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Vietnam, Indonesia to lead Southeast Asian eCommerce

Vietnam and Indonesia are tipped to become the largest Southeast Asian eCommerce markets within the next five years.

Stunning growth in both markets is predicted in a report by global research company Frost & Sullivan which expects the broader region’s eCommerce market to double within five years.

By 2020, the total revenue from B2C eCommerce in the six largest Southeast Asian countries, including Viet Nam is expected to grow at nearly 18 per cent, from US$11.2 billion in 2015 to $25.2 billion.

Growth will be driven by an astounding rate of digital adoption, young and tech-savvy consumers, and increasing disposable incomes.

There are 127 million SIMs in circulation in Vietnam and nearly 40 million active internet users.

“eCommerce players are beginning to compete beyond price points and logistics and moving into new areas such as Online-to-Offline (O2O) e-commerce and loyalty programmes,” says Cris Duy Tran, lead consultant in eCommerce and digital transformation at Frost & Sullivan Asia-Pacific.

But he says eCommerce companies face significant challenges across the markets with many existing players struggling to achieve profitability. He singled out the failure of Foodpanda in VIetnam and Groupon in Thailand and the Philippines. Low levels of credit card ownership and distribution challenges also made it difficult to run online businesses profitably.

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