Southeast Asia, The Home For Digital Transformation
Southeast Asia, The Home For Digital Transformation
Southeast Asia, The Home For Digital Transformation
A SY N C S OU T H E A S T A S IA R EP O R T
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Table of contents
Southeast Asia
SYNC Southeast Asia is a thought-leadership
series about keeping in tune with the consumers
of tomorrow. Through this series, Facebook READ THE REPORT
READ THE REPORT
and Bain & Company take business leaders
deeper into the emerging trends and rising
opportunities shaping the vibrant region. How Southeast Asia’s emerging middle Riding the digital wave: Southeast
class is embracing the digital world Asia’s digital consumer in the
discovery generation
The new consumer habits and digital The spending behaviour of Southeast
journeys of the fastest growing population Asia’s online shoppers, the challenges
in five Southeast Asian countries, and brands face in reaching them and the
what this means for brands. opportunities that lie ahead.
2020 2020
How recent events have spurred changes How Southeast Asian consumers
for digital consumers and which trends have accelerated their move from offline to
accelerated or reversed vs last year. online at an exhilarating pace.
Introduction 4
This “new normal” resulted in new purchasing habits, new ways to discover, new
preferences and new expectations. A new consumer way of life has emerged
from these transformations. But which changes are transient and which ones
will last? How will consumption patterns change when restaurants, cinemas and
borders reopen?
All these are part of the paradigm shift brands are witnessing in consumer
behaviour. It’s manifesting in how people approach life, in how they work, in how
they play. Consumers are not just adjusting to a new way of life at home—they
are defining it on their own terms. Discover the rise of digital trends starting from
home and uncover the new digital expectations set to transform Southeast Asia.
Introduction 5
Top 10 insights
Since the start of the pandemic, 70 million people— In 5 years, Southeast Asia’s ecommerce gross
equivalent to the entire population of the United merchandise value, which refers to the monetary value
Kingdom—have become digital consumers. Almost 8 of goods or services sold through online marketplaces
in 10 people (78%) among Southeast Asia’s population over a specific period of time, is expected to reach
of 15-year-olds and above will be digital consumers by US$254 billion. That’s nearly double its US$132 billion
end-2021, with the strongest growth seen in Indonesia. size by the end of 2021 and represents a compounded
The region’s online retail penetration is also projected to annual growth rate of 14%.
grow 85% year-on-year by end-2021, and is now larger
than India’s or Brazil’s.
Consumers in the region now buy online for an average of E-wallets are now the preferred payment option for
8.1 categories—60% higher than the 5.1 average seen in 37% of consumers compared with 28% who say they
2020. Indonesian consumers buy across the widest range still prefer cash. When asked why people don’t use
of categories at 8.8, followed by Thailand at 8.3 and the online payment options, the top 3 cited reasons were
Philippines at 8.2. security concerns, privacy concerns, as well as high
charges and fees.
Introduction 6
From discovery to purchase, online channels have become Twenty-two percent of respondents cite social
ever more prevalent in the purchase journey of consumers media videos as the top channel for discovery—
today. Around 80% of channels that consumers use to 3x more than did so the previous year.
browse and discover new products are online. The number
of respondents who say they shop “mostly online” have
gone up by 35%. And when asked whether online or offline
is their top channel for considering brands, at least 7 in 10
respondents said “online”.
9 Home-centric lifestyles to
persist beyond the pandemic. 10 Investments fuel fintech,
e-learning, ecommerce and other
digital disruptors in the region.
Nine in 10 of the executives we interviewed believe a hybrid
work-from-home model will be the norm after COVID-19. More than 80% of venture capital funds have
Some buying activities are also likely to move “out of home” flowed into the internet and technology so far, with
as restrictions ease, but 75% of the time spent shopping the vast majority of it going into the fintech sector.
online from home will remain. Majority of consumers also plan
to either increase or maintain their at-home online spending
on groceries, self-care and other categories.
Digital growth
finds a new home
Digital growth finds a new home 8
Offline to online gains In every country, at least 70% of 15 years old and
above will count as digital consumers by year-end
steam as Indonesia leads
for 2nd year in a row Southeast Asian population 15 years old and above – 448M
22M
Each country is projected to end 2021 with an even larger (88%)
majority of digital consumers than they had in 2020, with
Indonesia topping the growth rate for a second year in a row. 22M 4M
165M 61M (78%) (88%)
53M (71%) 42M (73%) (79%)
Almost 8 in 10 people (78%) among Southeast Asia’s population (80%)
3
Data compiled and modelled from Passport - Economies and Consumers Annual Data 2018 to 2026F by Euromonitor; Forrester
ForecastView, Forrester Analytics: Online Retail Forecast, 2019 to 2026F (Asia-Pacific, China, India, Southeast Asia, USA) by Forrester
Research; Digital 2021 (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) by Hootsuite, Jan 2021; Riding the Digital
Wave: Capturing Southeast Asia’s Digital Consumer in the Discovery Generation by Bain & Company (Facebook-commissioned survey of
12,965 respondents from ID, MY, PH, SG, TH, VN), Jun 2019.
