State of Cross-Border E-Commerce in Southeast Asia (SEA) 2021
This article is produced in collaboration with eTail Asia media partner Parcel Monitor.
You can check out the original article published by Parcel Monitor here.
Southeast Asia represents 8.58% of the world’s population (according to this study), and has more than 620 million people. But did you know that its also one of the fastest growing e-commerce markets in the world?
The region has seen intensive growth in digital economies, on track to overtake its Western counterpart with predictions reaching US$1 trillion by 2030.
Together with our media partner Parcel Monitor, we decided to take a close look at the State of Cross-Border E-Commerce in Southeast Asia last year, and asked the eTail community what they thought about its growth.
Who were the recipients of Outbound Parcels from SEA? United States, Australia and the United Kingdom top the list
According to The Parcel Monitor team the United States, Australia and the United Kingdom were the top 3 destinations for e-commerce exports from SEA in 2021. About 32.8% of the international shipments from the region were shipped to American customers, with 12% and 6.1% belonging to those in Australia and the UK respectively.
This reflects SEA as a key source of supply for a diverse range of product categories, such as jewellery in the form of pearls and precious stones.
This is in part thanks to the accessibilities offered by e-commerce-enablers such as Shopify and Amazon, as SEA merchants can now set up online stores easily and gain quick access to consumers in other regions. These platforms not only open the doorways to new markets but can also reduce the friction or difficulty often faced in traditional expansion means.
One example is Shopify, which strives to alleviate difficulties merchants face with regard to cross-border e-commerce by handling tasks such as currency conversion, localization and even SEO.
Most International Parcels Entering SEA Originate From the US, China and South Korea
Data from the Parcel Monitor team show that majority of inbound parcels in SEA can be traced back to the United States, China and South Korea.
Due to dependence on its luxury items and branded goods, its comes as no surprise that the United States made it to the list of top countries of origin for parcels entering SEA.
But what about China? The pandemic has expanded the extensive margins of its exports to SEA, in line with the substantial surge in demand for medical supplies and capital goods. Recent proliferation of online marketplaces like Shein and Taobao, coupled with inexpensive shipping rates, are also encouraging factors that have made it all the more easier for SEA shoppers to buy from China.
Cross-border e-commerce is no stranger to the South Korean market, for its a country where 99.5% of households have access to some form of Internet. As Gerald Hoe, , Head of Global Marketplace ROW at Korea’s leading marketplace Coupang, explains, there is a growing demand for a wide selection of quality international items in Korea. In fact, Korea’s cross-border online sales have increased from $2B in 2017 to $4.5 billion in 2022, representing an annual growth rate of 23%.
“Given the country’s highly wired population, e-tail continues to be a dominant form of shopping, with online transaction values up 13.7% in February 2022 compared to the previous year. There is no doubt that e-Commerce has become a vital part of the day-to-day lives of many customers across the world and Coupang will continue to work hard to shape the future of online shopping and help bring the world to Korea,” stated Gerald.
Singapore Had the Highest Number of Exported Parcels in SEA
Being a small nation with no natural resources, Singapore is one of the most trade-dependent economies globally. The city state derives most of its revenue from foreign trade, with majority going to machinery and equipment (43% of exports), followed by petroleum (19%), chemical products (13%), and miscellaneous manufactured parts (8%).
In terms of regional trades, Singapore exported 71% of its goods to other Asian countries, while only 11.4% and 19.6% went to North American and European buyers, respectively. The data also crowns Singapore with having the highest volume of exported parcels in the SEA region, and a 27.3% increase in the number YoY in H2 2021. There also appears to be a growing trend for domestic goods over imported ones in Singaporeans, considering how the former segment has grown by 27.6%, while the latter remained relatively stable over the past year.
What’s Next in Cross-Border E-Commerce?
As the pandemic-induced e-commerce growth stabilizes and as customers adapt to the “new normal”, we are excited to see what’s next for the SEA cross-border e-commerce landscape in 2022 and beyond.
About Parcel Monitor:
Parcel Monitor is the leading platform for e-commerce logistics insights. By leveraging on our data capabilities, Parcel Monitor creates an open space for the ecosystem to discover, collaborate, and innovate. Through data and the collective wisdom of the community, we believe we can inspire change in e-commerce logistics and deliver a better experience for consumers, merchants, and carriers.
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