rown, so have demands from consumers for a highly personalised, integrated, one-stop-shop experience delivered seamlessly through multiple retail channels. Impressive milestones regional e-commerce platforms have hit during shopping festivals in Southeast Asia illustrate the phenomenon. Singapore-based e-commerce platform Shopee broke its 2020 record with over 2 billion items sold throughout the 11.11 Global Shopping Festival last November (Singles Day in China); the number of visits to the platform was five-and-a-half times higher in the first two hours than on an average day. Alibaba’s Lazada had its orders nearly double during the 11.11 festival, and sales from LazLive increased seven-fold during its 12.12 Super Sale Day in December.  E-commerce continues to thrive in Southeast Asia Although physical stores will continue to play a role, the rise of technology and e-commerce has shifted consumer behaviour and preferences. The EY Future Consumer Index shows that 54 per cent of consumers in APAC are doing their grocery shopping both online and in person, and 64 per cent are willing to share personal data for a tailored online experience. Businesses are also stepping up their game to meet consumer demands. A recent study by Oxford Economics and SAP found that 61 per cent of larger Southeast Asian enterprises are expected to continue to transform digitally or make substantial progress toward digital transformation in the next three years. Online marketplaces such as Lazada, Shopee, Tiki and Tokopedia dominate the e-commerce market in Southeast Asia, accounting for 65-75 per cent of the e-commerce Gross Merchandise Value (GMV) in Indonesia, Malaysia and Singapore, and 35-50 per cent of GMV in Thailand, Vietnam and the Philippines, Google’s e-Conomy SEA 2021 shows. With consumers moving online at blistering speeds, competition among new and incumbent retailers is fierce. Here are five key e-commerce trends to watch as retailers reshape their strategies.  DTC is poised to grow Consumers in Southeast Asia are more open to digital engagement with brands than those in Western countries and prefer making direct purchases from brand websites. The VMware Digital Frontiers 3.0 study last year found that 69 per cent of consumers in Southeast Asia engaged with brands digitally, compared with 30-40 per cent in Western countries.  One of the leading DTC players in the region, Love, Bonito – a fashion line targeted at Asian women with a presence in 10 markets – raised over US$50 million in funding in October 2021 for market expansion. Consumers in Southeast Asia perceive products on brand websites to be more reliable than shopping on online marketplaces. Market research by Ipsos and Sixth Factor has found they are also more willing to pay up to a 20 per cent premium for direct purchases from brand websites, making DTC a feasible model. Based on benchmarking studies for developed countries, DTC can scale up to reach 20-30 per cent of sales.  2. Quick commerce will continue to gain traction Retail competition is so fierce in South Korea that overnight delivery no longer satisfies local consumers, giving rise to quick commerce – or q-commerce – with goods arriving within an hour after an order is placed. The nation’s largest e-commerce retailer, Coupang, pledges that orders for daily necessities on its food delivery platform, Coupang Eats, will arrive within 15 minutes. The trend is gaining traction in Southeast Asia, especially in dense urban areas of Singapore, Indonesia, Thailand, and Malaysia. To succeed in q-commerce, businesses need a strong network of hyper-local micro-fulfilment centres (also known as dark stores) and multiple merchants, well-connected logistics infrastructure in high-density urban cities, and a large delivery workforce to handle consumer demand.  Taking Coupang as an example, it has over 200 warehouses spanning 1,858,000sqm and thousands of drivers across South Korea. Nationwide, 70 per cent of the population lives within 10 minutes of a Coupang logistics centre, making last-mile delivery easier to achieve. Retailers in Southeast Asia are also stepping up their game. GrabMart and Pandamart promise to provide consumers with everything from groceries to medicines to portable aroma diffusers almost instantly, whenever and wherever they want. To achieve that, Pandamart has partnered with over 25,000 retail stores across 12 Asian markets and witnessed year-on-year growth of around 450 per cent in Asia in 2021. GrabMart parent Grab Holdings recently acquired a majority stake in Jaya Grocer, a leading mass-premium supermarket chain in Malaysia, to roll out on-demand grocery, which will ultimately evolve into q-commerce. 3. Social commerce will remain a preferred shopping channel Social commerce is another rising trend, as it allows consumers to make purchases through social media channels such as Facebook, Instagram, TikTok, Zalo, etc. Among the entire population in Southeast Asia (approximately 670 million people), close to 70 per cent are active users of social media and 52 per cent check social media11 for information before a purchase.  Within the first half of 2021, orders and GMV in the region’s social commerce sector jumped 102 per cent and 91 per cent, respectively, compared with the same period last year. Social commerce is particularly successful in Thailand, Vietnam, and the Philippines due to high social media penetration and willingness among merchants to use social media platforms. Social commerce promises incredible potential driven by strong collaboration with influencers. For this emerging model to succeed, software tools for merchants, a seamless shopping experience, and robust data privacy tools must be available.  4. Live commerce is set to expand Live commerce (also known as “shoppentertainment”) is an interactive shopping experience that allows consumers to watch hosts present products live, ask questions about the product, place orders, and in some instances, pay within the app itself. Shopee has witnessed significant consumer engagement with its livestreaming feature, Shopee Live. In 2019, over 20 million hours of livestreams were watched on Shopee Live and in-app games were played more than 2.5 billion times in Southeast Asia and Taiwan for three weeks after Singles Day. Although livestreaming is a relatively new phenomenon in Southeast Asia, the e-commerce model is well established in China and provides a beacon for the region’s growth trajectory. Taobao, a Chinese online shopping platform owned by tech giant Alibaba, launched Taobao Live in May 2016 and witnessed 100 per cent growth in streamers and a 661 per cent increase in daily active users (DAU) in 2019. There is significant investment to support this trend: Kumu, a live-streaming app in the Philippines with over 10 million registered users from 55 countries, raised over US$100 million in funding in October 2021. But competition in this arena is incredibly fierce. To succeed, strong partnerships with Key Opinion Leaders (KOL) or influencers and an integrated experience from product discovery to check-out are essential. 5. Group buying is on the rise Group buy commerce is still in its early stage within the region but holds potential in less-developed areas with limited e-commerce penetration. China’s e-commerce platform Pinduoduo launched ‘group buy’ functions, which allow consumers either to buy products direct or through group buying, which allows discounts of up to 90 per cent when multiple users purchase the same item within a short period of time. Through this feature, Pinduoduo was able to lead the penetration of discount platforms in China in 2017, at 19.4 per cent, against 1.3 per cent for its closest competitor. This model is especially successful in tier two and three cities in China, and it is likely to see similar traction in Southeast Asia. KitaBeli, an Indonesian social commerce app for group buying that specialises in daily essentials, has received funding of US$10 million and has grown 80 per cent month-over-month since its launch in March 2020. WEBUY, a Singapore-based social e-commerce platform that runs on a group-buying model, was established in 2020 and supports 3000 group leaders and 100,000 consumers across Singapore, Malaysia, and Indonesia.  The 2020s are shaping up to be a disruptive decade for retailers and consumers in Southeast Asia, and e-commerce will continuously evolve and change in response. Incumbent players cannot rest on their laurels. In addition to accelerating their own digital transformation, they must sustain their focus on consumers and what drives them. All players need to re-evaluate the consumer journey and continually assess their offering so they can respond nimbly to the future consumer’s continuum of preferences and attributes.