Digital growth finds a new home 12
Estimated average
digital spending $381
billion
2.0X
$254b
Estimated ecommerce
1.8X
gross merchandise
1.6X
value by end 20214 $132b
$109b
4.5X
$75b
$67b 3.8X 1.4X
1.3X 1.2X $56b
$30b
$15b $19b $22b $30b
$8b $8b $10b $12b
4
Data compiled and modelled from Passport - Economies and Consumers
Annual Data 2018 to 2026F by Euromonitor; Forrester ForecastView, SEA ID MY PH SG TH VN
Forrester Analytics: Online Retail Forecast, 2019 to 2026F (Asia-Pacific,
China, India, Southeast Asia, USA) by Forrester Research; Digital 2021
(Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) Note: Ecommerce GMV includes B2B2C/B2C selling of physical products through online channels, not including digital products (e.g. sim-top-ups) nor social commerce;
by Hootsuite, Jan 2021; Riding the Digital Wave: Capturing Southeast *GMV estimation methodology: Ecommerce GMV was estimated from multiple sources to account for Covid impact. Total retail figures from Forrester were adjusted
Asia’s Digital Consumer in the Discovery Generation by Bain & Company accordingly to account for the increase in GMV from revised estimation. Data compiled and modelled from expert interviews, Forrester ForecastView, Forrester
(Facebook-commissioned survey of 12,965 respondents from ID, MY, PH, SG, Analytics: Online Retail Forecast, 2019 to 2026F (Asia-Pacific, China, India, Southeast Asia, USA) by Forrester Research; Riding the Digital Wave: Capturing Southeast
TH, VN), Jun 2019. Asia’s Digital Consumer in the Discovery Generation by Bain & Company (Facebook-commissioned survey of 12,965 respondents from ID, MY, PH, SG, TH, VN), Jun 2019.
Digital growth finds a new home 13
Data compiled and modelled from Passport - Economies and Consumers Annual Data 2018 to 2026F by Euromonitor; Forrester ForecastView,
Forrester Analytics: Online Retail Forecast, 2019 to 2026F (Asia-Pacific, China, India, Southeast Asia, USA) by Forrester Research; Digital 2021
(Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) by Hootsuite, Jan 2021; Riding the Digital Wave: Capturing Southeast Asia’s
Digital Consumer in the Discovery Generation by Bain & Company (Facebook-commissioned survey of 12,965 respondents from ID, MY, PH, SG, TH,
VN), Jun 2019.
Digital growth finds a new home 14
Every category’s online show the most dramatic growth and are expected
to nearly triple again (2.8x) for the second year in
penetration to nearly double;
a row.6
groceries to nearly triple
By the end of 2021, the online penetration from Southeast Asia will also reach another milestone:
every category is projected to grow at least Nearly half the sales from consumer electronics
1.7x (nearly double), even faster than what was and accessories will by the end of the year come
observed last year. Online groceries continue to from online, surpassing that of India.6
Groceries’ online penetration triples again; nearly half the sales % Online penetration (2021F)
from consumer electronics now come from online SEA India China
56%
47%
1.9X 2.8X
37% 2.1X 1.7X
31%
22% 19% 19%
6% 7% 9%
6%
2% 1%
Expected SEA-6
CAGR (21-26F) 13% 18% 21% 19% 15%
Note: Not representing breakup of other categories (~US$128B retail); *Not including food delivery (*) Penetration figures include retail GMV / ecommerce GMV for select categories: Electronics, clothing, food and drinks, household goods, and personal care;
*GMV estimation methodology – total online GMV was estimated from multiple sources to account for COVID-19 impact, total retail figures from Forrester were adjusted accordingly to account for the increase in GMV from revised estimation; **share of total
retail size of the 5 selected categories; ecommerce includes B2B2C/B2C selling of physical products through online channels, not including digital products (e.g. sim-top-ups), nor social commerce
6
Data compiled and modelled from Passport - Economies and Consumers Annual Data 2018 to 2026F by Euromonitor; Forrester ForecastView, Forrester Analytics: Online Retail Forecast, 2019 to 2026F (Asia-Pacific, China, India, Southeast Asia, USA) by
Forrester Research; Digital 2021 (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) by Hootsuite, Jan 2021; Riding the Digital Wave: Capturing Southeast Asia’s Digital Consumer in the Discovery Generation by Bain & Company (Facebook-
commissioned survey of 12,965 respondents from ID, MY, PH, SG, TH, VN), Jun 2019.
Digital growth finds a new home 15
“What we see in China and the US is more of a channel shift from offline to online,
whereas in Southeast Asia the growth in consumer spending and retail is driven
by online channels. In the future, we will be talking about digitalised commerce
instead of gross merchandise value and penetration, so businesses will need to
focus on driving the most value out of the omnichannel purchase journey.”
Magnus Ekbom
Chief Strategy Officer, Lazada Group
Digital lifestyle
of the new
consumer
Digital lifestyle of the new consumer 17
range of categories
Southeast Asian consumers now buy across 8.1 categories vs 5.1 in 2020
1.7X
1.5X
1.6X 8.8 1.7X
8.3
8.1 8.2 1.5X
1.3X 1.5X
7.7
7.6 7.5
5.4
5.1 5.1 5.0 5.2
5.0 4.7
SEA ID MY PH SG TH VN
Source: “Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Survey question: Q13. For each of the categories
you have selected, please indicate how much you are spending online (vs. offline)?
