Southeast Asia’s e-commerce market is projected to become the world’s second fastest-growing by 2029, driven largely by the rise of digital payments and the growing role of small and medium enterprises (SMEs), according to a study commissioned by payments platform 2C2P by Antom.
The study, conducted by market intelligence firm IDC, projected that the region’s e-commerce market will grow at a compound annual growth rate of 13.2% from 2024 to 2029, trailing only India. Total market value is expected to reach $289.8 billion by 2029, up 85.4% from 2024 levels.
IDC said digital payments are expected to account for 97% of all e-commerce transactions in Southeast Asia by 2029, compared to 89% in 2024. Domestic payment schemes and mobile wallets are seen driving much of the growth, particularly in Indonesia, Thailand, and Vietnam.
The report projected that domestic payment methods such as real-time payments and local bank-based schemes will grow 104% to $92 billion by 2029 from $45.1 billion in 2024.
Mobile wallets are expected to rise 107% to $79 billion over the same period, while Buy Now Pay Later (BNPL) transactions could increase 174% to $18.9 billion.
The study also highlighted the role of SMEs in the region’s digital economy. IDC said SMEs are expected to contribute 58% of Southeast Asia’s e-commerce value by 2029.
The survey, which covered 600 SMEs across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, found that 66% of SMEs now sell online. However, one-third still rely heavily on cash transactions because of issues such as integration complexity, fraud concerns, high fees, and infrastructure limitations.
IDC added that 63% of SMEs surveyed said their current payment systems need upgrades or replacement to support emerging payment trends.
While only 49% of SMEs currently engage in cross-border trade, three-quarters said they plan to expand internationally within the next two years. IDC estimated that broader SME participation in cross-border e-commerce could generate an additional $20.8 billion in sales by 2029.
“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,” said Worachat Luxkanalode, Group CEO of 2C2P by Antom.
He added that SMEs remain central to the region’s economy but continue to face challenges in digital transformation as payment ecosystems evolve across markets.
