Asia-Pacific’s share of worldwide ecommerce sales is increasing at a breathtaking pace. According to Euromonitor International, the region led the world in terms of retail sales growth in 2023, the sixth time out of the last ten years it has done so, recording a year-on-year increase of 3% – compared to growth of only 1% for the retail sector globally. In 2023, the region already accounted for 46% of the world’s online retail sales by value, and from 2023 to 2028, it is expected to account for 54% of the world’s total ecommerce sales growth.
Three major demographic shifts help explain the remarkable ascent of Asia-Pacific as an ecommerce market over the last decade. One is the growth of the middle class, which Euromonitor International defines as households with annual disposable incomes of USD 45,000-100,000 in developed economies and households with annual disposable incomes of USD 15,000-45,000 in developing economies. According to Euromonitor International, the proportion of middle-class households across Asia-Pacific increased from 18% to 28% between 2013 and 2023. The middle-class surge in the region has been accompanied by a corresponding increase in disposable incomes and discretionary spending, helping to power an unprecedented online sales boom.
The second shift is the rising tide of urbanisation. Between 2013 and 2023, Asia-Pacific flipped from having a majority rural population to a majority urban one. The higher population densities of cities support the growth of retail ecommerce, as it is far easier and cost-effective to build and operate the infrastructure needed to support the delivery of online orders in urban centres than in more sparsely populated rural areas. The third shift is a massive increase in the levels of internet connectivity across Asia-Pacific, with the share of the population using the internet more than doubling from 27% in 2013 to 61% in 2023, according to Euromonitor International. Now, when most consumers can access the internet from their smartphones, the potential of the region’s ecommerce sector is being fully unleashed.
These demographic and economic shifts have helped shape Asia-Pacific into the world’s laboratory of retail innovation, particularly in ecommerce and mobile ecommerce (m-commerce). Already, the most groundbreaking concepts revolutionising global retail – concepts such as super apps, supermarket quick commerce, and livestreaming ecommerce – are appearing in Asian markets before spreading to the rest of the world. Thanks to its massive population and remarkable track record of economic development, China has long been the motor of Asia-Pacific’s online sales boom and the birthplace of the most important ecommerce innovations. Indeed, according to Euromonitor International, China surpassed the US in 2022 to become the world’s leading retail ecommerce market by sales. In the process, China-based online marketplace operators like Alibaba, JD.com, and ByteDance – which owns popular social media platforms Douyin and TikTok – have become global giants.
As these Chinese ecommerce behemoths contend with mounting competition and slowing growth at home, many are looking to expand abroad. Indonesia – with its huge population, rapidly growing middle class, and booming ecommerce sector – is an especially enticing target. According to Euromonitor International, from 2013 to 2023, ecommerce penetration in Indonesian retail increased from just 1% to 31%, one of the highest rates of any country in the world. Today, Chinese ecommerce players are taking active measures to ensure they do not miss out on the action.
Perhaps nothing demonstrates the lengths that Chinese ecommerce retailers will go to protect their access to the lucrative Indonesian market like the saga of ByteDance. By 2023, thanks to the exploding popularity of livestreaming ecommerce in the country, Euromonitor International calculates that Indonesia had become ByteDance’s second-largest market by retail sales, behind only China itself. In October 2023, however, the Indonesian government enacted a law that effectively blocked the TikTok Shop livestreaming ecommerce feature. Although TikTok itself was not banned, users could no longer buy or sell goods through the platform. ByteDance was down but not out. In December 2023, it agreed to pay USD 840 million to acquire the majority of Indonesian tech giant GoTo’s ecommerce unit, Tokopedia, the largest online sales platform in the country. The move allowed TikTok to reinstate its online shopping operations in Indonesia and integrate TikTok Shop’s Indonesia business into the enlarged Tokopedia entity. Following the acquisition, which closed in January 2024, Euromonitor International expects that China-based retailers will account for over 50% of Indonesia’s total retail ecommerce sales in 2024.
Bob Hoyler is a manager at Euromonitor International, focused on sharing insights about the evolving retail and ecommerce landscape. Based out of Chicago, he has a decade of experience in the industry. Bob helps oversee Euromonitor’s global retail, digital consumer, and ecommerce syndicated research products, with a focus on content and client engagement.
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