Consumers across Southeast Asia are going online in droves, particularly with the rapid up-take of connected devices, and they are increasingly searching out online channels to research and purchase the products and services they need and want. The growth of connected device ownership across Southeast Asia is laying the foundation for a booming online retail sector, with the number of consumers in the region making online purchases increasing significantly in the past two years. Online shopping is set to continue its upward trajectory in the years ahead as consumers’ familiarity with, and trust in, online retail sites grows.
Digital consumers across Southeast Asia enjoy going online to shop, although Filipinos, Vietnamese and Singaporeans are most inclined to purchase items online, while in Indonesia, Malaysia and Thailand consumers are more likely to go online to browse. Reading online reviews, product research and convenience rank among the main factors motivating consumers in Southeast Asia to go online to shop. Notably, a large proportion of Southeast Asian consumers also view the internet as a means of checking out products to inform their offline purchases. This trend, which signals a need for retailers to ensure they do not neglect digital as part of their overall engagement strategy, was most prominent in Indonesia, the Philippines and Singapore where a large number of consumers often look at products online before purchasing them in a store.
Travel services such as airline tickets and tour and hotel reservations are the most commonly purchased items online in Southeast Asia, along with tickets for events such as movies, live performances, exhibitions and sports games. Singaporeans have the highest online purchasing intention globally for airline tickets and hotel and tour reservations, and second highest globally for event tickets; around seven in 10 Singaporeans plan to go online to purchase flights (70%) and make hotel and tour reservations (69%) within the next six months. Malaysians’ online purchase intent is also high, with Malaysia ranking second globally for tours and hotel reservations and third globally for intention to purchase airline tickets and event tickets online. Around half of consumers in Indonesia, the Philippines and Vietnam intend to make travel and event purchases online, along with approximately four in 10 consumers in Thailand.
As e-commerce retailers’ product and service offerings have evolved to meet the demands of online shoppers, the categories which rank most favourably for online shopping have shifted substantially in the past two years; in 2012 categories such as computer and gaming software, mobile phones and clothing and accessories ranked among the most frequently purchased items online. While these categories continue to enjoy high engagement with Southeast Asian consumers when it comes to browsing, the conversion from looking to buying has dropped behind other categories in the past two years.
As Southeast Asian consumers become more familiar with online retailing environments, they are looking to broaden the number of tools and apps they use, both as a means of making their shopping experience easier and more convenient, and also to seek out the best deals. Emerging e-commerce capabilities such as grocery list apps and tools and discount alert apps are beginning to gain traction across the region, particularly in Thailand and Vietnam. More than half of Vietnamese netizens (56%) said they use price-saving apps in-store and when planning their shopping trips, and 44 percent manage their grocery list with grocery retailers’ mobile apps and online tools. In Thailand 55 percent use price-saving apps when planning their shopping trips, 44 percent use price-saving apps in-store and 40 percent use grocery retailers’ mobile apps and online tools to manage their grocery list.
Credit card security remains a key concern for consumers across the region with five of the six Southeast Asia markets ranking above the global average with respect to their concern around providing credit card information online. Filipinos are the most cautious when it comes to paying online by credit card (67% do not trust giving their credit card information online), followed by Thais (62%), Indonesians (60%), Vietnamese (55%), Malaysians (52%) and Singaporeans (41%), compared to 49 percent of consumers globally. In order to gain the trust of consumers online retailers must look for opportunities to provide reassurances around online payment security.
When it comes to devices most frequently used to shop online, although PCs dominate in the majority of Southeast Asia markets, use of mobile phones for online shopping is growing in popularity across the region. Increasing connected device ownership in Southeast Asia is by far one of the most significant factors driving the growth of online shopping, and rising affluence, availability of high-speed connectivity and evolving online offerings will compound this effect in the years ahead. The Philippines, Indonesia, Vietnam and Thailand rank in the top 10 markets globally for use of a mobile phone to shop online and all Southeast Asia markets scored above the global average. Tablet usage is also gaining traction as a means of accessing online retail sites, with all Southeast Asia markets except Singapore ranking above the global average for use of a tablet to shop online.
Insights contained in this article are taken from The Nielsen Global Survey of E-Commerce which was conducted between 17 February and 7 March 2014 and polled more than 30,000 online consumers in 60 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America.