Despite the ongoing impact of COVID-19, businesses across Southeast Asia have expressed their optimism about growth and recovery prospects in digital commerce, according to a new survey conducted by Lazada Group.
The newly released Digital Commerce Confidence Index is an industry-first bi-annual report that explores the views, prospects and challenges of online sellers in Southeast Asia. According to the inaugural index, of the 750 merchants surveyed during the first half of 2021 from Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, 70% expected their business to expand by more than 10% in the third quarter of the year. Of these sellers, 33% said they were extremely confident that their sales volume would increase by more than 30%, reflecting their favourable sentiments towards the opportunities presented through digital commerce. Overall, on a spectrum from 0 to 100, the index achieved a score of 64, reflecting the optimism of business owners across the region.
While the economic effects of the pandemic continue to ripple across the world, the positive outlook of online sellers captured in the report point to the explosive growth of digital commerce and its role in helping businesses not only survive but thrive during challenging times. According to the index study, 52% of those surveyed experienced high-level business growth during the first half of 2021, as more consumers moved to shopping online from their homes.
Online sellers from the electronics and fast-moving consumer goods categories benefited the most from this boom in the stay-at-home economy, with 53% of surveyed merchants reporting strong business performance in the first six months of the year.
Growth momentum was also recorded across all other retail categories, fuelled in large part by sellers’ increased leveraging of technology and digital solutions, such as online shopping festivals and livestreaming, to overcome offline disruptions and continue connecting with consumers. The enhanced engagement capabilities of online shopping have in turn boosted sellers’ business confidence, especially among those in fashion – a segment that has long relied on the touch-and-feel interactions of offline retail but has increasingly embraced digital engagement tools with great success. While 48% of merchants in this sector said their businesses grew during the first half of 2021, 75% anticipated business improvement in the third quarter of 2021, with close to 40% predicting the growth to exceed 30%.
To best capture new opportunities in digital commerce, sellers highlighted the importance of developing unique and differentiated offerings, leverage technology to drive more user traffic, and to harness data insights effectively. To win in an increasingly competitive online environment, sellers will need to differentiate themselves by delivering greater value and enhanced experiences to consumers by leveraging technology to engage shoppers.
“We are excited to launch the Digital Commerce Confidence Index, aiming to shed more light on forward-looking indicators and sentiment among SMEs in Southeast Asia,” said Magnus Ekbom, Lazada Group’s chief strategy officer. “Many SMEs have embraced new technology and acquired digital capabilities to transform and future-proof their businesses. Despite the challenging health situation and ongoing challenges, our index shows that sellers remain both resilient and optimistic about the future.”
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