7
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021
New digital habits 21
Groceries, food
Before last 12 months Last 3-6 months Last 3 months
delivery, healthcare
among drivers of Streaming
services
Home office Groceries
(fresh)
52%
purchased healthcare
online for the first time
8
“Southeast Asia, home for digital transformation” by Facebook and Bain & in the past 3 months8
Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY,
PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q18. When
was the first time you purchased the following categories online?
New digital habits 22
53
48 49
45 46
40
38
36
25%
35
33 34
31
29
22
9
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q13. For each of the categories
you have selected, please indicate how much you are spending online (vs. offline)? – mostly purchase online refers to respondents who purchase >50% online compared to offline; Responses in countries are shown based on the 2 responses collected per
responded (2 categories asked to each); Consumer switch to online is by considering a change in 2020-21 response for a unique user for either of the 2 categories they respond to.
New digital habits 23
Online groceries see The largest increase in “mostly online” shoppers Categories like household furnishings, consumer
was seen in groceries, personal care and household electronics and household appliances enjoy the highest
widespread adoption furnishings. average spend per online transaction but are bought
less frequently. A possible reason is because they are
Categories where at least half the respondents say they likely to involve big-ticket items such as sofas, mobile
shop mostly online include beauty and cosmetics; and phones or refrigerators. In contrast, categories like
clothing, footwear and accessories. groceries, toys or cosmetics have the lowest average
spend per online transaction but are bought more often,
probably because they are likely to cost much less.
Clothing Beauty Electronics Toys Baby Personal Home Household Groceries Other Groceries Groceries Groceries
care care office appliances (packaged) household (alcoholic (non alc. (fresh)
furnishing beverages) beverages)
Purchase frequency
in last 3 months
4.0 3.8 3.5 4.1 7.2 4.3 3.6 3.1 8.3 3.4 6.6 7.1 9.0
10
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: *Shop mostly online refers to consumers who
spend more than 50% of their total spending for a particular category online; Survey question: Q13. For each of the categories you have selected, please indicate how much you are spending online (vs. offline)?, Q19 How many times did you purchase each
category online in the last 3 months? Consumer electronics and accessories, Q20. On average, how much did you typically spend on each category, each time you purchased ONLINE?
New digital habits 24
convenience
“Value is only a hygiene factor but the 1 COVID–19
restrictions 2 Saves time
3 4
end-to-end encounter, from frictionless Deals and Ease of price
payment to flexible delivery methods to promotions comparison
after-sales services. If you become the
consumer’s first choice, you'll see they're
willing to spend a bit more for a better
and more premium customer experience.” 5 Shop 24/7
Pornchanok Tanskul
Chief of Staff, Central Group
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents
from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Qnew4. Why have you shifted more of your spend to online?
The pandemic
has changed the
purchase journey,
redefining how
consumers discover,
shop and pay
Redefining the purchase journey 26
2
possibly because ecommerce is evolving to blend
entertainment with shopping. It now ranks 4th Video streaming
overall compared with 5th for gaming.
4
purchase journey, and online
shopping has evolved to become an Ecommerce
5
Co-Founder and Chief Strategy Officer, Lazada Group
Gaming
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from
ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q7. What is your average daily screen time on your primary digital device,
per day?; Q8. How is your daily internet screen time divided into the following activities?; (*) Avg. for all surveyed participants; (**) Social media also
includes short videos, Video streaming includes medium and long videos
Redefining the purchase journey 27
80% of channels
used to browse and
research products
are online
Browsing and researching about products
are now done mostly online instead of
offline. At the same time, the share of
spending that goes to offline channels is
shrinking, our study found.
11
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain &
Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY,
PH, SG, TH, VN.) Survey conducted May 2021
Redefining the purchase journey 28
Repeat
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY,
PH, SG, TH, VN.) Survey conducted May 2021. Note: ‘Social media – videos’ includes videos on social media platforms (e.g. Instagram stories) and short video
applications (e.g. TikTok), ‘Other Video’ videos on video platforms (e.g. YouTube) and streaming platforms (e.g. Netflix), ‘Others’ includes super apps, emails
12
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain from brands and gaming; Survey Q41. For the following categories, where did you browse/ discover the products you ended up buying?; Survey Q45. for the
& Company. (A Facebook-commissioned survey of 16,706 respondents from ID, following categories, where did you find information and compare products, before you ended up buying your selected product?; Survey Q25. what is the %
MY, PH, SG, TH, VN.) Survey conducted May 2021 allocation of your spend across different channels this year?
Redefining the purchase journey 29
Discovery stage
Discovery Commerce matters:
Most consumers still don’t know
what they want or where to buy
Sixty-five percent of respondents said they don’t
know what they want and where to buy when they
shop online. Called the Discovery Generation,
many of them discover new products largely
through online inspiration and influence, and their
decision-making is largely influenced by what they
encounter upon browsing online and offline.
