24 Numbers to Size Up the Huge Potential of ASEAN Retail

Retailers in Singapore may be feeling the pinch, but there are still signs that the potential for ASEAN’s retail scene could be huge.

ASEAN, the Association of Southeast Asian Nations, was established in 1967 with aims that include the acceleration of economic growth, social progress, and cultural development for states within Southeast Asia. Today, ASEAN contains 10 member countries, namely, Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

A recent report by market researcher Frost and Sullivan contained 15 key figures on the ASEAN retail market:

  1. Retail sales in Thailand, Singapore, Malaysia, and Indonesia is estimated to be worth US$650 billion in 2015. This is expected to grow by 15% per year to US$1 trillion in 2018.
  2. Frost and Sullivan had pointed out three major trends that may drive higher retail sales in the four aforementioned ASEAN countries. The first is an expected increase in domestic consumption from 62% of GDP in 2010 to 75% of GDP by 2025. In here, Indonesia’s middle class is forecasted to make up 30% of its population in 2020. This is an increase from 26% in 2015.
  3. The second is the higher spending power of the four countries’ population, driven by high income growth. Singapore has the highest spending power in terms of GDP per capita amongst the four. Our Garden City has a GDP per capita of US$53,000 in 2015. This is followed by Malaysia’s US$10,000, Thailand’s US$5,000, and Indonesia’s US$3,000. From 2015 to 2020, these GDP per capita figures are expected to achieve compound annual growth rates (CAGRs) of 5.4%, 9.8%, 5.0%, and 5.0%, respectively.
    GDP per capita growth rates
  4. The third driver is eCommerce growth. Indonesia and Thailand had an eCommerce market size of US$1.1 billion each in 2014. The former’s eCommerce market is expected to grow at a rate of 38% annually up till 2017. The latter’s eCommerce growth is expected to expand at 19% per year for the same period. eCommerce in Singapore was US$0.9 billion in size in 2014 and is expected to compound at 13% per year till 2017. Malaysia’s eCommerce market is tinier at ‘just’ US$0.5 billion in 2014, but Frost and Sullivan projects 21% annual growth in the market till 2017.
  5. There are 43  retail companies listed in Singapore at end-2015. They had a collective market value of S$30 billion. The list of 43 includes department store operator Metro Holdings Limited (SGX: M01),  vehicle distributor Jardine Cycle & Carriage Ltd (SGX: C07), and luxury watch retailer Hour Glass Ltd (SGX: AGS).

The above represents just a small slice of the wealth of data shared in the report. From the data Frost and Sullivan had presented, it looks like ASEAN retail may become significant in the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.