Southeast Asia eCommerce set for strong growth by 2029

2C2P by Antom has published an IDC-backed study forecasting strong growth in Southeast Asia's eCommerce market, which it expects to become the world's second-fastest growing by 2029.

The report projects the market will expand 85.4% to USD $289.8 billion, with a compound annual growth rate of 13.2% from 2024 to 2029, second only to India.

Digital payments are expected to account for 97% of eCommerce transactions in the region by 2029, up from 89% in 2024. The study identifies domestic payment schemes, mobile wallets and cross-border digital commerce as the main drivers.

Domestic payment methods, including real-time payment systems and local bank-based schemes, are forecast to more than double to USD $92.0 billion by 2029 from USD $45.1 billion in 2024. That would make them the largest segment of Southeast Asia's digital payments market, overtaking cards and accounting for about 32% of the sector.

Mobile wallets are also expected to grow sharply, reaching USD $79.0 billion by 2029 from USD $38.2 billion in 2024. Their share of the eCommerce market is projected to rise to 27% from 24% over the same period.

Buy now, pay later services are forecast to post the fastest growth among the payment methods covered in the study, with usage rising 174% to USD $18.9 billion by 2029 from USD $6.9 billion in 2024.

The findings come as Southeast Asian governments, central banks and payments companies push for closer regional payment links. Cross-border QR payment programmes and real-time payment connections have been central to that effort, aimed at reducing friction in trade and travel across ASEAN.

SME gap

A substantial part of the study focuses on small and medium-sized enterprises, described as a large but under-analysed part of the region's digital economy. The survey covered 600 SMEs across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

According to the study, 66% of SMEs in those markets now sell online. Yet digital readiness remains uneven, with one-third of respondents still relying heavily on cash in day-to-day operations.

That pattern extends to Singapore, often seen as one of the region's most digitally developed markets. There, 33% of SMEs reported high cash usage despite widespread adoption of electronic payments in the broader economy.

Several factors continue to hold back SME digitisation, including integration complexity, fraud concerns, high fees and infrastructure limitations. The study also found that 63% of respondents believe their current payment systems need to be upgraded or replaced to support new payment trends.

Cross-border trade appears to be both a major opportunity and a constraint. While 49% of surveyed SMEs currently engage in cross-border commerce, three-quarters said they plan to expand internationally within two years.

IDC estimates that broader SME participation in cross-border eCommerce could add USD $20.8 billion in sales by 2029, representing a 7.1% increase in regional eCommerce value.

Market differences

The report points to wide variation across national markets. In Thailand, SMEs are focused on market expansion and payment improvements, while high fees, fraud concerns and integration issues remain the main barriers. In Vietnam, respondents highlighted security concerns, limited international payment support and data integration problems, even as mobile wallets and domestic payment systems gain ground.

In Malaysia, firms cited security and fraud concerns, limited payment options and integration complexity. In the Philippines, survey respondents identified transaction errors, data integration issues and slow settlements as key operational problems.

In Singapore, SMEs were more likely to cite high fees, slow settlements and a lack of mobile optimisation. The study describes the country as a mature but highly competitive market, where payment upgrades are driven more by efficiency and service than by first-time adoption.

Across the region, the rise of local payment methods is linked to structural factors such as low card penetration and limited access to traditional banking. The report cites World Bank data showing that 56% of the region remains uncarded, a gap that has helped drive the spread of mobile wallets and domestic account-to-account payment systems.

Worachat Luxkanalode, group CEO of 2C2P by Antom, said: "Amidst the continued growth of Southeast Asia's eCommerce markets, 2C2P by Antom is committed to equipping businesses of all sizes with the knowledge and payment solutions to navigate the complex and fragmented payment landscape of Southeast Asia. Southeast Asia's businesses, and especially SMEs, are at the heart of the region's economic growth-contributing more than 50% of GDP in major markets and employing 64.6% of the workforce-but many are still navigating the complexities of digital transformation."

He added: "As payment ecosystems evolve rapidly across different markets, businesses of all sizes need solutions that can simplify operations, support diverse local payment preferences, and enable them to scale across borders. With our enterprise-grade payments platform, businesses of all sizes can address these challenges through a single API, unlock new opportunities and fully participate in the region's prosperous digital economy."