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What are the world’s fastest growing large economies? You probably already know about Brazil, Russia, India and China. Together they’re the ‘BRIC’ countries – the supercharged economies set to drive global growth over the next 100 years. And that means they should play a big part in any exporter’s plans.
But they’re not the only players in an ever-expanding globalized marketplace. There's the ‘next eleven’ a high-growth, high-potential group that includes countries like Mexico, Iran, Pakistan and Egypt. And there's another group of countries that are often – and mistakenly – ignored by exporters: the Tiger Cub economies.
The World Economic Forum (WEF) declared: "In the nineteenth century, the world was Europeanised. In the twentieth century, it was Americanised. Now, it is being Asianised."2
In Southeast Asia, five emerging markets – Indonesia, Malaysia, the Philippines, Thailand and Vietnam – are the ones to watch. Economists have dubbed these five countries ‘The Tiger Cubs’, in recognition of their proximity and similarity to the original ‘Tiger Economies’, Hong Kong, Singapore, Taiwan and South Korea. The Tiger Economies accelerated from primarily agrarian economies to fully developed, high-income industrialized nations in just a few decades between the 1950s and 1990s. And that’s exactly what the Tiger Cubs are doing today.
Indonesia is the biggest player – so much so that a number of organizations, including the Organization for Economic Co-operation and Development (OECD), think Indonesia’s turbocharged long-term growth warrants its inclusion in the BRIC countries (making it ‘BRIIC’).
E-commerce across all the Tiger Cubs is booming, driven by a young population, high internet penetration rates, and a growing middle class with more disposable income available.
Indonesia is the biggest player – so much so that a number of organizations, including the Organization for Economic Co-operation and Development, think the country’s turbocharged long-term growth warrants its inclusion in the BRIC group.
In 2020, the highest total e-commerce revenue was recorded in Indonesia at approximately US$30 billion3 – perhaps unsurprising for a country with close to 140 million e-commerce users4. By 2025, this figure is expected to reach US$56 billion.
The shrewd exporter should also keep an eye on Malaysia, which last year had the highest average revenue per e-commerce user of all the Tiger Cub economies at ≈US$3415. This is expected to grow to around US$530 in 2025.
The other Tiger Cubs promise lucrative opportunities too, and with developments in international shipping making almost any market obtainable, there’s no reason your e-commerce business should not be thinking global.
Let’s get to know each of the Tiger Cub Economies a little better…
The largest economy in Southeast Asia by GDP and the fourth largest country by population in the world. A huge opportunity for any exporter.
The biggest e-commerce categories in Indonesia are Fashion (31% of total revenue) followed by Electronics & Media (23%) and Food & Personal Care (16%)10. Cross-border spending is exploding: in 2019, the country had a 814% increase in imported e-commerce parcels, from 6.1 million to 49.7 million11. The most popular overseas online shopping destinations are China, the US and Singapore. Due to underdeveloped fixed-line internet infrastructure, Indonesians rely on smartphones to shop; international merchants with a dedicated mobile app will be at an advantage.
The richest country of the Tiger Cub economies. Malaysia’s economy was hard hit by the pandemic but returned to growth in the fourth quarter of 2021.
The biggest e-commerce categories in Malaysia are travel (63% of the market), consumer electronics (10%) and fashion (9%)16. In 2020, cross-border e-commerce accounted for 44% of total e-commerce sales, with China, Singapore and Japan the top international shopping markets17. Social media is hugely popular there – one in six Malaysians spend more than nine hours a day on social platforms18 – presenting brands with an ideal way to reach and target prospects. Cross-border companies face challenges from the country’s geography and high B2C import taxes.
Private consumption and government infrastructure investments mean the Philippines is on track for strong growth in 2022. The country’s potential joining of the Regional Comprehensive Economic Partnership would make it more competitive as a manufacturing hub.
The most popular e-commerce categories in the Philippines are consumer electronics, fashion and personal care (health & beauty). E-commerce makes up just a small proportion of the country’s total retail market, yet growth is happening, driven by a young, digitally savvy population, and the pandemic nudging people online. 50% of all online consumers there have shopped cross-border23. The country has some of the highest rates of social media usage in the world and shoppers frequently make purchases via live streaming.
Rising inflation and oil prices will hit the Thai economy this year, yet the pandemic’s retreat will help the tourist-focused country achieve better growth than the previous two years.
In 2020, the most popular e-commerce categories in Thailand were mobile & electronics (purchased by 24.7% of online shoppers), fashion (14.6%) and beauty (11.9%)28. Thais are a nation of smartphone and social media users – consumers like browsing, chatting, shopping and accessing information on one device.
Cross-border e-commerce takes almost a third (32%) of the overall e-commerce market in Thailand29, with China, Japan and US the top online shopping destinations. International e-commerce merchants wishing to tap into the market must first register with the Department of Business Development (under the Ministry of Commerce) to obtain a license.
Following the pandemic, Vietnam’s economic recovery is expected to accelerate in 2022, with a revived services sector, and the country’s manufacturing industry benefitting from steady demand from the US, EU and China.
B2C e-commerce in Vietnam is experiencing an exciting era of development. Thanks to a rising middle class, e-commerce has a projected 29.6% compound annual growth rate (CAGR) to 202434.
In 2020, the most popular e-commerce categories in Vietnam were food (purchased by 52% of online shoppers); clothing, footwear & cosmetics (43%); and home appliances (33%)35. Vietnamese shoppers frequently look to overseas markets for wider product choice and value – cross-border transactions make up 38% of the country’s total e-commerce market – with the US, China and Japan the top destinations36. International merchants wishing to target Vietnamese consumers should be aware of the popularity of mobile commerce – in particular, in-app shopping.
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1 - Bangkok Post, July 2021
2 - Bangkok Post, July 2021
3 - Statista, published September 2021
4 - Statista, published September 2021
5 - Statista, published September 2021
6 - Worldometer, February 2022
7 - World Bank July 2020 data, Wikipedia
8 - International Monetary Fund, 2022
9 - Statista, published August 2021
10 - ecommerceDB, accessed February 2022
11 - JP Morgan, 2020
12 - Worldometer, February 2022
13 - World Bank July 2020 data, Wikipedia
14 - International Monetary Fund, 2022
15, 16, 17, 18 - JP Morgan, 2020
19 - Worldometer, February 2022
20 - World Bank July 2020 data, Wikipedia
21 - International Monetary Fund, 2022
22 - Statista, published December 2021
23 - J P Morgan, 2021
24 - Worldometer, February 2022
25 - World Bank July 2020 data, Wikipedia
26 - International Monetary Fund, 2022
27 - Statista, published September 2021
28 - Statista, published December 2021
29 - J P Morgan, 2020
30 - Worldometer, February 2022
31 - World Bank July 2020 data, Wikipedia
32 - International Monetary Fund, 2022
33 - Statista, published July 2021
34 - J P Morgan, 2021
35 - Statista, published July 2021
36 - J P Morgan, 2021