According to a report by ‘2016 We Are Social’, over half of the Southeast Asia population is on the internet. This number is important because it indicates that a portion of the population has the chance to involve themselves in the digital economy and participate in purchasing and selling things online; using mobile wallets and others. The widespread use of the internet and the progress of financial technologies have far-reaching effects. One of which is the manner by which shopping is presently seen by consumers in general.
In another report by Google in association with Singapore’s Temasek, they found that Southeast Asians spend the most time online compared to other continents. Furthermore, most of the time spent is on social media. Reported by ‘We Are Socials’, Southeast Asia’s social media infiltration in the region is 47%, which is higher than the worldwide average.
Given how enormous social media is, the popularity of “social commerce” in the region isn’t amazing. The term social commerce is actually selling and buying items in social media such as Instagram and Facebook. In 2016, a report by Bain & Co’s showed that the total of people in the region who shop through social media is 150 million, representing 30 million online transactions in Southeast Asia that year. The quantity of consumers taking an interest in social business shows that this phenomenon is one of a kind in the region. Statistical surveying firm, Global Web Index information shows that only 7 percent of the 287 million United States internet users involved in shopping via social media.
Social commerce has given a big impact to the growth of small business in Southeast Asia. To be involved in the social commerce is an easy step to be done and require only a little capital: you just need to create an account and get ready with the items to sell. Social commerce in Southeast Asia has thrived and has created a few names of bigger sites, for example, Lazada, 11Street and many more. PwC information from 2016 shows that social commerce alone recorded 51% for online shopping in the region.
Besides that, the internet is additionally making ready for more cashless transactions in the region. The expansion of fintech startup in the region has seen the mushrooming of e-wallet and e-payment frameworks, for example, Singapore’s PayNow and Thailand’s PromptPay among others. E-hailing organizations have additionally presented their own particular advanced payment stages, with Grab presenting Grab Pay and Go-Jek with Go-Jek Pay. The Nikkei Asian Review announced in January that Alibaba and Tencent are likewise attempting to infiltrate the e-wallet introduced in Southeast Asia. Towards the end of last year, Tencent’s WeChat Pay acquired the trust from a Malaysian electronic installment permit that enables users to synchronize the WeChat application with their debit bank accounts. Tencent’s combination of social media and e-payment could be a masterstroke in the region thinking of how prominent social media and online shopping are.
Google and Temasek’s report likewise uncovered that Southeast Asia’s digital economy is just going to become greater and greater. It is normal that the digital economy will develop more than six-overlay, to an amazing US$200 billion economy by 2025.
As the digital economy develops, the traditional retail scene will change. Sooner rather than later, shopping centers could turn out to be less famous as an ever-increasing number of young people decide on online shopping. We could likewise observe the hybrid of the online and retail shopping rise in the region, for example, Amazon Go developed in the United States. Amazon Go in Seattle is partially mechanized and customers can buy items without experiencing an interaction with cashier but they will use their Amazon account instead.
Although the internet is used to shop online nowadays, but it still can affect shopping mall or the traditional retail because as everyone is aware, the region thrives on its vibrant street markets – and as far as we can tell, they won’t be integrating e-wallet systems anytime soon