SEA digital consumers to reach 350 million by end-2021

The report also said that digital retail share in the region grew 85% year-on-year.

The number of digital consumers in Southeast Asia will reach 350 million by the end of 2021, meaning almost 80% of consumers in the region will go into digital by year-end, according to a report by Facebook and Bain & Company.

There were about 320 million digital consumers aged 15 and above in the region by the end of 2020.

The annual SYNC Southeast Asia report said digital spending per person is up 60% compared to last year, with overall e-commerce sales set to double by 2026.

The report also showed that Southeast Asia’s digital retail share grew 85% year-on-year (YoY), bringing the contribution of online retail to the total retail in the region to 9% this year from 5% last year.

This outpaces the 10% growth in India and the 5% growth in China.

The study also found that 45% are using online as a primary purchase channel, with 51% saying they had tried new online stores this year and 65% are open to discovering new products as they do not know what to buy when they go online.

Consumers in the region are also buying a wider variety of categories online, with respondents saying they buy online for an average of 8.1 categories, higher than the 5.1 average last year.

“It’s clear that the pandemic continues to push people online at an aggressive pace. People in Southeast Asia are forming new habits related to online discovery, consideration and purchase. For both new and established brands, these shifts signal the need to rethink traditional e-commerce experiences and find creative ways to inspire and connect with customers online,” said Benjamin Joe, VP, Southeast Asia at Facebook.

Southeast Asian consumers are also adapting more to a home-centric lifestyle, with the report predicting 86% of in-home food delivery is expected to remain post-pandemic, and 72% of respondents said the time they spent “in-home” would remain the same and 75% of the time spent shopping online at home is expected to continue. At least 37% said they expect to work from home even after the situation improved and almost 90% of executives said that a hybrid work-from-home model will become the norm post-pandemic.

The report also said that 80% of venture capital funds are going into the internet and technology sectors especially in fintech, edtech, and healthtech.

“Southeast Asia will undoubtedly leapfrog China to become the fastest-growing digital economy in the Asia Pacific. E-commerce gross merchandise value grew almost +80% YoY and we are expecting it to double in the next five years,” said Praneeth Yendamuri, partner in Bain & Company’s Consumer Products Practice.

“The moment has arrived for brands to take advantage of Southeast Asia’s paradigm shift in consumer behaviours. The most successful brand owners will focus on strategies to both capitalise on a post-pandemic digital boom in the region and insulate themselves from ensuing digital disruptions,” Yendamuri added.

The survey involved around 16,700 digital consumers and insights from interviews with over 20 chief experience officers in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.