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain
13
% respondents who don’t know what they want when shopping online ‘Essentials’ category
74%
71% 71% 71% 72%
70%
61% 61%
Baby Groceries Groceries Groceries Beauty Groceries Personal Household Home Electronics Clothing Other Toys
care (alcoholic (fresh) (packaged) (non alc. care appliances office household
beverages) beverages) furnishing
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Notes: (*) Respondents stated they did not know which
channel to purchase from, which exact product to purchase, or both. Survey question: Q24. Which statement would best describe your purchasing journey for the following categories online? Options possible: “I do not know what I want and I am just browsing
on the internet”, “I roughly know what I want, but I do not know what are the different options available in the market (specifications etc.)”, “I know the exact product that I need, the brand, but I do not have a specific channel to get it, “I know exactly the product
that I
Redefining the purchase journey 31
Most Southeast Asian countries show greater interest in trying new stores
% of respondents who tried new Top reasons people purchase from
stores they never heard of before new stores
2020 2021
SEA 47% 51%
“I often buy from
ID 40% 44% new stores if I find the
products interesting”
PH 36% 45%
TH 61% 64%
VN 64% 61%
14
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q34. Have you purchased any
items from a new online store that you have never heard before in the last 1 year?; Q35. Which of the following describes your behavior in purchasing items from new online stores that you have not heard of before?
Redefining the purchase journey 32
73% 80%
specifically have seen its popularity surge as
one of the most likely places where people say
they might discover a new product. Twenty-two
percent of respondents cite social media videos
as the top channel for discovery—3x more than
did so the previous year.15 2020 2021
Ecommerce marketplaces also saw its % responses citing as top channel for discovery
popularity grow by 1.3x. In 2021, 26% of
respondents cited it as a top discovery channel,
compared with 20% the year before.15
Social media
Social media (37%)
image feed
(15%)
Ecommerce 7%
marketplaces Social media
(26%) videos (22%) Social media
videos (2020)
Other
Others videos
(22%) (15%)
15
“Southeast Asia, home for digital transformation” by Facebook and Bain &
Company. (A Facebook-commissioned survey of 16,706 respondents from ID,
MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q41.
For the following categories, where did you browse / discover the products you
ended up buying? Please select and rank up to 5 channels for each category;
*Others includes super apps, gaming platforms, emails and news; *”Alibaba”
includes SG Shop, Taobao, Alibaba and AliExpress. 2021
Redefining the purchase journey 33
Evaluate stage
Social media, video Across categories, social media dominates in
platforms are top brand influence, with video platforms close behind
consideration channels
% responses citing top channel that influences brand consideration
Video
Online word
platforms
Cite “online” as top channel for brand of mouth (15%)
(21%)
consideration, with social media,
video platforms most influential
Purchase stage
Ecommerce, social commerce account for half of online purchases
Ecommerce marketplaces,
% online as primary channel
social commerce serve as
key purchase channels
Unlike the Discover stage and the Evaluate
stage, a sizable minority of Purchase-stage
46% 56%
activities still take place offline through
supermarkets, department stores, mom and
pop stores and other retailers. 2020 2021
That said, the majority of purchases now take % of share spend by channels
place online, with ecommerce marketplaces
(32%) and social commerce sites (21%)
making up at least half of online purchases.17
Ecommerce
marketplace Social
(32%) commerce
(21%)
Purchase stage
As investments fuel digital
disruptions, e-wallets dethrone
“king cash” as preferred way to pay
Southeast Asian consumers now prefer who say e-wallet is their preferred way to
e-wallets over cash for online transactions, pay, with some countries demonstrating
a change that coincides with a year in which stronger growth than others. The
investors have poured more money than ever Philippines saw a whopping 133% growth in
into fintech ventures. consumers who prefer e-wallets, followed
by Malaysia at 87%, Vietnam at 82% and
E-wallets are now the preferred payment
option for 37% of consumers. By comparison,
Indonesia at 64%.18
~70%
28% said they still prefer cash, 19% prefer While e-wallets have experienced strong
credit or debit cards and 15% prefer bank growth in every country, its overall market
transfers.18 share remains varied. Despite growth in the
Philippines and Vietnam, for example, cash
It’s the first time in our study that e-wallets remains the preferred way to pay, while
ranked higher than cash. Last year, cash was debit cards and credit cards continue to
Growth in the number of
the preferred payment by 34% of consumers reign in Malaysia and Singapore.
consumers who say they prefer
followed by e-wallets at 22%.18 But e-wallets are poised to overtake these
e-wallets for online transactions
coming years following its explosive growth
The difference translates to a 70% year-on- in the past 12 months.18
year growth in Southeast Asian respondents
18
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH,
SG, TH, VN.) Survey conducted May 2021. Note: Survey Qn 21: Which payment option do you prefer the most when shopping online? Survey Qnew3: What is the main
reason that you are not using online payment options?
Redefining the purchase journey 37
22%
E-wallet
37%
23%
Credit
/debit card 19%
19%
Bank transfer
15%
34%
Cash
28%
2020 2021
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey
of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey Qn 21: Which payment
option do you prefer the most when shopping online? Survey Qnew3: What is the main reason that you are not using online
payment options?
