The Boom of E-commerce and Credit Cards in Southeast Asia

by Melissa W. Content Writer

A Nascent Industry:

There is no doubt about it: Southeast Asia’s e-commerce potential is staggering!

Entrepreneurs are finding amazing opportunities as big as sky bars in Bangkok…

In this article, we are going to analyze this exciting opportunity. Furthermore, we will also see how it will help the credit card industry to grow.

The Boost Credit Cards Need:

According to UmayPlus, there is a correlation between the boom of e-commerce in Thailand and the increase in credit card adoption in the country, because more people are using them to buy online.

Let’s take a look into the current situation of the country:

· 78% of adults have a bank account

· 55% have a debit card

· Credit card transactions are conducted at a rate of 3.70%, which is still incredibly low.

However, with the rise of e-commerce purchases, it is expected that it will stimulate the growth of credit card transactions to new heights.

A Growing and Promising Market:

According to this report titled “Lifting the Barriers to E-Commerce in ASEAN”, the market has a future potential of $89 billion dollars.

This alone is more than enough to understand the big opportunity for entrepreneurs, especially when the competition is still low, especially in comparison to western countries.

However… there are still some challenges that they will have to surpass.

The Reality of C2C Commerce:

Did you know that most of it takes places in social networks and is highly unregulated and informal?

As of now, many people in Southeast Asia do C2C commerce through social media platforms, and thereby they don’t pay taxes and more importantly, they concrete their sales with cash.

This is something that many reports don’t point out, but it is important to do it, in order to have a real overview of this situation.

Therefore, in order for companies and entrepreneurs to succeed in this new terrain, they will have to disrupt this current scheme and get people to buy like other people in other countries do.

Why does this happen? It is simple: a large part of popular in Southeast Asia are unbanked or underbanked. Therefore, many of these activities are held in an unregulated way, and this is one of the barriers that companies will have to take down in order for e-commerce to truly flourish in this region.

Estimates for 2025: A Look in to the Future

Let’s a look to the following facts and predictions for the most important countries in this region:

	Thailand	Indonesia	Singapore
Population	72 million	294 million	6.8 million
e-commerce GMV	$11.1 billion USD	$156.6 billion USD	$5.4 billion USD
e-commerce % of total retail	5.5%	8%	6.7%
e-commerce GMV per capita	$155	$157	$789

There is one aspect that indicates the amazing opportunity for the expansion of e-com: the penetration is still very low.

If we compare it against China (25%) and the USA (14%), we can see that there is still room for growth.

Thailand: A Prosperous Country for E-commerce

This is one of the most promising countries in the region, and it is because it has the possibility to evolve just like China did in this industry.

Back in 2006, the e-com GMV per capita in China was barely 4$, and in 2016 it reached $509.

In 2016, Thailand had an e-come GMV per capita of $17 and for 2025 it is expected to reach $155. That would be an incredible x9 change!

In all depends on how companies conduct their operations in the country.

Conclusion:

E-commerce is here to stay and none can doubt it. There are barriers to take down, but once they fall, this industry will prosper rapidly and vigorously!