E Commerce Businesses Must Rethink Ways To Leverage Asean Market

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From Jaziri Alkaf Abdillah Suffian
Both retail and e-commerce have been undergoing massive changes, driven by advancements in technology and evolving consumer purchasing trends.
With higher internet penetration, the rise of the middle class, and increased inter-regional travel and migration, brands can no longer focus on a single country. Instead, they must view regional markets, specifically Asean, as a single interrelated marketplace.
The Asean region has seen substantial growth in e-commerce. According to a Statista Market report, revenue in the e-commerce market is projected to reach US$137.20 billion by 2025. With an expected annual growth rate of 8.6% from 2025 to 2029, the market volume is projected to reach US$191 billion by 2029.
By 2029, user penetration is expected to reach 40%. Additionally, the average revenue per user (ARPU) is expected to be around US$716.60.
Retail sales across the Asean region are also forecasted to increase dramatically, with total retail sales expected to reach over US$2.35 billion by 2025. This significant growth underscores the increasing importance of digital marketplaces and highlights the need for businesses to adapt to this dynamic environment.
Asean countries share many cultural and economic similarities, which contribute to a unified marketplace. The presence of similar marketplace providers such as Shopee, Lazada, TikTok, Grab and Temu facilitates consumer access to products and services across the region.
The high number of travellers and migrants within Asean ensures that consumers expect to access similar products and services available back home or experienced during their regional travels.
This interconnectedness leads to a demand for familiar brands and products, creating a seamless consumer experience across borders.
In Malaysia, we have observed the rise of many regional brands expanding across borders. Food and beverage players like Kopi Kenangan, Richeese Factory and Bencoolen Coffee, along with lifestyle brands like Eiger Adventure and Buttonscraves, have successfully entered the Malaysian market.
For example, Eiger Adventure opened three outlets, including a flagship store, in less than 10 months, while Buttonscarves opened six outlets, with the latest in KLCC. Richeese Factory has established 70 outlets in Malaysia.
These examples highlight the increasing trend of cross-border brand expansion, driven by consumer demand for diverse and accessible products. The successful entry of these brands into the Malaysian market demonstrates the potential for businesses to thrive by tapping into the regional market.
This trend is not limited to Malaysia but extends to other Asean countries, where regional brands are increasingly becoming household names.
The rise of cross-border brand expansion is also supported by favourable government policies and regional agreements. For instance, the Asean Economic Community (AEC) aims to create a single market and production base, allowing for the free flow of goods, services, investment, skilled labour and capital.
This regional integration provides a conducive environment for businesses to expand beyond their home countries and tap into a larger market. Additionally, the AEC promotes regulatory harmonisation and the removal of trade barriers, making it easier for businesses to operate across borders.
Moreover, the rapid adoption of digital technologies has played a crucial role in facilitating cross-border trade. E-commerce platforms, social media and digital marketing enable businesses to reach a wider audience and engage with consumers in different countries.
These digital tools provide businesses with valuable insights into consumer preferences and behaviour, allowing them to tailor their products and services to meet the needs of different markets.
For instance, businesses can use data analytics to identify trends and preferences in specific countries, enabling them to develop targeted marketing strategies and optimise their supply chain operations.
Given these trends, we need to rethink retail and e-commerce on a regional scale. Single-country dominance is under threat, and fast adopters of cross-border trade will be able to leverage Asean’s economic scale and cultural similarities.
Embracing change and adopting a regional perspective, brands can capitalise on the growth opportunities presented by the dynamic Asean marketplace, ensuring their relevance and competitiveness in the future.
Businesses must be agile and adaptable to navigate the complexities of operating in multiple markets. This requires a deep understanding of local cultures, regulations and consumer behaviour, as well as the ability to innovate and respond to changing market conditions.
The transformation of retail and e-commerce in Asean is driven by technological advancements, changing consumer behaviour and regional integration. Businesses must recognise the interconnected nature of the Asean market and adopt a regional approach to remain competitive.
Leveraging the opportunities presented by cross-border trade and digital technologies, businesses can thrive in this dynamic marketplace and contribute to the region’s economic growth. As Asean continues to evolve, businesses that embrace change and innovation will be well-positioned to succeed in the future. - FMT
Jaziri Alkaf Abdillah Suffian is a former senator and the Indonesia-Malaysia Business Council’s international affairs director.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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