The economies of Southeast Asian countries performed quite well in 2020 despite the COVID-19 outbreak and related challenges. The Asian Development Bank (ADB) has projected a contraction of 3.8% for the region during 2020, which doesn’t seem too bad when compared to the Eurozone’s at 7.9% and Britain at 10.1% (expected contraction of economies).
Southeast Asia’s digital economy grew significantly last year, reaching $100 billion due to a rapidly expanding e-commerce industry. The e-Conomy SEA Report reveals that 2020 saw 40 million new online customers in the region, which brings the total Internet users in the area to approximately 400 million. Southeast Asia’s digital economy is expected to be valued at $300 billion within the next 5 years.
A report from payments company PPRO recently examined emerging digital commerce trends and looked at consumers’ preferred payment methods for online shopping in major markets, such as Malaysia, Indonesia, Singapore, the Philippines, and Vietnam.
In Indonesia, the Coronavirus pandemic has accelerated the growth and shift towards online shopping, especially in the areas of healthcare services and grocery shopping. Online sales of products like disinfectants and vitamins grew by 1,000%, meanwhile, online grocery shopping was expected to grow 400% during the past year.
In Malaysia, digital commerce volumes grew nearly 150% during the first few months of the COVID outbreak, and online sales in certain categories, such as cooking utensils and latex gloves, increased by 800% during periods of nationwide lockdowns.
In the Philippines, digital commerce volume surged 376% during the first half of last year, and data shows that physical business locations are adapting to changing consumer behavior with the number of registered online merchants growing by a factor of around 40.
Like many other Southeast Asian nations, Singapore also experienced a surge in e-commerce with most online platforms reporting a rise in total transaction volumes. Research conducted by Nielsen reveals that nearly 40% of Singapore residents began shopping online more frequently during the COVID-19 pandemic. Approximately 75% of Singapore consumers are not expecting to return to their pre-COVID shopping habits.
Notably, Vietnam was the only Southeast Asian country studied that managed to record positive economic growth during 2020 at about 1.8%. The nation’s digital commerce sector grew significantly, with online grocery shopping, cosmetics and healthcare recording substantial growth in 2020.