In life, some personal milestones are memorable; others we pass barely noticing, unaware of their greater significance. \u00a0Let\u2019s imagine that last June, just outside Palembang in South Sumatra, a teacher made her first ever online purchase of groceries.\u00a0 Nothing remarkable in itself \u2013 and probably it\u2019s not a date that will be commemorated in her diary.\u00a0 But when we consider she is roughly the 21 millionth person in Indonesia to have made their first online purchase since the start of the pandemic, with 72% of these new digital consumers living in non-metro areas, we begin to see what a massive shift is taking place in that economy and society \u2013 a change which is being reflected right across the myriad peninsulas and islands of South East Asia.<\/p>\n\n\n\n
The e-Conomy 2021 Report (the sixth such, jointly published by Google, Temasek and Bain & Company) also provides clear evidence that it\u2019s not the high number of brand-new digital consumers out there which is changing the landscape \u2013 it\u2019s the fact that South East Asia\u2019s netizens are increasing the number of digital services they use at a quicker rate than before: in 2020 they used two additional services on average, but this rate almost doubled to 3.7 new services per user in 2021.\u00a0 Furthermore, 90% who used a new digital service in 2020 continued to use it in 2021.\u00a0 In other words, we\u2019re talking about growth here, not replacement.\u00a0 As the e-Conomy 2021 puts it, these consumers are \u201ccruising into a new way of life\u201d.\u00a0 By 2030, a staggering 50 percent of all retail spending in the SEA region will be online, up from around 10 percent in 2020, it predicts.<\/p>\n\n\n\n
Having seen the rise to power of China\u2019s so-called \u201csuper-apps\u201d (WeChat, Meituan, etc), and also because the Chinese economy has such a pervading influence in the region, it\u2019s no surprise that the race is now on to become the all-in-one on-demand lifestyle services app for the 274 million people who live in Indonesia, say, or the 110 million in the Philippines.\u00a0 Investment is piling in and, along with it, dynamic growth in fintech, logistics, delivery services, app design, customer services and more.<\/p>\n\n\n\n
In terms of mall-style platforms, Lazada.com is now the largest ecommerce operator in South East Asia, both in terms of average monthly web visits and number of active buyers. Coming up for its tenth birthday next month, this Singapore-headquartered platform began by selling to customers from its own warehouses, but added a marketplace model in 2013 allowing third-party retailers to sell B2C direct, and this quickly became the major part of Lazada\u2019s sales. Alibaba bought controlling stake in the business in 2016, and other investors including Tesco, Temasek, Rocket Internet and JP Morgan Chase.<\/p>\n\n\n\n
Though naturally ecommerce covers a wide range of goods and services, it\u2019s online grocery sales that have seen the most explosive growth in the last couple of years, driven by lifestyle changes accelerated by the Covid-19 pandemic.\u00a0 The potential for further growth in this area is huge: grocery accounts for 50% of all retail spend in South East Asia, but only 2% of online purchases (compare this with markets like China and the US, where the figure is closer to 10%, all according to e-Conomy 2021).<\/p>\n\n\n\n
Though this region\u2019s online landscape is developing and changing at breath-taking speed, one thing is for certain \u2013 there\u2019s no turning back.<\/p>\n\n\n\n