Redefining the purchase journey 38
Purchase stage
Security, privacy concerns weigh
on online payments
Main reasons for not using online payment methods
In every country, security concerns topped the
list of reasons respondents did not use online
payment options. This was followed by worries Worried about
about privacy as well as high charges and fees.
Most cited 1
security
The findings suggest that broader adoption of
digital payments rests on addressing concerns
surrounding these 3 issues.
Worried about
Most cited 2
privacy
High charges
Most cited 3
and fees
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG,
TH, VN.) Survey conducted May 2021. Note: Survey question: Q25. what is the % allocation of your spend across different channels this year?
Redefining the purchase journey 39
“Over the past year, we have not only seen rapid growth in the digital consumer population but
also broadened expectations from buyers. Users are increasingly coming to our platforms to
discover, be entertained, and shop on the go across a wider selection of products and categories.
In tandem with this shift online, we are also seeing a rapid increase in adoption of our e-wallet
services which makes it more seamless for consumers to move more of their activity online.
This pace of change will continue in Southeast Asia and brands and sellers will need to innovate
to sustain engagement with these mobile-first consumers.”
Santitarn Sathirathai
Group Chief Economist, Sea
“The digital investments we made some seven years ago have rewarded us handsomely and put
us in a strong position today. Being ‘phygital’ (physical-digital) sets us apart as we ensure banking
remains accessible to everyone.
From June 2020 to August 2020, new customer signups for our digibank app saw over 200%
year-on-year growth. From Jan 2021 to April 2021, an additional 600,000 customers activated
their online spending for the first time, 27% of whom are aged 51 and above. Our numbers are a
testament to the strong demand from consumers for our digital and payment services.”
Shee Tse Koon
Group Executive and Country Head, DBS Singapore
New ways
of purchasing
emerges, with
social commerce
gaining popularity
in Southeast Asia
The rise of social commerce 41
Conversational commerce
Direct conversation between sellers and
buyers on online platforms, such as via chat
or livestream.
Group buying
Products and services offered at a lower
price if enough buyers make the purchase.
The rise of social commerce 42
What drives social The growth of social commerce has been fueled by
coronavirus restrictions and underlying demand.
Respondents also cited other reasons for using
social commerce. These include:
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q25. what is the % allocation
of your spend across different channels this year?
The rise of social commerce 43
Platform shophopping
turbocharged by 50%
Online shoppers visited 50% more platforms
but became slightly more loyal to their most-
purchased brands in the past 3 months.19
19
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain &
Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY,
PH, SG, TH, VN.) Survey conducted May 2021
Digital shophopping accelerates as a new way of life 46
Average number of websites used per respondent % of responses who switched most-purchased brand in the past
3 months across categories vs the same period the year prior
2020 2021
63%
ID 5.1 8.2 1.6X 61%
51%
51%
MY 4.8 7.0 1.5X 44% 45%
35%
PH 4.3 7.8 1.8X
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q26. For <category X>, which
online shops did you shop at in the last 1 year for?
Digital shophopping accelerates as a new way of life 47
“Consumers are more willing to try new brands and platforms, and
loyalty changes accordingly as a result. The key to maintaining loyalty
comes down to the overall experience consumers get. In the past,
consumers’ decision-making process was about physical reach and
access to products, but now it relies more on elements of convenience.”
Tirayu Songvetkasem
Chief Digital Officer, Siam Makro
Digital shophopping accelerates as a new way of life 48
Reliability and
customer experience Consumers switch for better pricing,
still among top reasons quality and availability
Value-for-money 44%
20
“Southeast Asia, home for digital transformation” by Facebook and Bain &
Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY,
PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question Q15. Why
have you switched the brand you buy the most?; Found ‘better product’ could imply
variety factors depending on category, but may not necessarily mean poor/declining
quality of ‘most purchased’ brand
Digital shophopping accelerates as a new way of life 49
The battle for loyalty Product, ESG factors drive brand switching beyond value
has moved beyond Most cited reasons for switching brands
TH
Availability
PH
21
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company.
(A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.)
Survey conducted May 2021. Note: Survey question: Q32. Have you changed your most
frequently used online shop in the last 3 months?, Q33. Why have you switched your
most frequently used online shop?
Digital shophopping accelerates as a new way of life 50
Environmental, Social and Governance (ESG) factors among top 5 reasons to switch brands
SEA #3
of respondents rank ESG
MY #4 PH #4 VN #3
14%
13% 12%
11% 11% 11% 11% 11%
10%
9% 9% 9%
8%
Home Baby Groceries Personal Electronics Other Household Groceries Groceries Groceries Toys Beauty Clothing
office care (fresh) care household appliances (packaged) (non alc. (alcoholic
furnishing beverages) beverages)
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q15. Why have you switched the
brand you buy the most? – 10 options provided as “reasons behind consumers switching brands”
Digital shophopping accelerates as a new way of life 51
Sustainability factors
compel consumers
to pay premium
% of respondent breakdown by the extra amount they’re willing to pay for ESG
3% 3% 3% 2% 6% 5% 3%
92%
8% 9% 7% 72% 9%
8% 10%
80% 82% 77%
80% 86%
78%
25%
13%
3%
~80%
8% 7% 6% 7%
SEA ID MY SG PH TH VN
of Southeast Asian
consumers are willing to pay 22
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from
ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey Qn Qnew9: How much more are you willing to pay more to incorporate sustainability/
a 10% premium for ESG22 social responsibility in the products you consume?
