According to the Bain & Company report, Thailand, Malaysia, Indonesia, Vietnam, Philippines, and Singapore are the fastest growing digital markets due to accelerated smartphone utilization, technology adaption, and urbanization. Moreover, an estimated 70 million people shop online, and it's projected that online spending will roughly double by 2025 in this region, reaching $362 billion.
While the eCommerce industry in Southeast Asia has ballooned in the past year, most of that growth had been targeted towards urban consumers. The opportunities lie in serving the emerging consumer populations residing in second and third-tier metropolitan cities. Here are the top selling products that southeast Asian businesses must capitalize on an early basis.
Ecommerce Industry In Southeast Asia
This region is home to 350 million online shoppers, with online shopping expected to grow by 60% per person, pushing eCommerce sales to expand two-fold to $254 million GMV.
Many parts of the Southeast Asian region are still grappling with a resurgence of Covid. As governments encourage people to stay home to reduce the spread of Coronavirus, Southeast Asia has seen rapid adoption of digitalization, online payments, and eCommerce.
After the lockdowns, closure of physical stores, changing consumer preferences, shift in shopping patterns, and innovative online platforms, eCommerce took a turn for good, and it is more likely to continue.
As the pandemic progresses, it speeds up the digital transition and accelerates the expansion of digital commerce. Now consumers have access to a massive variety of products from the convenience and safety of their homes. On the contrary, retailers scramble to strengthen their online platforms to maximize the impact of social distancing and online shopping.
The Next Big Battleground
Nearly 80% of the online shoppers in Southeast Asia have inclined towards online shopping, and if you are planning to enter the eCommerce industry or already own an online store, you would have been witnessing the economic fluctuations and competition.
On the face of it, Southeast Asia seems like an eCommerce wonderland. No place on the earth matches this region's digital adoption capabilities. Consumers now have access to millions of products where the e-commerce market is quite fragmented with the presence of numerous regional and international players.
All this has resulted in an overflowing of businesses and brands, all competing for the same customer share. Undeniably, eCommerce in the Southeast Asian region faces a host of challenges from market fragmentation, fierce competition, online payment methods, and implications of digitalization.
Suppose you plan to enter the Southeast Asian online market to take advantage of the immense monetization opportunities. In that case, online business owners must not be tempted; instead, take time out to do proper planning, research, and homework. New emerging businesses are disrupting the online market space; hence, businesses must keep an eye on the latest trends and evaluate top selling products. This allows them to ensure their investment and a steady rate of return.
Here is the list of top selling product categories in Southeast Asia:
Top Selling Products In Southeast Asia
Undeniably, the competition on the eCommerce front in Southeast Asia will be fierce in 2022. Merchants need to keep pace with the changing dynamics of trending products in order to stay ahead of the competition.
Trends are fantastic and help the new merchants identify changing consumer preferences and the potential for growth. After all, knowing what consumers want keeps you ahead of competitors.
A comprehensive breakdown of what products are currently trending in Southeast Asia regions reveals the best products to make your investment and save time.
Let's take a closer look at the most trending products of 2022 in the Southeast Asia region.
The health product industry in Southeast Asia is well-positioned and growing as consumers continue to stockpile on necessities, over-the-counter drugs, and immune boosting supplements.
Southeast Asia has approx. 600 million population or 9% of the world's population, and due to the increasing spread of Coronavirus, people have become more conscious. Deaths from infectious and transferrable diseases have also resulted in upsurged demand for health products.
The total retail sales in the Southeast Asia of consumer health products grew by 3%, where health conscious consumers gravitate to health improving products.
These health-related products include:
- Vitamins and dietary supplements
- Herbal medicines
- Dietary supplements
- Wellness products
Gadgets And Widgets
Southeast Asian love for electronic gadgets is quite evident, especially the millennials. For tech in Southeast Asia, millennials have come to the age of urbanization, globalization, and technological advancements. Undeniably, we are witnessing a digital generation that is inclined towards smartphones and other gadgets.
