Based on 750 online sellers surveyed by Lazada across six market in Southeast Asia (Indonesia, Philippines, Thailand, Vietnam, Malaysia, and Singapore) in the first half of 2021, the first-ever digital commerce Confidence Index showed 52% of sellers experienced a high level of growth, with 70% expecting to grow their business by 10% in the third quarter of 2021.
Out of the 70%, a third (33%) of sellers surveyed were extremely confident that their sales volume would increase by more than 30% in the same time period. As a result, the overall index achieved an “optimistic” score of 64, with 0 being “very pessimistic” and 100 being “very optimistic” on the spectrum.
A key driver of sellers’ positive sentiment could be attributed to significant shifts in Southeast Asian consumers’ consumption habits with greater diversification between online and offline purchases. With 47% of consumers reducing their offline purchases and 30% increasing their online spending in 2020, the COVID-19 pandemic has accelerated the expansion of digital commerce and made it a pivotal battleground for sellers looking to scale up their businesses.
While strong growth momentum was generally recorded across all retail categories, sellers from the electronics and fast-moving consumer goods (FMCG) categories appeared to be the biggest beneficiaries of a stay-at-home economy, with 53% reporting that their business recorded strong growth in the first half of 2021.
The Confidence Index report also uncovered interesting variations in how sellers felt about the future. Sellers from the fashion segment showed the highest optimism. While 48% said their businesses improved in the first half of the year, 75% shared that they expect business to improve in the third quarter of 2021, and almost 40% of them anticipated that their growth would exceed 30% in the same quarter.
Developing a unique and differentiated offering (52%), driving more user traffic (50%), and the ability to harness data insights (23%) were identified by sellers in the survey as key enablers of online business growth. In a highly saturated environment, competition among online sellers no longer occurs under a simplistic framework of price wars but has evolved to take on an additional dimension where technology driven customer engagement serves as a differentiating factor for many sellers.