Digital shophopping accelerates as a new way of life 52
~60% of digital consumers in Tier 1 and Tier 2 cities are now high spenders 77
% of high spenders in Tier 1 and Tier 2 shoppers across countries 2020 2021
77%
69%
76%
63%
61% 62% 69%
59% 59% 60%
57% 56% 61% 56% 56%
59% 58% 59%
56% 49%
53% 52% 52%
52%
46%
42%
Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 1 Tier 2 Tier 1 Tier 2
SEA ID MY PH SG TH VN
23
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021
Digital shophopping accelerates as a new way of life 54
average spend,
Don’t know what products they want 65% 64%
purchase frequency
diverge despite Discover via social media,
similarities in short videos, messaging
(% of those who are discover-led)
42% 47%
behaviour
Search via ecommerce
Consumers from Tier 1 and Tier 2 cities are
(% of those who are search-led)
24% 22%
becoming more alike: Both don’t exactly know
what products they want or where to get them, at
least half of them switch brands and at least 4 in
10 discover products via social media, short videos
and messaging.23
Average spend per online purchase $50 $39
23
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID,
MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Tier 1 and 2 cities defined in tandem with Facebook respective country marketing teams in 2019
report; Survey question: Q24. Which statement would best describe your purchasing journey for the following categories online?, Q41. When browsing and
discovering products, which applications were you using across the following channels?, Q45. For the following categories, where did you find information
and compare products, before you ended up buying your selected product?, Q14. For <category X> ?, have you recently (in the last 3 months) switched the
brand that you buy the most?, Q20. On average, how much did you typically spend on each category, each time you purchased ONLINE?, Q19. How many
times did you purchase each category online in the last 3 months? (*) Includes only consumer product categories
Life after coronavirus (COVID-19) 55
is here to stay
Southeast Asians spend most of their time doing
Some buying activities are likely to move “out of home” as
activities from home, and they expect the majority
of it to continue to remain in-home as COVID-19 restrictions ease, but majority will remain post COVID-19
restrictions ease, our study found.
% of time spent on activities to remain after COVID-19
According to respondents, 67% of their time is spent
at home, with the highest “in-home” activity taking
place for food (79%), entertainment (75%) and 72%
alcoholic beverages (72%).24
At-home spending on
groceries, self-care
expected to last
Consumers plan to either increase or maintain
their at-home spending across categories post
COVID-19, be it online or offline. Groceries,
babycare, personal care and cosmetics are just
some of the categories that will see at least
80% of the demand sustained or increased
post-pandemic, be it online or offline. 26
26
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain &
Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY,
PH, SG, TH, VN.) Survey conducted May 2021
Life after coronavirus (COVID-19) 57
8% 12% 12% 10% 14% 19% 22% 25% 27% 24% 31% 32% 36%
Groceries Baby Groceries Personal Groceries Beauty Electronics Clothing Groceries Household Home Other Toys
(fresh) care (packaged) care (non alc. (alcoholic appliances office household
beverages) beverages) furnishing
Majority to increase or maintain spending post-coronavirus (COVID-19) across categories (online only)
% of respondents by online spending on categories post COVID-19
16% 17% 19% 21% 22% 27% 25% 28% 26% 28% 28% 26% 31%
39% 34% 35% 31% 32% 34% 33% 30% 28% 28% 27% 25% 24%
Baby Personal Beauty Electronics Clothing Groceries Groceries Groceries Groceries Toys Home Household Other
care care (fresh) (packaged) (alcoholic (non alc. office appliances household
beverages) beverages) furnishing
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: QNEW2. Will you likely spend
more, the same or less online on the following categories once COVID-19 is not a big risk anymore and restrictions have been lifted, compared to what you are spending currently?
Life after coronavirus (COVID-19) 59
27
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain & Company. (A Facebook-
commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021
Life after coronavirus (COVID-19) 60
PH 14% 24%
Domestic Foreign
TH 2% 3%
Note: Singapore’s # of arrivals in 2021 (as % of 2019 pre-pandemic levels) is 6%
for Domestic; Lit search, Bain analysis Travel Travel
28
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain
& Company. (A Facebook-commissioned survey of 16,706 respondents from ID,
MY, PH, SG, TH, VN.) Survey conducted May 2021 Have not spent Spent VN 2% 120%
Life after coronavirus (COVID-19) 61
350M 8 in 10
digital consumers in Southeast Asia Southeast Asian consumers
by end of 2021 have gone digital
60% 1.8X
more categories purchased online growth in online retail spend
3X 50%
growth in social video more online shops purchased
popularity for product discovery at versus 2020
~70% 75%
of time spent for activities of time spent shopping online
in-home to remain at home to continue
“Southeast Asia, The Home For Digital Transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents
from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021
Digital trends
to set pace
Digital trends to set pace 63
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q21. Which payment option do
you prefer the most when shopping online? Q29. What do you enjoy about your shopping experience on selected shop?
