commerce on the rise
The Momentum Works report also highlights emerging trends in the Southeast Asian e-commerce market, emphasizing the rise of live commerce. Live commerce, also known as live streaming commerce or live shopping, is a combination of online shopping and live video streaming. This approach allows retailers and brands to showcase products in real-time through live broadcasts, enabling viewers to purchase items directly from the live stream.
In Vietnam, brands such as Guno have leveraged TikTok’s livestreaming feature to achieve exponential growth. During one livestream, the fashion brand attracted over 3,000 viewers and sold goods worth VND 2 billion (US$79,300 million), founder Nguyen Phuong told VNExpress in June. After a year of livestreaming on TikTok, the company’s monthly revenues increased twentyfold, she said.
According to Pham Ngoc Duy Liem, co-founder of streaming service provider GoStream, top streamers in Vietnam make between VND 200-300 million (US$8,000 – US$12,000) for a session plus commissions.
In Thailand, live commerce accounted for 10% of alternative e-commerce in 2022, the biggest share across Southeast Asia, according to a 2022 report by Meta and Bain and Company. The rate surpasses the 8% average growth in the broader region.
Suchaya Paleewong, director of marketing at Shopee in Thailand, told the Bangkok Post in March 2024 that the live feature of Shopee allows sellers to triple their number of viewers, accelerating sales growth by 10 times in 2023 compared to the previous year.
In 2022, Shopee was the biggest live commerce platform with a 27% market share, according to a survey conducted by Ninja Van Group. Shopee is followed by Facebook (25.5%), TikTok (22.5%), Lazada (15%), Instagram (7%) and YouTube (3%).
Southeast Asian e-commerce leaders embrace AI
Another e-commerce trend outlined in the Momentum Works report is the increasing use of artificial intelligence (AI). Across the region, leading platforms including Shopee, Lazada and Zalora are employing AI to provide tailored suggestions and improve customer experience.
For example, Lazada introduced in 2019 an AI-enabled image-based search to allow shoppers to find desired items by snapping or uploading an image, streamlining the product discovery process. Other AI applications followed suit, including the ChatGPT-powered LazzieChat, an AI chatbot that responds to users’ questions and acts as a personal shopper by providing tailored suggestions and product recommendations, as well as the Skin Test function, which enables beauty enthusiasts to run skin diagnoses and analyses using their phone cameras and receive relevant product recommendations based on the results.
Meanwhile, Singapore’s Shopee provides small businesses selling on its platform with access to an array of AI-powered tools that help cross-border sellers overcome language barriers in new markets and make it easier for them to build their online presence.
This includes collating data on shoppers’ purchasing patterns and using this to push relevant products towards them. AI-powered chatbots also help “facilitate millions of conversations daily on Shopee and are particularly helpful during high-traffic events like midnight sales,” a spokesperson for the company told Channel News Asia in May 2024.
In Indonesia, Tokopedia uses AI to understand users’ behavior and improve their experience of using the platform. It has a 100% digital-based customer service centre called Tokopedia Care, where buyers and sellers can get solutions to their questions without the help of a human customer service team.
Featured image credit: edited from freepik