Moreover, a dramatic uptick in the number of work-from-home workers has led to more demand for advanced telecommunication devices. According to a report, 31% are early adopters of technology, and hence, electronic gadgets have lured a large audience.
These electronic smart gadgets include:
- Automated solutions
- Entertainment devices (headphones, wireless pods, cameras, speakers)
- Common digital devices (smartphones, laptops)
- Cool computer devices
- Power banks
Mom and baby products
The high birth rate of 16.78 births per 1000 people is kind of responsible for the growth of baby products. for new parents, there is a whole new arena of purchase considerations before even the babies are born. Additionally, retailers identified this opportunity and started servicing the growing mom demographic region.
Southeast Asia recorded 280 million USD, with mom juggling full-time jobs and household chores, they are looking for convenience. Some of these products are:
- Instant formula
- Baby care products
- Maternity products
- Baby food
- Baby wraps
Fashion Forward Products
According to the HKTDC research, fashion apparel is a key product category that is majorly purchased by Southeast Asians. Moreover, these account for more than half of the entire region's e-commerce GMV (Gross Merchandise Value).
Revenue in the fashion segment will reach more than $21 million and shows an annual growth rate of 12.26%, according to Statista. Moreover, it also demonstrated that user penetration is 29% and is expected to reach 36% by 2025.
Without a doubt, Southeast Asia is the fastest growing apparel retailer in the world. With the above evidence, it is clear that there has been significant integration of beauty and fashion products among the population.
Despite the effects of the pandemic, the local fashion industry is all set to make a stunning comeback, thanks to the rapid shift towards digitalization. Ecommerce is a key revenue driver for fashion and beauty brands.
- Protective masks
- Athleisure and fitness accessories
Certainly, merchants have been eyeing the beauty and skincare products in Southeast Asia for a while now. The beauty industry is among the leading development in Southeast Asia, thanks to a system pairing structural local industry and appeal of skincare brands.
Beauty, skincare, and hair care products deliver the best performance, and it's expected to be US$ 25 billion. Moreover, according to the same report, the market is expected to grow annually by 5.3% CAGR by 2023, where 74% of sales contribute to cosmetics and 26% to luxury items.
Southeast Asian e-commerce is fueled by the demand for skincare and makeup products. being the driving force in creating trends for the future, merchants can now easily make the right decision:
- Skincare products
- Makeup products (lipsticks, foundations)
- Cosmetic products
- Halal cosmetics
- Electric personal products (hairdryers)
- Organic and natural products
Home Lifestyle Products
The fast-changing consumer preferences and powerful online shopping forces have shaped the home lifestyle sector in Southeast Asia. The lifestyle and decor market are expected to reach USD 55 million by the end of 2024. It also records a thriving CAGR of 2.4%, highlighting the increasing demand for décor products.
The home and lifestyle brands carefully curate diverse products meeting consumers' varying hobbies and interests.
- Wall arts
- Home accessories
Undeniably, hundreds of millions of consumers across Southeast Asia prefer online shopping. Especially with the figures highlighted above, eCommerce in the Southeast Asia region definitely looks promising.
But, there's no one blueprint for success. This is an incredibly dynamic, diverse, and vibrant region - it's absolutely not a homogenous market. To be successful, you firstly need to understand the online shopping landscape and know what brings the local audiences to digital markets.
Undoubtedly, numerous local and internal players have overcrowded the eCommerce industry. Still, there is plenty of room for growth. It will continue to grow, offering a wide variety of sustained and diverse growth opportunities.
At the end of the day, companies are fighting over the same customers and same market share. Certainly, some retailers are winning the greatest percentage of growing e-commerce spending. Hence, it's essential for eCommerce business owners to understand product popularity and online shopping trends before entering the competitive digital world.
To make it easier for all the new merchants, we have compiled a list of top selling product categories. We've got even more tricks up our sleeves, so get in touch with us at Zaapi if you want to gain an advantage over other online retailers in Thailand.