The future of ecommerce 64
satisfied as ecommerce The Net Promoter Score30 is a measure of customer loyalty developed by Bain & Company
in 2003. It gauges answers to a simple question: “On a scale of 1 (lowest) to 10 (highest),
marketplaces find how likely are you to recommend our product or service to a friend or colleague?”
footing People who respond with a 9 or 10 are Promoters, while those who give a 6 or below tend to
be Detractors whose complaints can demoralise your employees or drive away customers.
Customer satisfaction jumped significantly in just a People who answer 7 or 8 are “passives” who are satisfied with a business but may leave
year, suggesting that ecommerce firms are starting for a better offer. The Net Promoter Score is determined by subtracting the percentage of
to gain traction as they refine their approach to Detractors from the percentage of Promoters.
customer experience.
A high Net Promoter Score means a company has more Promoters and fewer Detractors,
The Net Promoter Scores (NPS) of ecommerce and is likely to be worth more than its competitors over the long run.
marketplaces have doubled and in some cases
quintupled from 2020. For Southeast Asia
Average satisfaction, as measured by NPS, doubled in
as a whole, for example, the average NPS of
ecommerce marketplaces stood at 53%, up from the past year102
the previous year’s 23%.29
Highest NPS by country (%) 2020 2021
Customer experience
key to boosting
satisfaction Top 5 reasons Top 5 reasons
Customer experience issues such as for positive NPS: for negative NPS:
poor delivery experience, difficult return
1 1
processes and lack of information are
Price Product meets
among the top complaints of Detractors.
expectations
Addressing these issues, along with
product-related complaints, can reduce the
number of detractors and lead to a higher
Net Promoter Score.
2 Availability 2 Product quality
5 Information 5 Information
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH,
SG, TH, VN.) Survey conducted May 2021. Note: Survey question: Q29/30. What do you enjoy/ dislike about your shopping experience on selected shop?, Price: “I
am able to find the best prices for the product”/”The platform does not offer the best pricing”, Availability: “I am able to find the product of my choice”/”I am not
able to find the product I am looking for”, Product range: “Wide range of product selection within the category”, Information: “Availability of information (images,
description, reviews, etc.) to help me select the right product”, Product quality: “Product quality assurance”/ ”I do not feel assured about product quality”, Product
meets expectation: “”Products sometimes match my expectations (in terms of quality, colour, etc.), Delivery time: “Delivery experience is great / Long delivery
time”, Return/ replacement process: “process is convenient”/”process is cumbersome”, Payment process: “Frictionless payment options and the process is
convenient”/ “Payment options are limited and the process is not convenient”.
Investments into emerging companies 66
emerging companies
US$9.5 billion in deals from venture capitalists, private equity last year
PE/VC investments value and deal count in SEA (2019-Q1 2021, USD B) PE investment value VC investment value
3.6B
0.6B
3.0B
1.2B
2.3B
2.2B
Deal value by sector of investment (USD B, Q1 2020 – Q1 2021)106 PE investment value VC investment value
Others (4%)
Others (10%)
Medical (8%)
Transport & logistics ( 3%) Others (25%)
Computer related (5%) Others (36%)
Financial services (7%)
Health (8%)
Ecommerce
enabler
(31%)
“Southeast Asia, home for digital transformation” by Facebook and Bain & Company. (A Facebook-commissioned survey of 16,706 respondents from ID, MY, PH, SG, TH, VN.) Survey conducted May 2021. Note: * Excl. ~$700M Grab deal in Q1’20, ** Excl. $300M
Grab deal in Q1’21. Deal size and counts shown only include those reported with transaction figures; Only for PE/ VC investments and PE buyouts, excl. Acquisition, Division Purchase, JV Buyout, M&A Investment; Trademarks and copyrights displayed herein are
the property of their respective owners | Source: AVCJ; Lit. Search; Bain analysis
Investments into emerging companies 68
“To overcome the impact of COVID-19, central banks will keep the costs of capital
low—which means until this changes, the most esoteric fintech models will make
sense. Therefore, we are looking at a massive triple explosion of fintech. Not only
are regulators removing the regulation barriers, we’ll also see a roaring river of
capital with no friction.”
Dmitry Levit
General Partner, Cento Ventures
Investments into emerging companies 69
Surge in online
transactions paves way
for new forms of finance
More dry powder to Despite the robust deal flow seen in the past year,
there is appetite for more technology and internet
appetite grows
Significant fund and dry powder Southeast Asia has the highest Consumer shows appetite
for growing sectors proportion of investment in to spend on digital services
tech space
IN 52% MY 33%
PH 34%
US Total unspent
capital with
Southeast Asia
CN 20%
SG 30%
Habit changes
Disruptor driver Winning capabilities
(since COVID-19)
Notes: * “Since COVID” refers to within one year ago from the date that the survey was taken; survey question: Q18 When was the first time you purchased the following categories online? | Source: Lit. Search; Forrester, Bain analysis; "The emerging post-COVID
consumer" by Bain & Company (Bain & Company analysis and insights data on the markets of ID, MY, PH, SG, TH, VN), Published in 2021
Investments into emerging companies 72
1. Rewrite a
digital-first agenda
Consumers have spent close to 2 years developing
online buying and browsing habits. Those habits
are firmly embedded and not about to change,
influencing everything from how consumers
hear about products to how they evaluate them
against competitors and ultimately, how they make
purchases and develop brand loyalties.
