Southeast Asia’s e-commerce industry is expected to become the second fastest-growing market globally by 2029, according to a new study released by 2C2P and Antom in partnership with market intelligence firm IDC.
The report projects the region’s e-commerce market to grow at a 13.2% compound annual growth rate (CAGR) from 2024 to 2029, trailing only India. Southeast Asia’s total e-commerce value is expected to reach US$289.8 billion by 2029, representing an 85.4% increase from current levels.
Digital payments expected to dominate Southeast Asia e-commerce growth
The study highlights how digital payments continue reshaping online commerce across Southeast Asia, particularly through the rise of mobile wallets and domestic payment systems.
According to the report, digital payments will account for 97% of all e-commerce transactions in the region by 2029, up from 89% in 2024. Among the fastest-growing payment categories are domestic payments and real-time bank transfers, mobile wallets, and Buy Now Pay Later (BNPL) services.
Domestic payments are projected to grow by 104%, increasing from US$45.1 billion in 2024 to US$92 billion by 2029. These systems are expected to overtake cards as the largest contributor to Southeast Asia’s digital payments sector.
Meanwhile, mobile wallets are forecast to grow by 107%, reaching US$79 billion by 2029. BNPL services are projected to see the fastest growth, expanding by 174% over the same period.
The findings reflect broader regional trends where consumers increasingly prefer localized payment methods over traditional credit card systems.
Low card penetration continues driving fintech adoption
The report noted that structural gaps in banking access remain a major factor behind Southeast Asia’s digital payment boom.
With 56% of the region still considered uncarded based on World Bank data, digital wallets and real-time payment systems have become essential alternatives for online commerce.
Countries such as Indonesia, Thailand, Vietnam, and the Philippines continue seeing strong adoption of QR payments, bank transfers, and e-wallet ecosystems as smartphone penetration expands.
This shift has also fueled competition among fintech platforms, digital banks, and payment providers seeking to simplify online transactions for both consumers and businesses.
SMEs emerging as a key growth driver in Southeast Asia
The study also focused heavily on small and medium enterprises (SMEs), which are becoming increasingly active in digital commerce across Southeast Asia. Researchers surveyed 600 SMEs across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
The findings show that 66% of SMEs now sell online, reflecting growing participation in the region’s digital economy.
However, many businesses still face barriers to digitalization. Around one-third of surveyed SMEs continue relying heavily on cash transactions despite operating in increasingly digital markets. Key challenges identified include high transaction fees, fraud concerns, integration complexity, infrastructure limitations, and regulatory pressures.
The study also found that 63% of SMEs believe their current payment systems require upgrades to support emerging payment technologies and evolving customer preferences.
Cross-border e-commerce seen as major opportunity
Cross-border trade remains an underdeveloped opportunity for many Southeast Asian SMEs despite growing international ambitions. While only 49% of surveyed SMEs currently participate in cross-border commerce, around 75% plan to expand internationally within the next two years.
IDC estimates that improving SME participation in cross-border e-commerce could unlock an additional US$20.8 billion in regional sales by 2029, representing a 7.1% increase in Southeast Asia’s total e-commerce value.
The report suggests that payment infrastructure capable of supporting multiple local payment systems, currencies, and regional integrations will become increasingly important as businesses scale across borders.
Southeast Asia’s digital economy continues evolving
The latest projections reinforce Southeast Asia’s position as one of the fastest-evolving digital commerce markets globally, fueled by mobile-first consumers, fintech growth, and expanding SME participation.
As digital payments become the default option for online transactions, businesses across the region are expected to invest more heavily in payment infrastructure, localized checkout experiences, and cross-border commerce capabilities to remain competitive in the region’s rapidly expanding digital economy.
