A new report on e-commerce in Southeast Asia (SEA) has released a number of key findings on the region, including those on mobile traffic, conversion rate, basket size, and payment methods.
2017 has been a vital year for e-commerce in Southeast Asia, with gross merchandise value of firsthand goods surpassing US$10 billion in 2017, up from $5.5 billion in 2015, with a stunning 41% compound annual growth rate over the past couple of years, according to a new white paper from iPrice, an online shopping aggregator based in Kuala Lumpur, Malaysia.
“Among other major events, 2017 in SEA eCommerce has seen Amazon’s long awaited entrance in one of SEA’s market, the fast rise of Shopee’s Mobile-First platform, the $250M record-breaking Sales by Lazada’s Online Revolution Campaign and the increasing capital deployed by Chinese’s bitter enemies Alibaba and Tencent, in an attempt to ‘win’ the market,” said the paper entitled “The State of eCommerce in Southeast Asia 2017.”
The report leveraged iPrice’s proprietary data to shed light on some of the most important e-commerce metrics in the six largest Southeast Asian markets, namely, Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam.
On mobile traffic, the study said its rise in SEA’s e-commerce “appears unstoppable.” In the past 12 months, mobile has grown on average 19%, now accounting for 72% of the overall e-commerce web traffic, said the report.
“SEA eCommerce is a mobile-first economy, leapfrogging all the Western economies when it comes to the importance of Mobile commerce in the traffic generated by each eCommerce operator.”
The increase was steepest in Vietnam (+26%), and slowest in the Philippines (+15%). Meanwhile, leading the pack is Indonesia, which now has a staggering 87% share of mobile traffic.
On the other hand, Vietnam merchants are leading the way in average conversion rate in SEA, with a conversion rate 30% higher than the average. Conversion rate is defined as the percentage of website visits that turn into a product purchase.
Singapore displays the second highest conversion rate, closely tied with Indonesia.
On orders per time of the day, the number of orders is highest between 9 a.m. and 5 p.m., when people are traditionally at work or school, except for Singaporeans, who seem to enjoy evening shopping, peaking at 10 p.m.
Consistently across countries, there is a dip between 5 p.m. and 7 p.m., where people typically commute and have dinner, before getting back into online shopping until 11 p.m.
E-commerce merchants suffer a dip of up to 30% of their conversion rate over the weekend, consistently across the region.
“The main factor contributing to the dip in conversion rate on the weekend is, not surprisingly, the large increase in the percentage of mobile usage,” said the report.
Another consistent trend is the peak conversion rate on Wednesday, up on average between 4% and 15% from the average weekly conversion rate.
Another key metric, basket size measures the average total amount spent for every order made by a customer over a defined period of time.
Basket size results appear to be tied very closely to each country’s GDP per capita, said iPrice. It is lowest in Vietnam ($23) and highest in Singapore ($91).
As for payment methods, due to low credit card penetration in the region (except Singapore), e-commerce players have had to come up with a much more diverse range of payment solutions.
Cash on delivery is being offered by more than 80% of merchants in Vietnam and Philippines, and less than 20% in Singapore and Malaysia.
Bank transfer is another very popular payment method across SEA, with 94%, 86%, and 79% of merchants in Indonesia, Vietnam, and Thailand, respectively, offering it.
In Thailand and Vietnam, almost 50% of merchants offer offline point of sales.
Payment by installment proves to be very popular in both Vietnam (47% of merchants) and Indonesia (42%).
Photo: Jack Moreh