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Singapore has supremacy in the state of e-commerce in Southeast Asia

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Picture Credit: iPrice

Malaysia is on par with Singapore with 74% share of mobile traffic and though Malaysia saw a steady increase from the past year, Singapore remains supreme in the state of eCommerce in the region.

The Southeast Asian eCommerce scene is a mobile-first economy, leapfrogging all the Western economies when it comes to the importance of mobile commerce in the traffic generated by each eCommerce operator.

Singapore supremacy in basket size

The basket size results is to be closely correlated to the GDP per capita of each country.
Singapore has the highest GDP per capita ($90,530) while Vietnam has the lowest GDP per capita ($6,880).

Relatively, Singapore’s merchants score highest with a basket size of $91, 3.7x higher than their Vietnamese counterparts, with an average basket size of $23.

Basket size is another key metric for any eCommerce operator, heavily impacting the unit economics profitability of the business.

The metric measures the average total amount spent for every order made by customer over
a defined period of time.

The basket size is structurally different among verticals and the market positioning of each merchant.

“Our large sample of merchants from a variety of verticals mitigates such factors, thus making the basket size comparison among countries particularly interesting,” said iPrice in a presentation today.

It said 2017 has been a vital year for eCommerce in Southeast Asia, with Gross Merchandise Value (GMV) of first-hand goods surpassing $10B, up from $5.5B in 2015, with a stunning 41% Compound Annual Growth Rate (CAGR) over the past couple of years, as per Google-Temasek’s eConomy SEA Spotlight 2017 report.

Among other major events, 2017 in SEA eCommerce has seen Amazon’s long awaited entrance in one of SEA’s market, the fast rise of Shopee’s Mobile-First platform, the $250M record-breaking Sales by Lazada’s Online Revolution Campaign and the increasing capital deployed by Chinese’s bitter enemies Alibaba and Tencent, in an attempt to ‘win’ the market.

Behind these title-grabbing events and industry-shaping investments, there are thousands of eCommerce players of all shapes and sizes, operating across the region in very different market conditions.

“Our aim, with the 2017 State of eCommerce report, is to shed light on some of the most important eCommerce metrics from the perspective of these thousands eCommerce operators, highlighting the differences and similarities among each markets.

“Our research leverages iPrice’s proprietary data from over 1,000 eCommerce players operating in the 6 largest Southeast Asian markets (Indonesia, Malaysia, Singapore, Thailand, Philippines and Vietnam),” iPrice said.

Singapore second highest conversion rate

Using the average conversion rate in SEA as a reference (1x), Vietnam merchants are leading the way, with a conversion rate 30% higher than the average.

Singapore displays the second highest conversion rate, closely tied with Indonesia.
The data shows the low level of correlation between conversion rate and the level of maturity of each eCommerce market.

COD and bank transfer to the rescue
Which payment solutions are merchants offering to their consumers to complete their purchases, in each of SEA’s country?

Due to low credit card penetration in the region (with the exception of Singapore), eCommerce players in Southeast Asia have had to face unique challenges, unbeknownst to the western ecommerce markets.

As a consequence of this structural shortcoming, a much more diverse range of payment solutions have proliferated in the region. Each country displays very different patterns, which highlights the challenges that merchants face when expanding regionally with a one-size fits all approach

Singaporeans enjoy evening shopping
The percentage varies wildly across SEA, with Cash on Delivery being offered by more than 80% of merchants in Vietnam and Philippines, and less than 20% in Singapore and Malaysia

Considering the average number of order of the local country as reference (100%), the number of orders is highest between 9am and 5pm, when people are traditionally at work or school, with the exception of Singaporeans, who seem to enjoy evening shopping more than other countries, peaking at 10pm.

Consistently across countries, there is a dip between 5pm and 7pm, were people typically commute and have dinner, before getting back into online shopping until 11pm.

View the full report here:

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