Digital Commerce will continue to be a resilient driver of retail growth in Q2 2022

Lazada’s latest Digital Commerce Confidence Index reveals that seller confidence remained high following the first quarter of 2022 amid economic uncertainties and business challenges

Southeast Asian sellers continue to adopt a confident outlook on business growth, with 77% of online sellers expecting more than 10% increase in their sales for the next quarter, according to findings from Lazada’s Q1 2022 Digital Commerce Confidence Index (DCCI). As economies across the region gradually open up and ease restrictions on mobility and business activities, the latest report also found that sellers are also more optimistic about the state of the economy, with three out of four online sellers sharing the view that it will be better in the next quarter. 

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“With the fourth instalment of Lazada’s Digital Commerce Confidence Index, we see that sellers’ confidence continues to pick up as economies bounce back. According to Lazada Consumer Study, 73% of Southeast Asian consumers identified online shopping as integral to everyday life. Online sellers who can better understand digital shoppers’ preferences and category trends will be well positioned to stay competitive and win in the digital commerce industry,” said Magnus Ekbom, Chief Strategy Officer of Lazada Group.  

Sellers’ confidence extends the momentum from the last quarter of 2021, where 74% expected at least a 10% increase in sales in the subsequent quarter. Similarly, sellers who expect a decline in sales have decreased from 12% in Q4 2021 to 7% in Q1 2022. Festivals like Ramadan and Holy Week in celebrating countries, as well as the upcoming summer holidays are important drivers of the positive outlook, as these occasions often translate to increased demand and consumption of goods from buyers. 

To support this anticipated growth in online sales in the next quarter, 74% sellers said that they would further increase their inventory by at least 10% in the next three months and 47% said that they would increase staff resources, signifying confidence in their business growth. 

Conducted in the first quarter of 2022 with participation from 766 online sellers from across Southeast Asia, the report also found that sellers’ confidence is shared across categories, with general merchandise (81%), fashion (78%), and fast-moving consumer goods (76%) amongst the top three categories. This is also in line with consumers’ online shopping preferences, where fashion and health and beauty topping the charts for future online purchases, according to a recent Lazada Consumer Study of Southeast Asian consumers.  

Additionally, the same study also found that customers look for low prices, affordable shipping, ease of search and convenience when shopping online. According to the Lazada’s DCCI Q1 2022, businesses are in tune with these factors, and the need to put their efforts into attracting more customers to shop online and ensuring that their products are competitively priced – 58% of the sellers surveyed cited attracting more online traffic from shoppers and 56% stated increasing price competition as top two considerations for growth in the next quarter. On the other hand, more sellers are also citing high operations cost (23%) as a potential challenge, which is reflective of growing global uncertainties like rising inflation rates, geo-political instabilities affecting oil supply and disruptions to the global supply chains. 

DCCI is the first study of its kind that seeks to map out the trends in digital commerce by indexing the sentiments and confidence levels of Southeast Asian online sellers. It measures business confidence based on surveys benchmarking the opinions of online sellers in Southeast Asia (Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore). In the first quarter of 2022, Lazada surveyed 766 sellers on their current online sales performance and their expectations for their digital commerce business in the future. The index ranges from 0 to 100, with 0 being “very pessimistic” and 100 being “very optimistic” on the spectrum.

To view the findings in full, please visit https://group.lazada.com/en/press-release/