Ensure seamless engagement by optimising execution levers across the consumer journey
Drive maximum traffic Optimise finding the right details Boost purchase through right Data-driven decision making
through understanding of of product (vs. alternative or online assortment, a tailored and test-and-learn adaptation;
online shopper, consistent competitor SKUs) through search price and promotion strategy and Scale and leverage CRM
off-platform digital marketing & shopper marketing finding the right details of product marketing to re-target shoppers
(vs alternative or competitor SKUs) and grow overall penetration
Conversion/
Traffic generation Conversion
Traffic generation
What now for businesses? 77
2. Rewire your
business model
Disruptions to business models are happening 360 Ask yourself these questions:
degrees in every arena, and we don’t expect that to
change. Instead of waiting for a moment of stability
to make plans, brands should look at how they 1. How is my ecosystem likely to 6. Does my organisation have the
can adapt now—and how they can plan for future evolve? necessary skill sets for the future?
disruptions. The best way to tackle this is to start
2. What are the emerging consumer 7. What role are the regulators likely
with a “Future Back” approach.
cohorts that will shape the to play in my industry?
industry?
8. What partnerships do I need to
3. Who are the competitors of forge for asset-lite scaling?
tomorrow, especially those
9. How will data, automation and
that don’t exist today or are my
machine learning likely influence
partners now but may turn into
my value chain?
“frenemies” as they eat into my
profits? 10. How do sustainability and better
corporate responsibility influence
4. Is my route to market geared to a
my future performance?
world where online B2C and B2B
will exponentially grow?
5. Re-envision the
role of sustainability
Ensure that your brand has adequate environmental, Pricing up for sustainability: 4 ways to make it work
social and governance (ESG)-focused options on
your product range and proposition. Transforming
the supply chain to improve sustainability is possible
without compromising on cost efficiencies.
Price below Price straight to
elasticity barriers sustainability
Remember, your consumers are willing to bankroll
your environmentally and socially friendly practices. Modest increase with Price increase passed on
Make your sustainable practices explicit to capture a continuous improvements to farmers, ecosystems
brand switch from Southeast Asian consumers. in value proposition
6. Realign to the
post-pandemic
hybrid lifestyle
Although the “new normal” is still taking shape,
flexible working arrangements are here to stay,
paving the way for fewer daily commutes, less in-
person time at the office and a more home-centric
lifestyle. Consumers want shopping options that keep
them closer to home, especially in Southeast Asian
countries with challenging transportation issues.
Digital consumers
are ready for you
to accelerate
Digital growth found a new home in
Southeast Asia. The home-centric lifestyle
With 70 million new digital consumers
in Southeast Asia since the beginning
The moment has
is here to stay, digital lifestyles have
accelerated, daily routines have been
of the pandemic, brands can’t afford to
underestimate this market. The durable
arrived for brands
transformed. We saw that today’s digital
consumers aim to discover, explore their
digital-centric habits that consumers
established in 2020 create a new consumer
to take advantage
choices and embrace the online path to profile that you can use to anchor your of Southeast Asia’s
purchase. They seek value and quality, but business plans moving forward.
now also sustainable and conscious choices. paradigm shift in
consumer behaviour.
These “Six Rs”—rewrite, rewire, reimagine,
Southeast Asia has jumped to the top of refresh, re-envision, and realign—along with
the Asia-Pacific priority list for brands the insights we’ve presented in this report,
marketing and selling in the ecommerce define the path that brands owners and
space—and for those that are ready to
jump into the market. The durable digital
chief marketing officers need to take at this
pivotal moment to capitalise on the growth
Get ready to engage
consumer trends that have emerged from
the pandemic pave the way for action.
of Southeast Asia.
with the consumers
of the digital age.
Data compiled from Passport - Economies and Consumers Annual Data 2018 to 2026F by Euromonitor; Forrester ForecastView, Forrester Analytics:
Online Retail Forecast, 2019 to 2026F (Asia-Pacific, China, India, Southeast Asia, USA) by Forrester Research; Digital 2021 (Indonesia, Malaysia, the
Philippines, Singapore, Thailand, and Vietnam) by Hootsuite, Jan 2021; Riding the Digital Wave: Capturing Southeast Asia’s Digital Consumer in the
Discovery Generation by Bain & Company (Facebook-commissioned survey of 12,965 respondents from ID, MY, PH, SG, TH, VN), Jun 2019.
82
What now for businesses?
Top takeaways
5 Home-centric lifestyles to
persist beyond the pandemic 6 Investments fuel fintech,
e-learning, ecommerce and
other digital disruptors in
the region
Meet the experts from the report