In contrast to the hard-hit retail sector in malls and physical locations, online businesses in Southeast Asia have seen sales “greatly improve” in 1H2021.
Some 52% of sellers experienced a high level of growth during 1H2021, with 70% expecting additional growth of more than 10% in 3Q2021. Out of the 70%, a third (33%) of sellers surveyed were extremely confident that their sales volume would increase by more than 30% in the same period.
This is according to e-commerce platform Lazada’s first-ever Digital Commerce Confidence Index. The bi-annual report is a business sentiment survey that seeks to map out the perspectives of online sellers in Southeast Asia about the digital commerce industry, while shedding light on the challenges and opportunities that lie ahead.
The Confidence Index surveyed 750 sellers across six markets in Southeast Asia; namely Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore.
The overall index achieved an “optimistic” score of 64, with 0 being “very pessimistic” and 100 being “very optimistic” on the spectrum.
“Many SMEs have embraced new technology and acquired digital capabilities to transform and future-proof their businesses. Despite the challenging health situation and ongoing challenges, our Index shows that sellers remain both resilient and optimistic about the future,” says Magnus Ekbom, chief strategy officer of Lazada Group.
With 47% of consumers reducing their offline purchases and 30% increasing their online spending in 2020, the Covid-19 pandemic has accelerated the expansion of e-commerce and made it a pivotal battleground for sellers looking to scale their businesses, notes Lazada.
While strong growth momentum was generally recorded across all retail categories, sellers from the electronics and fast-moving consumer goods (FMCG) categories appeared to be the biggest beneficiaries of a stay-at-home economy, with 53% reporting that their business recorded strong growth in 1H2021.
See: Refreshing the retail experience
The report also uncovered interesting variations in how sellers felt about the future. For example, sellers from the fashion segment made the biggest leap of faith, says Lazada.
Even though 48% say their businesses improved in 1H2021, 75% say that they expect business to improve in 3Q2021, and almost 40% of them anticipated that their growth would exceed 30% in the same quarter.
“Vaccination programs have had a significant effect and platforms have witnessed fashion bounce back with 70%+ growth in 2Q2021 from 1Q2021 in some categories, mostly apparel,” says Roshan Raj, partner at Indian management consulting firm Redseer.
This comes as Singapore’s retailers are turning to embrace e-commerce. This year, the Singapore Retailers Association took its biggest sale event of the year, the Great Singapore Sale (GSS), and moved it online in a collaboration with Lazada. The eGSS ran from June 6 to July 7, bringing together two mega-sales days by the e-commerce giant.
Speaking to The Edge Singapore last month, James Chang, CEO of Lazada Singapore, called this year’s edition a “huge success”, with one in five Singaporeans shopping on Lazada in the first 24 hours. “Naturally, this translated into higher sales for our merchants, with 2,000 of them selling more than $10,000 during the 6.6 [to] 7.7 time period, with the top categories being health and beauty, electronics and groceries.”
Photo: Bloomberg
