Blog

Southeast Asia E-Commerce Market Entry: 6 Best Markets

Summary:

Southeast Asia e-commerce market entry decisions default to Indonesia because of its GMV headline — but “biggest” and “best fit” are different questions, and 2026 country-level data shows smaller markets often offer better early traction.
Regional GMV is tracking toward $215–230 billion in 2026, up from $159 billion in 2024 — real growth, but moderated from the 19–22% rates seen in 2021–2022 to a steadier mid-to-high-teens pace.
Indonesia holds roughly 28–41% of regional GMV depending on the measure, but Thailand (+21.7%), the Philippines (+23%), and Vietnam (+18–25%) are growing faster in percentage terms — meaning population size and growth rate point to genuinely different first-market choices.
Any brand entering SEA e-commerce today is choosing a platform-and-format strategy, not just a country — content commerce alone generated $49.7 billion in GMV in 2025, now 32% of total platform GMV, up from 20% in 2024.

The GMV Numbers, and Why They Mislead

A successful Southeast Asia e-commerce market entry strategy requires more than choosing the country with the largest gross merchandise value (GMV). Brands must also assess category fit, consumer behaviour, platform competition, and operational readiness before committing to a launch market.

Southeast Asia’s e-commerce GMV reached $159 billion in 2024 and is tracking toward $215–230 billion by the end of 2026 — a real, substantial market by any global standard. Indonesia dominates the regional headline, holding somewhere between 28% and 41% of total GMV depending on which measure you use (platform GMV versus broader e-commerce market value), with an estimated $65 billion in 2025 GMV alone.

That headline number is exactly why so many brands default to “enter Indonesia first” without examining what’s actually happening underneath it. Growth rate tells a different story than absolute size: Thailand is growing at roughly 21.7%, the Philippines at approximately 23%, and Vietnam somewhere between 18–25%, all comfortably outpacing Indonesia’s own growth rate in percentage terms. A market that’s smaller today but compounding faster can offer better early traction for a new entrant — particularly one without the balance sheet to fight for share in the region’s single most contested, most competed-over market from day one.

Regional growth itself has also moderated. The 19–22% annual growth rates common in 2021–2022 have settled into a steadier mid-to-high-teens pace — still strong by global e-commerce standards, but a meaningfully different planning assumption than the pandemic-era numbers many market-entry decks are still built around.

Matching Category to Country

For companies planning a Southeast Asia e-commerce market entry, category-level demand can be just as important as overall market size. Understanding local shopping habits helps brands identify where their products are most likely to gain traction.

Country-level GMV and growth rates only tell part of the story — what actually sells, and where, matters just as much for a first-market decision.

Apparel, footwear, and accessories lead the region by category, holding roughly 26% of total e-commerce market share in 2025. That dominance isn’t accidental: it’s driven by a young, fashion-aware population, frequent product refresh cycles, and — critically — social commerce and live-streaming formats that behave completely differently from Western-style catalog e-commerce. A brand whose category performs well in this format-driven environment has a structurally different (and often better) path to traction than one relying on traditional search-and-browse e-commerce behavior.

This category-fit lens should shape country sequencing directly. Indonesia’s social-commerce infrastructure is exceptionally mature — video-commerce sellers grew 75% year-over-year to 800,000, with annual video-commerce transactions up 90% to 2.6 billion — making it a strong fit specifically for categories that perform well in live-stream and short-video formats. A brand in a category that doesn’t naturally lend itself to that format (certain B2B-adjacent or considered-purchase categories, for instance) may find a market with more traditional e-commerce behavior patterns, even if smaller, a better fit than fighting for attention in Indonesia’s format-dominant environment.

Social Commerce Isn't Optional in SEA

For brands used to Western e-commerce, social commerce in Southeast Asia isn’t a marketing channel layered on top of a store — it’s often the primary transaction mechanism itself. Content commerce (live-streaming and shoppable video) generated $49.7 billion in GMV in 2025, now representing 32% of total platform GMV, up sharply from 20% in 2024. That’s not a niche behavior; it’s approaching a third of all platform commerce in the region.

This has direct implications for Southeast Asia e-commerce market entry planning. A brand budgeting primarily for static product listings and paid search, without a genuine live-stream and short-video content strategy, is planning for a smaller share of the actual purchase behavior happening in-market. Conversion data reinforces this: live-stream commerce converts at rates several times higher than static listings, and products with substantial review counts convert meaningfully better than those without — meaning content and social proof aren’t optional polish, they’re core conversion infrastructure in this market in a way they simply aren’t in most Western e-commerce contexts.

Logistics Maturity by Market

Fulfilment used to be one of the biggest barriers to Southeast Asia e-commerce entry. It still matters, but it’s a meaningfully smaller barrier than it was even three years ago. The region’s express delivery market handled roughly 14.94 billion parcels in 2023 and is projected to reach 37.99 billion by 2029 — a 16.82% compound annual growth rate that reflects genuine infrastructure maturity, not just demand growth.

