Social Commerce Is Expected To Contribute To Southeast Asia’s E-Commerce Market By The End Of 2022

Southeast Asia’s e-commerce market is rapidly growing, driven by the region’s rising internet and mobile penetration, increased consumer spending power, and favorable government policies. According to a statement by Google and Temasek, the region’s e-commerce market is expected to grow from US$23 billion in 2019 to US$102 billion in 2025, with social commerce contributing a major share of this growth.

Social commerce is defined as the use of social media networks to facilitate online transactions. This includes buying and selling products, services, and experiences through these networks. In Southeast Asia, the most popular social commerce platforms are Facebook, Instagram, Lazada, and Shopee.

A number of aspects are driving the growth of social commerce in Southeast Asia. Firstly, the region has a young, digitally savvy population that is comfortable with using mobile phones and social media networks to purchase goods and services. Coupled with rising disposable incomes and better internet access, this has created a favorable environment for social commerce to take off.

Secondly, the region’s e-commerce market is relatively underdeveloped, providing an opportunity for social commerce to fill the gaps. For instance, while traditional e-commerce platforms such as Lazada and Shopee offer a wide range of products and services, social commerce is better suited for selling niche products that may not be available on these platforms.

Thirdly, social commerce platforms are able to leverage the popularity of influencers in the region to advertise their products and services, which has been a major driver of growth. Influencers can reach a wider customer base and increase customer engagement with the platform.

Finally, the region’s governments are also playing a role in encouraging social commerce growth. For instance, Indonesia has recently launched a program called “Social Commerce Indonesia,” which is designed to facilitate the growth of social commerce in the country by providing training, funding, and other support.

Given these factors, it is no surprise that social commerce is expected to contribute US$42 billion to the region’s e-commerce market by the end of 2022. According to a report by McKinsey, this figure is expected to increase to US$63 billion by 2025.

The growth of social commerce in Southeast Asia is a positive development that is expected to drive further growth in the region’s e-commerce market. It will open up opportunities for small businesses and entrepreneurs to reach a wider customer base and increase sales. Additionally, it will also provide consumers with more options to purchase products and services online.

However, it is necessary to note that the growth of social commerce in the region is not without its challenges. For instance, there is a need for better regulation and enforcement of consumer protection laws, as well as the need to ensure that social commerce platforms are not used to facilitate illegal activities. Additionally, there is a need to ensure that social commerce platforms are not used to spread fake news or misinformation.

Social commerce is expected to play an important role in driving the growth of Southeast Asia’s e-commerce market in the coming years. The region’s young, digitally savvy population, coupled with favorable government policies and the popularity of influencers, will continue to be key drivers of growth. However, it is important to secure that the necessary regulations are in place to protect consumers and prevent the misuse of social commerce platforms.

Livya Arora
Livya is a content writer at Todays Ecommerce and focuses on writing about upcoming ecommerce projects.