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Top Trends in Cross-Border E-commerce in Southeast Asia

Highlighting the current scenario, challenges, driving factors, and trends that top the list for the market of Cross-border E-commerce in Southeast Asia.

Team Hopstack
October 20, 2023

In this blog

Cross-border e-commerce is the future of the global market. The increasing convenience in logistics has made buying or selling overseas as a feasible and fascinating option for people across the world. Southeast Asia, the hot cake of global e-commerce merchandise, has attracted this overseas trading concept with almost 40% of the acquired market share. As per Frost & Sullivan's report, the CAGR rate of ASEAN Big 6 countries (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) was projected at 36.7% from 2013 to 2018, growing from $7B to $34.5B. This owes to multiple factors like bilateral and free trade agreements amongst Southeast Asian countries, mobile commerce, etc. Further in this article, we explore and discuss the cross-border e-commerce market trends in Southeast Asia.

Brief on cross-border E-commerce in Southeast Asia

Southeast Asians have showcased a major interest in cross-border trading. Following are some interesting facts about Southeast Asian countries on the cross-border e-commerce market.

  • Singapore and Malaysia account for about 50% of the cross-border e-commerce market in the whole bunch of Southeast Asia.
  • Thailand is undergoing huge growth in the e-commerce market. The Thailand 4.0 policy is designed to foster internet connectivity in each village of the country.
  • Vietnam and Philippines showcased huge cross-border potential by bringing more innovative and niche products into the market.
  • Indonesia's imported e-commerce parcels hiked from 6.1M packages to 49.7M in 2019 - a massive growth of 814%, owing to which the government exempted shipment costs from $75 to $3 per shipment.

Why cross-border E-commerce in Southeast Asia?

The demand of customers and the viability of sourcing products or services by the manufacturers have been the prime reasons for budding cross-border e-commerce. Also, Southeast Asia has witnessed the highest population growth which has more income and handy tech in their pockets with better internet connectivity; the region has more active users than USA or Japan, thereby laying a pathway to competitive e-commerce. In parallel, factors like the eye for better quality at a competitive cost, the unavailability of products in the domestic market, are also key reasons for the growing popularity of cross-border e-commerce trading.

The manufacturers take these factors as an opportunity to tap more geographies, especially South East Asia to broaden the overall clientele base for their business sales. In addition, the ASEAN countries (like Singapore, Malaysia, Thailand, and Vietnam) have a mutual contract to promote socio-cultural and economic development prospects amongst themselves. Thereby, welcoming cross-border e-commerce with both hands.

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Challenges in Cross-border E-commerce

Modern e-commerce has come with its own set of challenges; and trading overseas, in varying legislation bodies, requires fine details and a systematic approach to ensure profits. Certain challenges faced in the cross-border e-commerce scenario are discussed below.

  1. Currency Variations

Different countries usually have their own currencies. The primary challenge for sellers is to ensure that their product prices are displayed in local figures. The second challenge is to ensure the backend process of currency conversions, transacts, and taxes while adhering to the trading laws of both countries. 

  1. Payment Methods & Modes

The consumer market is pampered with a variety of payment methods like Credit Card, Debit Card, Mobile Wallet, Online Banking, Cash on Delivery, Bank Transfer, UPI, etc. Therefore, people expect the same convenience in cross-border shopping as well. It becomes mandatory to have necessary tie-ups to enable all different payment options. Similarly, innovative payment modes like BOPIS (Buy nOw Pay In Store), BNPL (Buy Now Pay Later) are also attractive and expected which need to be taken care of in cross-currency situations for cross-border e-commerce.

  1. Tax & Duties

A lot of statutory payments add to the product cost before it reaches the customer from a manufacturer. The companies precisely calculate excise and national taxes, and now also have to consider import-export duties, customs clearance and other statutory payments involved before disclosing the final price to the customers. Cost calculation based on all the legal norms involved becomes the key factor for profits and minimizing all of these charges becomes a foremost challenge for overseas trading.

  1. Shipping & Logistics

The dispatch of products from the company or a designated warehouse, to make it reach the doorstep of the customer is a challenge to adhere to. This is because International Shipping is complex, unpredictable and expensive. Transporting products from one country to another requires legal documents. The mode of transportation (air, road or water) and costs associated with each are also a prime challenge to be calculated. Additionally, some countries have their norms and product restrictions which one should be considerably aware of and address it accordingly. Also, certain valuable products demand insurance. Such parameters and the costs involved are a must and customers should be made aware of them at the time of shopping. The time between an order placement by a customer up till it reaches their house and the cost to make that happen have become the most challenging aspects to attain the right balance. Many companies just outsource this entire section of operations to 3PLs (Third-Party Logistics), to avoid the hustle. 

  1. Return Policy 

Providing for returns in itself becomes a challenge and an additional cost to the companies in cross-border trading. However, almost 90% customers certainly look forward to this policy to be assured of getting the right color, fit and feel of the product. Strategising return policies becomes a task for cross-border e-commerce.

