3 Reasons Why SEA's E-Commerce is Set to Explode
3 Reasons Why SEA's E-Commerce is Set to Explode

The latest report from Facebook & Bain Company has proven that the ‘new normal’ resulted in new purchasing habits which boosted digital consumption. The e-commerce sales in Southeast Asia are estimated to nearly double to US$254 billion at the end of 2026.  
While it is expected that digital spending will continue to expand amidst the pandemic, how much will SEA’s e-commerce companies grow as we’re entering the year-end sales period? 

An e-commerce aggregator, iPrice Group, analyzed the most visited e-commerce platforms in Southeast Asia to predict where the market is heading towards and what exciting developments we can expect from the year-end shopping frenzy.

Here are 3 key predictions on the success of Southeast Asia’s e-commerce industry for the rest of the year:

Online Growth will be Off the Charts

The pandemic-induced digital shift is enhancing online consumption even more than last year. Data shows that the overall web visits of online shopping platforms across Southeast Asian countries remained positive in the 1H 2021. 

With more than an average of 4 million web visits from January to June in 2021, the number has increased by 31 percent compared to the same period in 2020. 

The Philippines experienced the most surge by 73 percent, followed by Indonesia (41 percent), Malaysia (34 percent), Singapore (10 percent), Thailand (9 percent), and Vietnam (7 percent).  

The top two Singapore-based companies, Shopee & Lazada, experienced an increase of web visits by 56 percent and 10 percent in 1H 2021 compared to the same period last year. 

The surge was probably driven by its constant marketing initiatives to supply value-driven shoppers during the new norm with flash sales, Ramadhan sales, 6.6 sales, and others.  

In 2020, iPrice Group saw that the overall web visits grew at 26 percent from 1H to 2H 2020 across all 6 countries. As such, the company forecasts that the total average web visits will grow even more for the remainder of 2021.

Therefore, online marketplaces will potentially receive an additional average of 690 thousand visitors or more across the region, given that there are many upcoming year-end sales. 

Influencers Will Continue to Drive Success to Online Sales

From footballers to Korean artists as brand ambassadors, along with recent partnerships with Jackie Chan and Hyun Bin, Shopee & Lazada sparked consumer hype as we’re entering the year-end shopping sales. 

iPrice Group tracked the social sentiments of the latest 9.9 campaigns. Using this data, the study uncovers which campaign is the most successful. 

Jackie Chan’s endorsement has the highest engagement per article. The campaign collaboration with Chanfor 9.9 sales has over 59 articles published online while there were 53 articles written about Hyun Bin’s endorsement. 

However, the number of articles doesn’t draw a full conclusion. Hence, the study also investigates consumers’ reactions towards these partnerships. Who seems to be the more loved brand ambassador? 

Observing the 3.8k social reactions that were recorded, Hyun Bin has the highest number of ‘love’ reactions (79 percent), along with 19 percent ‘haha’ reactions, and 2 percent ‘wow’ reactions from its partnership with the giant e-commerce company, Lazada. 

Similar success was seen with the kung fu legend’s collaboration. Jackie Chan’s endorsement was received with 62 percent ‘love’ reactions, 21 percent ‘haha’ reactions, and 17 percent ‘wow’ reactions. It looks like the social sentiments towards these two ambassadors have been positively received by people, according to the data.

It’s clear to see that influencers play an important role in driving excitement for the upcoming sales period. Thus, key e-commerce companies have enough incentive to involve influencers in their campaigns. But does this mean that they will increase the amount of consumer spending during year-end sales?  

Steady Increase of Consumer Spending Year-Over-Year

Given the uncertain COVID infection rates, consumers will continue to stay at home and consequently forego holiday travels and family get-togethers. 

More time spent at home means more opportunities for online shopping. iPrice foresees that Southeast Asian consumers would probably spend an average of US$ 40 on e-commerce by the end of the year. 

The prediction is made by examining the average consumer spending across online marketplaces in the 1H 2020 and 1H 2019. iPrice found that there was an increase of 26 percent in average consumer spending in 2020 when consumers spent about US$ 32. 

Most purchases will be directed towards the categories of sports and outdoor, home improvements, and electronics. 

Lastly, even if consumer spending won’t increase as predicted, online retailers can still expect far more online web visits to their platforms this year.
 

 
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How E-tailers Can Work Towards Building a Better Circular Economy Involving Plastics
How E-tailers Can Work Towards Building a Better Circular Economy Involving Plastics
 

Despite the increased awareness of sustainability among people in general, much of the plastic is still falling out of the “recycling chain”. The e-commerce industry which is heavily dependent on plastic packaging in its supply chain has a huge potential to raise sustainability standards by many points. 

In fact, greater participation by private stakeholders and other members of the value chain is crucial to building a holistic, circular plastic ecosystem to reduce plastic leakage into nature, according to a case study developed in collaboration with WWF (World Wide Fund for Nature India) India and India’s top e-commerce firm Flipkart. 

Mahesh Pratap Singh, Head of Sustainability and Social Responsibility, Flipkart said, “As a homegrown e-commerce organisation, the Flipkart Group is committed to building a sustainable business while playing the role of a catalyst in the creation of a thriving sustainable ecosystem. We are excited to have achieved a milestone of eliminating 100 percent single-use plastic packaging in our supply chain in a short span of time and look to aggressively work towards pushing the goal for our sellers and brand partners. We’ve also committed to sourcing from environmentally sustainable sources by working with various partners and becoming a proactive force for a better good."

Flipkart shared that its approach towards Sustainable Packaging relies on four pillars: Engage, Innovation, Capacity Building and Compliance. 

Flipkart

Reportedly, Flipkart Group companies, including e-commerce marketplace Flipkart and leading fashion destination Myntra have eliminated 100 percent single-use plastic packaging in their own supply chain by working with several stakeholders across traceability, plastic reduction and brands and universities to name a few. It is also working towards adopting circularity in its plastics value chain in collaboration with sellers and brand partners.

E-commerce ecosystem can rely on this model and build their organization that aids in fulfilling the sustainability targets. 

Varun Aggarwal, Associate Director - Sustainable Business at WWF India said, “A coordinated approach between e-commerce companies and all the other stakeholders in the plastics value chain is crucial to attaining a circular economy for plastics , Flipkart has a large secondary packaging footprint, making plastic waste management a key lever in its commitment to sustainability. The best practices adopted by Flipkart can be replicated by players in the same space to contribute to the mitigation of plastic waste”.

The study further mentions that companies need to customize interventions to influence consumer behavior and collaborate for improving and innovating the existing collection and recovery infrastructure and grow it further. Market leaders need to set up goals for their supply chain who wish to similarly engage and bring about a better plastics waste response to ultimately contribute towards a circular plastics economy and greater good of the society.
 
Through this case study, WWF has highlighted the need for active participation by the private stakeholders to ensure a holistic, circular plastic ecosystem to reduce plastic leakage into nature. As a leading digital platform engaging in online commerce of goods and services, Flipkart has a large secondary packaging footprint, making plastic waste management a key lever in its commitment to sustainability.
 
Some of the next steps identified include data-based goal setting to ensure a data-driven approach to waste management and regularly track the impact of alternatives, creating an ecosystem view of the entire waste management journey for packaging. It also includes creating a state-by-state playbook for training and working with sellers partners across different states to optimally implement the transition to sustainable packaging solutions. The best practices adopted by Flipkart can be replicated by other players in the same space for greater uptake to contribute to the mitigation of plastic waste and move towards a more circular system in e-commerce packaging.  

READ MORE: More Than 50 pc Consumers Globally are More Likely to Purchase Products with Sustainability Claims

 

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