A recent report by Singapore-based venture firm Momentum Works has revealed that Indonesia is the driving force behind Southeast Asia’s e-commerce revolution. The study found that Indonesia contributed a staggering 52% to the region’s total gross merchandise value (GMV), representing the value of goods sold through e-commerce platforms. The data was collected from six Southeast Asian countries, including Malaysia, the Philippines, Singapore, Thailand, and Vietnam. In 2022, the total GMV for the region reached a remarkable US$99.5 billion.
When comparing individual countries, Indonesia’s GMV figure of US$51.9 billion stands out, almost 13 times higher than Singapore’s US$4 billion. Momentum Works conducted extensive research for the report, utilizing a variety of methods such as analyzing publicly available data and gathering insights from industry contacts within the e-commerce sector.
The report highlighted the most commonly used e-commerce platforms in Indonesia. Shopee, an e-commerce app, and Tokopedia, an online marketplace, dominated the market with 36% and 35% of the country’s GMV, respectively. Lazada and Bukalapak followed closely behind, both holding a 10% share, while TikTok Shop, the e-commerce affiliate of the popular video-sharing app, accounted for 5%, and Blibli for 4%.
This report is the first installment of Momentum Works’ E-commerce in Southeast Asia series. The findings indicated a significant growth in the region’s GMV, which totaled US$99.5 billion in 2022, surpassing the figures of US$87.1 billion in 2021 and US$54.8 billion in 2020. However, the rate of growth in online spending from 2021 to 2022 was lower than the previous year, with growth falling from 58.9% to 14.2% .
As the world gradually reopened after the COVID-19 pandemic, the resumption of retail shopping had an impact on the frequency of online purchases across the region. Factors such as inflation, rising interest rates, and commodity price hikes also affected consumer spending power and compelled many platforms in the region to cut marketing and operational investments. Despite these challenges, the report remains optimistic about the future of e-commerce, highlighting the impressive growth of firms like TikTok and Lazada, who continue to make significant gains in GMV.
The report predicts that e-commerce will continue to grow at a healthier pace, aligned with the region’s pace of consumer income growth, infrastructure development, and the progress of fulfillment capacity and capabilities. Examining specific companies, the report identified Shopee as the largest e-commerce player in Southeast Asia, with a staggering GMV of US$47.9 billion in 2022, accounting for almost half of the total GMV. Other major players include Lazada with US$20.1 billion, Tokopedia with US$18.4 billion, and TikTok Shop with US$4.4 billion.
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The report also acknowledged the efforts of TikTok Shop and its parent company, ByteDance, to expand into the Southeast Asian market. TikTok Shop is reportedly aiming to more than triple its regional GMV; however, the report notes that the achievement of this target remains uncertain. In 2022, TikTok’s GMV in Southeast Asia grew from US$600 million to US$4.4 billion, a significant increase of US$3.8 billion. In comparison, Tokopedia’s GMV increased by only US$2.9 billion, while Lazada’s numbers fell by US$900 million.
The report concludes by emphasizing that while TikTok offers a differentiated experience compared to traditional e-commerce platforms in the region, it remains to be seen whether the platform can establish itself as a mainstay of e-commerce in Southeast Asia, considering the region’s mature e-commerce content ecosystem.
In conclusion, Indonesia’s dominant position in Southeast Asia’s e-commerce landscape is evident, contributing more than half of the region’s total GMV. The Momentum Works report provides valuable insights into the growth, challenges, and future prospects of the e-commerce industry in the region.
This report is based on an interview conducted by Fibre2Fashion.
