Why Brands Need A Southeast Asia Strategy

Southeast Asia is a fast-growing eCommerce market, this is driving a greater need for eCommerce translation services.

This is a guest post by Ana Paul Picasso.

A recent Google-Temasek e-Conomy SEA 2018 report highlights the explosive growth happening in e-commerce in Southeast Asia. SE Asia has long been seen as a challenging market for international brands to enter. Recent investments in infrastructure, improved regulatory conditions alongside rapid growth in internet and smartphone penetration open up the markets for foreign brands. With the growing acceptance of e-commerce, foreign brands no longer need to establish a local presence to target the Southeast Asian consumer.

According to the e-Conomy SEA 2018 report, the SE Asia internet economy reached an inflexion point, headed by e-commerce growth, or more accurately mobile e-commerce growth. In common with other emerging markets, SE Asia internet users leap-frogged all other non-mobile internet devices directly into smartphones.


Despite the rosy future for the e-commerce market in SE Asia, a few factors are hindering its growth.

One of them is the low adoption of cashless payments, like other developing economies, a large percentage of the population is unbanked, consumers don’t have bank accounts and don’t own debit or credit cards to pay for goods and services.

The preferred, and sometimes the only option, is to pay by cash. Most online retailers offer COD (Cash On Delivery). However, some countries like Indonesia, Vietnam and Thailand are slowly shifting to cashless options.

The Indonesia e-commerce sector is the largest in SE Asia, reaching USD$12 billion in 2018 and accounting for more than USD$1 in every USD$2 spent in the region. Chinese e-tailers invested big in Indonesia’s e-commerce companies. China’s e-commerce giant Alibaba invested an additional USD$2 billion in Indonesia’s biggest e-commerce site Lazada earlier this year, to take a controlling stake, putting one of the original Alibaba founders in place to lead its growth. Despite also being the leader in financial inclusion, Indonesians still prefer the COD payment method.

COD Challenges

COD presents challenges to e-tailers: there is uncertainty over whether they will receive payment, there is a greater risk of goods being returned on delivery. With the ubiquitous use of smartphones, it is more likely that Indonesians will embrace digital payment services on their smartphones than getting credit or debit cards. Indonesians have readily adopted ride-hailing services, as these ride-hailing services develop their own digital payment methods, it will be a natural progression for Indonesians to adopt digital payment for e-commerce purchases.

Industry Moves

Tokopedia, vying with Lazada as the leading Indonesian e-commerce platform, decided not to offer a cash on delivery option. To maximise their competitiveness, they focused on other areas. With 2 million merchants on the platform and over 35M monthly visitors, Tokopedia partnered with 15 third-party logistics providers, serving different regions of Indonesia. They also teamed up with local shops and post offices, helping Tokopedia work around the challenge of collecting payments from the largely unbanked population. March 2017, eyeing the explosion of mobile internet users in the country, Tokopedia launched its digital wallet Tokocash. It was an instant success, by the end of 2017 with over 4 million users.

Mobility and Unicorns

Indonesians seem eager to move from cash to mobile payment options. Indonesia’s ride-hailing juggernaut, Go-Jek, became the first “unicorn”, valued at over one billion dollars, has achieved significant success with its mobile wallet Go-Pay.

You can use the wallet to pay for internet goods, services and even utility bills. Other notable players are GrabPay, OVO and T-Cash. Even the state-owned bank Mandiri launched Mandiri e-money to get a slice of the increasingly competitive cashless digital wallet market. Unlike a mobile wallet Mandiri e-money works as a prepaid card.

Trends across the region

The trend of online shoppers going cashless with mobile payment wallets doesn’t stop in Indonesia.


Thailand, the second largest e-commerce market in SE Asia, reached USD$ 3 billion in 2018, doubling its size since 2015, and it’s set to reach USD$ 13 billion by 2025, according to the Google-Temasek report.

Thailand’s mobile internet users spend the most time of any Southeast Asian country on the mobile internet (4.2 hours/day).

Like in Indonesia, the Thai population is largely unbanked, only 8 million people have credit cards, and the preferred payment method for online shopping is COD.

However, in 2017, the Thai government created a plan called Thailand 4.0, a sector-specific industrial policy aiming to attract more investment and unleash the potential of a cashless society. One of the first initiatives was the introduction of PromptPay, a mobile payment service that allows registered customers to transfer funds using only mobile phone numbers or citizen ID. The scheme had already received 14 million registrations by the start of 2018.


Vietnam, the third largest e-commerce market in SE Asia, just behind Thailand, is paving the way for mobile payments options. In a true mobile-first fashion, between January 2017 and January 2018, Vietnam added 14 million Internet users, according to a report by Hootsuite and We Are Social.

This might be the reason behind the boom in e-commerce reaching nearly USD$2.8 billion in 2018, an astonishing 87% growth since 2015.

Eyeing Vietnam’s massive mobile payments potential, non-Vietnamese players have invested in the country. Take Silicon Valley’s investment fund Fenox Venture Capital, for instance; it made an undisclosed investment in digital wallet application OnOnPay, its first investment in Vietnam.
MoMo, the leading player in the Vietnamese e-wallet market, already has 8 million users and has offered preferences to clients who pay for railway tickets, insurance policies and shopping.

Brand Strategy

With all this growth and potential, it is important that brands selling globally have a Southeast Asia strategy. It is important to remember that it is not one market. You will need a language strategy, a platform strategy and a social media marketing strategy. These are young, mobile-first, internet-savvy, social-media friendly markets.

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