  1. Custom Experience & Target Catalog

Customers would not buy it unless they can relate to the product and website. Creating a platform that people can easily access from their phones, desktops or any other device can be feasible but presenting each product in a local and custom way can be a challenge. This is because different places have different climates and cultures that influence the lifestyle and shopping habits of the people. Similarly, companies have to forecast a target catalog based on seasonal shopping habits and frequently browsed products. Maintaining different target catalogs, in different time zones is not a challenge but customizing them to present in a certain way is a concern.

SEA Key Players and Platforms for Cross-border E-commerce

Southeast Asian Countries have been an eye for e-commerce trading for both local and foreign investors. The demand and shopping habits attract a lot of companies and platforms to perform and compete amongst the bunch of islands. 

The Top 3 Players

The cross-border trading has been dominated by China globally. A lot of products are imported and bought from China. However, the SEA Big 6 countries have shown deliberate inputs to entertain cross-border orders, especially countries like Vietnam, Thailand & Indonesia. Singapore has maximum buying capacity but accounts for more retail sales still. 

South Asia Ecommerce Market Size
(Image Source: Statista - https://www.statista.com/statistics/647645/southeast-asia-ecommerce-market-size-country/)

The Top 3 Platforms

The top 3 online platforms that cater for the traffic of Southeast Asian e-commerce shopping are Shoppee, Lazada and Tokopedia; further followed by Qoo10, Tiki, Sendo, Bukalapak, etc. 

Shoppee acquires major markets in Southeast Asia with diverse features for both C2C and B2C trading. Lazada is now a subsidiary of Chinese e-commerce giant Alibaba with a B2C trading model and strict approval regulations. Tokopedia is a key player in Indonesia with an ever-expanding product portfolio and combining many products and services under one platform. 

Most visited ecommerce websites in southeast asia
(Image Source: https://www.linkedin.com/pulse/top-7-ecommerce-southeast-asia-sen-khoo-/?trk=pulse-article_more-articles_related-content-card )

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The Top 3 Categories

The top 3 categories that Southeast Asians shop for are mostly associated with fashion like apparel, footwear and beauty care or cosmetics. The other product categories to ping the list include furniture and home decor, baby products and games, followed by electronics. 

Major Trends driving Cross-border E-commerce in SouthEast Asia

The Southeast Asian countries have understood the cross-border e-commerce challenges and adopted to actively work on them to further explore the untapped potentials of the entire SEA market. The majority of challenges are the current trends paving the path for more cross-border e-commerce trading. A few are discussed below:

Trend #1 Mobile commerce

Mobile Commerce is the concept of shopping from a website and making online payments using a mobile with an internet connection. Southeast Asia is considered as the first densely populated region with billion people using mobile internet and the second largest e-commerce market. It is this convenience that has connected the world into a single entity and further encourages cross-border trading without any social or cultural barriers.

Trend #2 Cross-border platform usage

Several e-commerce platforms have upgraded to cross-border platform usage features to enable vendors to easily sell abroad in different nations. The sellers are benefited from extended sales and customers get access to more products including those that are domestically not available. 

Trend #3 Increased Social Media Usage

Online channels, especially social media have helped sellers reach out and also influence their target customers like never before. The channel has attracted international customers as well. As per Statista, about 21% of online shopping was recorded via social commerce in SEA, in 2021. Some more interesting statistics regarding the social media trends in SEA are mentioned as follows:

  • Malaysia shows a 91.7% of social media penetration rate.
  • About 52% of shoppers consider influencer recommendations in Thailand.
  • Philippines people’s average daily time spent on social media is about 4 hours (and 8 minutes).

Trend #4 Custom & Personal Touch 

Customising a product and the shopping experience, both make on the top list for e-commerce sellers to attract more customers. Customising the product catalogue based on the locality and season also makes it convenient for customers to shop online. For example, one would look for umbrellas or raincoats in rainy seasons only. But as an exception, if we refer to a place like the Indian city of Bangalore or any African tropical city where it rains any time of the day, the markets can show and sell umbrellas throughout. 

Trend #5 Enhanced Customer Service

The customer needs are being accommodated by the e-commerce market like never before. Several payment methods are made available with uber security and care. Blockchain technology is adopted to secure and add transparency to cross-border online transactions. The customers are also provided with expedited shipping and delivery at minimal or no costs. 

Strategies for Cross-border E-commerce Growth

The cross-border trading growth is inevitable in Southeast Asia. Moreover, it can be fired further considering the following pointers:

  • Building brand loyalty: More the people know a brand and adore it, the more sales it can make over the years just through its quality and word-of-mouth. 
  • Enable multi-channel payment methods: More payment options attract more customers of different age groups and across different territories.
  • Create a user-centric online shopping experience: More a customer can relate to the product one might want or category one wants to shop from, the more likely s/he is to make the purchase (provided with all the convenience).


About 55% of the total online shopping that happens in Singapore is cross-border trading. This marks just the beginning of cross-border e-commerce in SEA and the world. The growing population with high income, increase in mobile internet fostering m-commerce, rise in social media penetration aiding social commerce and advanced technology like blockchain supporting multiple payment options would further encourage cross-border e-commerce. Addressing customisation and logistics can help increase the current stats.

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