KOREA FOUNDATION

COLUMN

The Growth of Online Platforms
in ASEAN countries
By _Na Seung-gwon, Senior Researcher, Global Strategy Team, Korea Institute for International Economic Policy

The recent boom in online platforms is not only happening in the e-commerce sector, the representative application of the format, but across the goods and services industries, including tourism and accommodations, content, finance, education, and medical care. Out of these, e-commerce, the sharing economy, and OTT services are particularly notable fields for ASEAN countries in terms of market size and the vitalization of their domestic platforms. The e-commerce industry accounts for 68% of ASEAN’s total online market, and major local platforms such as Shopee, Lazada, and Tokopedia are leading the market. Shopee is currently the No. 1 e-commerce platform in most ASEAN countries except Indonesia, and Lazada also ranks at second or third place in most. Meanwhile, Tokopedia is the No. 1 e-commerce platform in Indonesia, the largest market in ASEAN, and is currently focusing on expanding its influence in other ASEAN countries. Recently, the company was rebranded as GoTo Group following a merger with Gojek, another massive online platform in the country. It is expected to develop into a regional giant encompassing the transportation and logistics sectors.

In the sharing economy sector, ride sharing platforms such as Grab and Gojek are market leaders in ASEAN. Best know through companies like Uber, the ride sharing sector is one of the most prominent areas of the global sharing economy. Since the emergence of Grab in ASEAN, the ride sharing market is considered the field that leads the growth of online platforms in the region. Building upon their success in the ride sharing sector, these platforms are expanding their service areas to various other industries, such as food delivery, electronic payment, and daily services. Grab is particularly drawing attention as the exemplary online platform in ASEAN by establishing a de facto monopoly in the market with the acquisition of Uber’s Southeast Asian business in 2018.

On the other hand, OTT service represent a rapidly growing field worldwide due to changes in content consumption trends and the spread of the COVID-19 pandemic. With low maturity levels in domestic content consumption, local platforms such as iFlix and Hooq have performed poorly and are facing difficulties such as suspension of services or acquisition by overseas companies. Netflix has emerged as the No. 1 platform in ASEAN, and major Chinese platforms such as iQiyi and Tencent are also entering the ASEAN market in earnest, reflecting an increased domestic and international interest in the ASEAN OTT market.