Southeast Asian ecommerce to expand 16% as AI change shopping
Southeast Asian e-commerce industry is set for another year of double-digit growth, driven by video-based retail and AI-driven shopping tools, as reported by Google, Temasek Holdings, and Bain & Co., as cited by Nikkei Asia. The report anticipates that gross merchandise value for the e-commerce sector will attain $181 billion in 2025 across six key markets — Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam — reflecting a 16 percent increase from $156 billion in 2024. The region’s total digital economy, when combined with food delivery, ride-hailing, and travel, is projected to grow by 15 percent, reaching $299 billion, thereby sustaining last year’s growth rate.
A significant factor contributing to growth is video commerce, in which consumers purchase products via livestreams and short videos. The segment is expected to represent 25 percent of all e-commerce GMV by 2025, in contrast to under 5 percent in 2022. Platforms like TikTok and various regional players are empowering creators to promote and sell products in real-time. Fashion and accessories dominate the segment, accounting for 27 percent of video commerce GMV, with rings and earrings ranking as top-selling products. The report indicated that beauty and personal care account for 21 percent, fueled by the demand for sunscreens and foundation.
Artificial intelligence is being utilized more and more to enhance product recommendations, personalisation, and inventory management, thereby creating a more intuitive online shopping experience. Retailers are utilizing AI to enhance discovery and streamline supply chains as competition escalates in Southeast Asia’s mobile-first markets. The report also anticipates robust expansion in associated digital sectors: food delivery is projected to increase by 14 percent, reaching $22 billion; transport services are set to increase by 16 percent, reaching $11.1 billion, bolstered by the availability of affordable ride-sharing subscriptions; and online travel is projected to grow by 11 percent, although travellers are opting for shorter trips due to rising costs.
The average trip duration in the Asia-Pacific region has decreased to 5.3 days, down from 6.1 days last year, reflecting the impact of inflation on consumer travel patterns. Overall, the report underscores how Southeast Asia’s digital economy continues to show resilience and adaptability, driven by innovation in social commerce and the rapid adoption of AI technologies that are reshaping the retail experience across the region.
