Retail e-commerce is a unique opportunity to connect millions of merchants and consumers across the ASEAN region. To secure future growth, however, further intervention is needed. This report examines a holistic approach that can help the region unleash the full potential of e-commerce. 

Lifting the Barriers to E-Commerce in ASEAN

Enabling e-commerce is a unique way to contribute to economic integration across Southeast Asia. 

With the Association of Southeast Asian Nations (ASEAN) Economic Community set to come into effect by the end of 2015, retail e-commerce offers a unique opportunity to connect millions of merchants and consumers across the region.

Today, e-commerce remains relatively underdeveloped in Southeast Asia, accounting for less than 1 percent of total retail sales, compared to rates of 6 to 8 percent in Europe, China, and the United States. In the coming years, as purchasing power increases, Internet penetration spreads, and online offerings improve, online retail in ASEAN markets could grow as much as 25 percent annually.

To spur this growth, some initiatives have already been launched across the region, but further interventions are required to ensure future growth. The Lifting-the-Barriers roundtable at the ASEAN Business Club Forum, held in September 2014 in Singapore, highlighted five specific actions that ASEAN countries should consider to take e-commerce to the next level.

  1. Increase broadband access: Using state-aid funding where private investment is not sufficient, enhancing cross-border connectivity, and increasing efforts to raise online awareness.
  2. Support the emergence of local players: Improving access to finance for small and medium enterprises, fostering the integration of digital talent into businesses, and promoting awareness of e-commerce marketplaces.
  3. Reinforce online security: Increasing information sharing and bilateral assistance, harmonizing existing legislative frameworks, and creating a regional online dispute-resolution facility.
  4. Promote e-payment: Encouraging non-cash transactions, establishing e-payment-specific regulations, and harmonizing e-payment regulations regionally.
  5. Improve logistics and trade efficiency: Encouraging the development of online retail logistics services, facilitating e-retailers and logistics players’ partnerships, accelerating the integration of logistics systems, and ensuring full implementation of the ASEAN Single Window.

A holistic approach that encompasses the five actions above would allow the region to unleash the full potential of e-commerce.

This report provides a structured understanding of the main barriers that limit retail e-commerce growth in ASEAN while providing guidance on the way forward. It specifically shares an overview of retail e-commerce across the ASEAN 6—the six major ASEAN economies: Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam—and suggests how to lift the barriers to unlock the region’s full e-commerce potential.

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