Strong infrastructure drives East Asia’s e-commerce dominance

East Asia has high disposable income, fast-paced lifestyles, and diversified delivery options.

East Asia is on track to maintain its leadership in e-commerce, expected to account for 85% of the region's online retail sales by 2028. According to Sachi Kimura, Consultant at Euromonitor International, the region’s dominance is driven by strong infrastructure, high purchasing power, and consumers' demand for convenience.

In 2023, East Asia, despite comprising only 36% of the Asia Pacific population, held 64% of the region's disposable income. This concentration of wealth has made the region a hub for e-commerce.

“According to our consumer survey, the ability to order anytime from anywhere ranked high in terms of online shopping motivation,” she explained, adding that the need for convenience is further supported by diversified delivery fulfilment methods in the region.

Certain product categories have seen higher e-commerce penetration in East Asia, particularly health and beauty products, as well as pet care items. “These industries have high dependency on personal preference, and e-commerce works well as the online space offers so much more variety in terms of product selection,” noted Kimura.

While health and beauty lead the way, Kimura also pointed to the growing momentum of other sectors, such as food and drinks. As consumers increasingly value convenience, more industries are capitalising on e-commerce platforms to meet these demands.

For businesses aiming to succeed in East Asia’s e-commerce market, Kimura stressed the importance of understanding the nuances of each industry. “Do not look at retail e-commerce as a whole, but look deeper into each industry,” she advised. For example, while South Korea’s retail e-commerce penetration stood at 46% in 2023, the penetration for alcoholic drinks was just 2%, largely due to strict online selling regulations.

Understanding consumer habits is also crucial, and businesses must keep an eye on the competitive landscape. Kimura recommended comparing the e-commerce market with the total retail landscape to identify niche or emerging players. “Spotting potential for disruption and adjusting strategy to either attack or defend market share is key to being competitive,” she said.