Singapore: The online retail market in the six ASEAN economies has the potential to grow 25 percent annually through 2017, a study said Friday.
"Presently, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam account for less than one percent of global online retail, even though it has 3 to 4 percent of global Gross Domestic Product and around 8 percent of the population," said Geir Olsen, head of AT Kearney's Consumer Industries and Retail Practice in Asia Pacific and China and co-author of the study.
The online retail market in the six countries has the potential to grow 25 percent annually through 2017, the study said.
"We see considerable growth potential for the ASEAN e-commerce market, but only if it overcomes five significant barriers that stand in its way," he said of the study "Lifting the Barriers to E-Commerce in ASEAN".
Globally, only China is expected to experience similar growth rates in online retail.
The London-based consultancy believes that there are distinct actions the region can take to surmount each barrier and pave the way for sustained growth: Increase broadband access; Support local offers; Reinforce online security; Promote e-payment; and Improve logistics and trade efficiency.
Online users are just 29 percent of the ASEAN 6 population, compared to 46 percent in China and more than 90 per cent in Japan.
In Vietnam, the Philippines, Thailand and Indonesia, about or less than half of the population uses the Internet; only Singapore's access to fixed broadband compares to markets such as the United States.
"Even though mobile broadband is quickly spreading, limited fixed broadband connectivity is an issue, largely due to its continued unaffordability in many ASEAN 6 countries," said Soon Ghee Chua, managing director of AT Kearney's Southeast Asia Unit and co-author of the study.
The study pointed out that state aid would be essential for improving the region's access, especially in remote and poorer areas.
"In order to encourage local companies to participate in the online-trend, access to finance needs to be improved, the integration of digital talent needs to be fostered and the awareness of e-commerce marketplaces needs to be promoted", said Olivier Gergele, Principal with AT Kearney's Consumer Industries and Retail Practice.
