Full potential of ASEAN E-commerce market

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AT Kearney - ToolsHero

ATKearney posted a nice news article about the full potential of ASEAN (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) E-Commerce Market.

Introduction

According to the study Lifting the Barriers to E-Commerce in ASEAN, the online retail market in ASEAN 6 has the potential to grow 25 percent annually through 2017.

Geir Olsen, head of ATKearney Consumer Industries and Retail Practice in APAC, said that the ASEAN 6 accounts for less than 1 percent of global online retail is, even though it has 3 to 4 percent of global GDP and around 8 percent of the population.

Regarding the considerable growth potential for the ASEAN e-commerce market, he sees five significant challenges to realize the potential growth. This is a short summary of distinct actions the region can take to surmount each challenge

Increase broadband access

Online users are just 29 percent of the ASEAN 6 population, compared to 46 percent in China and more than 90 percent in Japan. In Vietnam, the Philippines, Thailand, and Indonesia, about or less than half of the population uses the Internet; only Singapore’s access to fixed broadband compares to markets such as the United States.

Support local offers

In order to encourage local companies to participate in the online-trend, access to finance needs to be improved, the integration of digital talent needs to be fostered and the awareness of e-commerce marketplaces needs to be promoted.

Reinforce online security

The region would benefit greatly from shared cybersecurity and regulatory best practices and coordinated legislative frameworks. Creating an online dispute resolution facility would help the region as well.

Promote e-payment

The vast majority of payments for online retail are still made off-line, with methods such as cash-on-delivery. By promoting non-cash transactions and instituting e-payment regulations that are coordinated region-wide.

Improve logistics and trade efficiency

Logistics and trade often do not match online shoppers’ expectations in the region. The benefits of e-commerce development go beyond direct economic impact. Retail e-commerce can be a vehicle for economic development, social cohesion, and cultural exchanges contributing to regional integration.

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