80% consumers in SEA set to go online by year-end

About 80% of consumers in Southeast Asia are expected to go digital by the end of the year as migration to the online economy in the region accelerated, surpassing initial estimates, according to a report by Facebook and Bain & Company.

The region added about 70 million digital consumers since the Covid-19 pandemic began, the report revealed. Average spending is expected to grow by 60% to US$381 per digital consumer by the end of the year, up from US$238 per person at the end of 2020. This figure is projected to grow by more than 150% by 2026 to hit US$671.

The report surveyed over 16,700 consumers across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, as well as executives from Lazada, Sea Group, Golden Gate Ventures, and VNLife, among others.

Southeast Asia also outpaced China, Brazil, and India in the adoption of online retail. The contribution of online retail to total retail grew 85% from the previous year. Digital consumers in every Southeast Asian economy are projected to outweigh offline consumers by an even larger margin than in 2020.

“Southeast Asia will undoubtedly leapfrog China to become the fastest-growing digital economy in the Asia Pacific,” said Praneeth Yendamuri, partner at Bain & Company’s consumer products practice. “The moment has arrived for brands to take advantage of Southeast Asia’s paradigm shift in consumer behavior.”

Indonesia clocked the region’s highest growth rate in terms of its digital consumer population, which is expected to grow to 165 million in 2021 from 144 million in 2020. That works out to an additional 21 million online consumers aged 15 years and older – a growth of around 15%.

Growth projections for digital consumers in Southeast Asia / Image credit: Facebook and Bain & Co.

The report also noted that growth in the online groceries segment has been the “most dramatic,” with a majority of the consumers planning on ramping up or maintaining their at-home online spending.

Looking forward, the research found that over 80% of venture capital funds have flowed into the internet and technology sectors – particularly fintech, edtech, and healthtech. However, the analysts suggest disruption may be more evident in healthcare and education as they rapidly evolve to adapt to consumers’ home-consumption habits in the form of home-based learning and telemedicine. Tech In Asia