THE E-COMMERCE MARKET is projected to grow to $5–6 billion within five years from the $1 billion in 2019, after having gained momentum during the current pandemic, a partner with Ernst & Young (EY) Singapore said.
Olivier Gergele said in a webinar with the Philippine Retailers Association on Monday that e-commerce growth will accelerate after the weakening of traditional retail channels due to the coronavirus disease 2019 (COVID-19) outbreak.
“We expect e-commerce online penetration (in ASEAN) to grow three to four times to anywhere between $90 billion to $120 billion in the next five years,” he added.
Indonesia’s e-commerce industry is expected to grow to $42–56 billion by 2025 from $13.3 billion in 2019, while Thailand’s industry is expected to grow to $16–21 billion from $5 billion.
Mr. Gergele said there are also some constraints in terms of back-end operations, including limits in supplies of items for purchase.
“Moving forward, as players are able to overcome and practically anticipate the exponential growth, the exponential demand, we can really expect online penetration to see a significant boost.”
Offline retailers in the Philippines, he said, saw a 20–40% decline in foot traffic in February and March.
“In the Philippines, some retailers have been grappling with early losses of up to 80% in the past month. The sector really requires significant intervention… to survive.”
He said he expects the roll out of alternative business models to accelerate across Southeast Asia, including “dark kitchens” or food prepared for take out rather than for restaurant dining as well as digital community platforms.
Mr. Gergele said that the online ecosystem in ASEAN is expected to be profitable in two to three years, shortening timeline for e-commerce companies, which is usually four to ten years.