According to a recent report by enterprise capital firm Momentum Works, e-commerce GMV in Southeast Asia will increase 1.8 times to $99.5 billion by 2022. This remarkable achievement occurred despite challenges corresponding to the impact of reopening after Covid-19 and inflation turbulence and rising rates of interest.
The report also indicated that in a business-as-usual scenario, the overall gross merchandise value (GMV) in Southeast Asia is predicted to achieve $175 billion by 2028. However, within the best-case scenario, there’s potential to achieve $232 billion.
In a press release, Jianggan Li, founder and CEO of Momentum Works, revealed that e-commerce in Southeast Asia is predicted to indicate a gradual and positive trend in the approaching years.
With growth continuing to rise in 2022, the e-commerce sector in Southeast Asia has change into a battleground for industry players. However, on this battle, Sea Group’s Shopee managed to keep up its position because the undisputed leader within the region. With a GMV of $47.9 billion, Shopee managed to overtake tough competitors corresponding to Lazada, Tokopedia and TikTok Shop.
E-commerce war in Southeast Asia: who will dominate the market?
Singapore-based e-commerce giant Shopee not only achieved impressive levels of profitability within the fourth quarter of 2022, but additionally maintained positive momentum in early 2023. Indonesia accounted for about 52% of the region’s total GMV. Additionally, Singapore and Malaysia also ranked first by way of GMV per capita, indicating strong consumer interest and willingness to make the most of the convenience and advantages of e-commerce platforms.
Facing intense competition within the e-commerce market, Lazada has managed to keep up its position because the second player in just about all countries except Indonesia. Just behind Shopee is the local company Tokopedia. Lazada has a market share of 35% while Tokopedia leads with a market share of 36%.
However, Lazada has no intention of standing still. They could potentially improve their performance after receiving a $353 million money injection from Alibaba in April 2023. The money infusion is the results of Alibaba’s plan to separate its operations into six business units. Analysts see the move as a gateway to latest growth for Lazada, including the potential of raising external funds through an initial public offering (IPO).
Therefore, Lazada is able to take available on the market challenges and move forward with a stronger strategy to reach the face of accelerating competition.
On the opposite hand, a noteworthy latest player is TikTok Shop, which has managed to enter the highest five in all countries where it operates within the region, including: in Indonesia, Vietnam, Malaysia, Thailand, Singapore and the Philippines.
The social commerce platform has an ambitious goal of reaching $20 billion in revenue this yr. By 2022, TikTok Shop is on the right track to realize a formidable GMV of $4.4 billion in Southeast Asia, representing a remarkable 363% year-on-year growth.
Not only is TikTok Shop an exciting latest competitor, but additionally it is bringing latest dynamics to the e-commerce industry with its unique and differentiated approach. By combining engaging content and progressive features, they managed to draw consumers and achieve huge success in a short while.
Source: Tech in Asia
