With COVID-19 impacting consumers’ behaviors and accelerating digitalization, Southeast Asian e-commerce has been showing exciting developments ahead of the important year-end sales period.
E-commerce aggregating startup iPrice Group in collaboration with analytics platforms SimilarWeb and App Annie publishes the Southeast Asian Map of E-commerce Report, detailing major changes in consumers’ online shopping behaviors brought about by COVID-19.
The report zooms into 6 countries: Vietnam, Indonesia, Thailand, Malaysia, Singapore, and the Philippines. And here are some of the key highlights.
A Clear Shift in Consumers’ Demands
The report shows that in the first half of 2020, there was a clear surge in visits to websites of online general department stores. These increases can be seen in Indonesia, Thailand, Malaysia, and Singapore at up to 18% higher than same time last year.
In contrast, the fashion category, which previously were a huge part of Southeast Asian e-commerce industry, took a hit. Average traffic to fashion e-commerce websites decreased in all 6 countries in H1 / 2020.
Thailand’s fashion websites performed the worst on average with visits dropped by 62% in H1 / 2020 compared to H2 / 2019, followed by Vietnam’s at -38% and the Philippines at -30%. July witnessed the closing down of Sorabel, a much-celebrated Indonesian fashion startup.
Similarly, heavy downturns can be seen in Malaysia for electronics website (-35% in traffic in H1 / 2020 compared to H2 / 2019) and in Indonesia for beauty websites (-26% in traffic).
These results prove that COVID-19 is rapidly changing Southeast Asian consumers’ online shopping demands. Demands for non-essential items such as fashion, cosmetics, and smartphones slowed down significantly, while demands for groceries and health supplements shot up.
Facing this trend, Since Q2, e-commerce players across the region have identified grocery and health supplements as important product categories going forward.
According to iPrice Group’s records, almost all major e-commerce marketplaces have had multiple sales campaigns to promote health supplements and grocery. Moreover, some are investing in logistics to assure these essentials get to the consumers. In April, Lazada expanded their fresh produce category to Malaysia, Vietnam, and Indonesia. In May, Vietnamese company Tiki introduced TikiNGON - a service to deliver groceries.
These product categories therefore promise to play a big role in the upcoming year-end sales.
Mobile Applications - The Main Battle
Unexpected circumstances brought about by COVID-19 became a turning point for Southeast Asian e-commerce. With more people staying at home, there is an increase of demand for online entertainment, which presents a perfect opportunity for shopping applications.
As a result, in Quarter 2, according to iPrice Group and App Annie, the total number of sessions on shopping applications on Android phones in Southeast Asia reached 65.1 billion, an increase of 39% compared to Quarter 1.
Leading this jump in usage is the Philippines, Thailand, and Vietnam with increases of 53%, 50%, and 43% respectively. Meanwhile, Indonesia leads the region in absolute number with 28.5 billion sessions in Quarter 2 alone.
The advancing of e-commerce onto mobile has been on-going in Southeast Asia for some time. By 2019, major e-commerce companies across the region has launched new features and promotions focusing on mobile shopping, especially those that encourage interaction such as games and livestreaming.
With the boost from COVID-19, these features will be a center of e-commerce companies’ strategy for the year-end period.
Overall Online Spending Continues to Rise
Despite speculations that consumer spending would go down due to COVID-19, online spending for consumer products continued to rise in Southeast Asia.
Data from iPrice’s e-commerce portals show that average basket size across the region increased by 23% year-over-year in the first half of 2020, reaching 28.5 USD per order. The Philippines and Singapore show the biggest improvements at 57% and 51% respectively.
This jump in online shopping spending despite COVID-19 negatively affecting many economic sectors shows that there is a strong shift from offline to online in consumer spending, giving a positive outlook for the upcoming sales campaigns.
About iPrice Group
iPrice Group is a meta-search website operating in seven countries across Southeast Asia namely in; Malaysia Singapore, Indonesia, Thailand, Philippines, Vietnam, and Hong Kong. Currently, iPrice compares and catalogues more than 500 million products and receives close to 20 million monthly visits across the region. iPrice currently operates three business lines: price comparison for electronics and health & beauty; product discovery for fashion and home & living; and coupons across all verticals.