Dominant logistics players have professionalised fast. Shopee Express now delivers roughly half of Shopee’s SEA parcels in under two days, while J&T Express commands a 28.6% regional market share. Same-day delivery is already standard in major cities across Singapore, Malaysia, and Thailand, and is extending rapidly into secondary markets. This doesn’t eliminate fulfilment as an entry consideration — logistics maturity still varies meaningfully by country and by tier of city within a country — but it does mean fulfilment infrastructure is now less of a differentiator between markets than it was during the region’s earlier growth phase, and more of a baseline expectation.

Payment Localisation Realities

Payment method preference varies dramatically by market, and getting this wrong at launch directly costs conversion — card-only checkout, for instance, loses the large majority of buyers in several SEA markets where cards were never the dominant payment behavior to begin with.

Cash-on-delivery is collapsing regionally but persists unevenly. COD represented 52% of all e-commerce payments across the region in 2019; by Q1 2026 that had fallen to roughly 31%, with projections below 10% by 2028. But the regional average conceals enormous variation: COD remains strongest in the Philippines (around 42% by order preference) and Indonesia (around 38%), reflecting genuinely lower banking penetration — roughly half of Philippine adults remain unbanked — while it’s already nearly extinct in Singapore, Malaysia, and Thailand, where digital wallets and cards dominate checkout.

Digital wallets have become the default payment rail across most of the region: GoPay, OVO, and DANA together handle roughly 56% of Indonesian e-commerce transactions, while Malaysia’s digital wallets captured 26% of e-commerce value and the Philippines’ GCash-led wallet ecosystem accounted for 41% of e-commerce payment value in 2025. The practical takeaway for market entry: a payment stack that isn’t localized to the specific wallet and COD mix of your target market — not just “Southeast Asia” generically — will lose conversion at checkout regardless of how strong the product-market fit is upstream.

A Simple Framework for Picking Your Pilot Market

The right Southeast Asia e-commerce market entry plan should connect market selection with a realistic launch budget, localized payment methods, and a scalable fulfilment strategy

Pulling the data together into a usable framework, four factors should drive a Southeast Asia e-commerce market entry decision, weighted by your specific business rather than applied generically:

Category fit with format-driven commerce. If your product performs well in live-stream and short-video selling formats, weight markets with mature social commerce infrastructure — Indonesia and increasingly Vietnam — more heavily. If it doesn’t, a market with more traditional e-commerce behavior may be a better first bet even at smaller absolute size.

Growth rate versus absolute size. Indonesia’s headline GMV is real, but Thailand, the Philippines, and Vietnam are all growing faster in percentage terms right now. A smaller market compounding at 20%+ annually can offer a better early-traction story — and less competitive pressure — than fighting for share in the region’s most contested market from day one.

Logistics maturity for your specific fulfilment model. Same-day delivery infrastructure is now strong in major cities across most of the region, but secondary-city and rural fulfilment still varies meaningfully — a consideration that matters more for certain product categories (fresh goods, larger items) than others.

Payment stack localization. Before committing to a first market, confirm your payment integration actually supports that market’s dominant rails — digital wallets in Indonesia and the Philippines, cards and wallets in Singapore and Malaysia, and a still-meaningful COD allowance in lower-banked markets — rather than assuming a single regional payment integration covers all six markets equally well.

None of these four factors point to the same “best” market for every brand. That’s the entire point: the right first market is a function of your specific category, growth appetite, fulfilment model, and payment readiness — not a ranking of which country has the biggest GMV headline.

Frequently Asked Questions

Is Indonesia always the best first market for Southeast Asia e-commerce entry?
Indonesia holds the largest GMV in the region, but Thailand, the Philippines, and Vietnam are all growing faster in percentage terms. The right first market depends on category fit, growth appetite, and logistics/payment readiness — not GMV size alone.

How big is the Southeast Asia e-commerce market in 2026?
Regional GMV is tracking toward $215–230 billion by the end of 2026, up from $159 billion in 2024, though growth has moderated from the 19–22% rates seen in 2021–2022 to a steadier mid-to-high-teens pace.

How important is social commerce for Southeast Asia e-commerce market entry?
Very. Content commerce (live-streaming and shoppable video) generated $49.7 billion in GMV in 2025 — 32% of total platform GMV, up from 20% in 2024. Brands without a genuine live-stream and short-video strategy are planning for a shrinking share of actual purchase behavior in the region.

What payment methods should I prioritize for Southeast Asia e-commerce?
It depends entirely on your target market. Digital wallets dominate in Indonesia (GoPay, OVO, DANA — ~56% of transactions), Malaysia, and the Philippines (GCash), while cash-on-delivery still matters in lower-banked markets like the Philippines and Indonesia. Card-only checkout loses the majority of buyers in several SEA markets.

Category and Logistics Fit Beat Population Size

Choosing the right Southeast Asia e-commerce market entry strategy starts with evidence, not assumptions. Compare market opportunities against your product, competitors, and resources before deciding where to launch first.

Everything above points to the same conclusion: the ranking that matters isn’t which SEA country has the biggest e-commerce market — it’s which market fits your specific product, category, and operational readiness best. But the only way to actually know that fit is to run your own product against the data, not a generic regional framework.

Gateway’s free GTM report benchmarks your top 3 competitors and sizes TAM/SAM/SOM per country for your business specifically — not a one-size-fits-all ranking, but your actual numbers across all six markets.