According to a recent report by venture capital firm Momentum Works, Southeast Asia's e-commerce GMV is grow 1.8 times to US$99.5 billion by 2022. This remarkable achievement came despite challenges ranging from the impact of the post-COVID-19 reopening, inflationary turbulence, and rising interest rates.
The report also states that under the normal scenario, total Gross Merchandise Value (GMV) in Southeast Asia is expected to reach US$175 billion by 2028. However, there is potential to reach US$232 billion under the best case scenario.
In a statement, Jianggan Li, founder and CEO of Momentum Works, revealed that e-commerce in Southeast Asia is expected to follow a steady and positive trend in the coming years.
Amidst the ever-increasing growth in 2022, the e-commerce sector in Southeast Asia has become a battleground for industry players. However, in this battle, Sea Group's Shopee has managed to maintain its position as the undisputed leader in the region. With a GMV of US$47.9 billion, Shopee has managed to outperform tough competitors such as Lazada, Tokopedia and TikTok Shop.
Southeast Asia's E-Commerce War: Who Will Dominate the Market?
Shopee, a Singapore-based e-commerce giant, not only achieved an impressive level of profitability in the fourth quarter of 2022, but also managed to maintain the positive momentum in early 2023. Indonesia accounted for about 52% of the region's total GMV. In addition, Singapore and Malaysia also took the top spot in terms of GMV per capita, indicating strong consumer interest and inclination to take advantage of the convenience and benefits of e-commerce platforms.
Amidst the intense competition in the e-commerce market, Lazada managed to maintain its position as the number two player in almost all countries except Indonesia. Tokopedia, a local company, is right behind Shopee. Lazada has a market share of 35% while Tokopedia is ahead 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 cash injection from Alibaba in April 2023. The cash injection is a result of Alibaba's plan to split its operations into six business units. The move is seen by analysts as a gateway to new growth for Lazada, including the possibility of raising external funds through an initial public offering (IPO).
As such, Lazada is poised to take on market challenges and move forward with a stronger strategy to succeed amidst intensifying competition.
On the other hand, a notable new player is TikTok Shop, which has managed to enter the top five in all countries where it operates in the region, including Indonesia, Vietnam, Malaysia, Thailand, Singapore, and the Philippines.
The social commerce platform has an ambitious goal of reaching $20 billion in revenue this year. By 2022, TikTok Shop is on track to reach an impressive US$4.4 billion in GMV in Southeast Asia, representing a remarkable 363% year-on-year growth.
TikTok Shop is not only an exciting new competitor, but also brings a new dynamic to the e-commerce industry with its unique and differentiated approach. With a combination of engaging content and innovative features, they have been able to attract consumers and achieve great success in a short period of time.
Source: Tech in Asia
