India and 10-member ASEAN are among the fastest growing economies in the world with even faster growth rates for e-commerce and digital trade sectors, according to a new report by industry body FICCI and consulting major KPMG.
By 2021, global e-commerce sales are expected to reach 4.5 trillion dollars, up from 1.3 trillion dollars in 2014.
"While China dominates the global e-commerce sector, India and ASEAN are among the fastest growing markets. Both regions are making investments to develop an ecosystem that can sustain and promote increasing digital trade."
The e-commerce market in India is estimated to reach 165.5 billion dollars by 2025 while the ASEAN is estimated to reach a volume of 90 billion dollars, said the report titled 'India and ASEAN: Co-creating the Future.'
The Association of Southeast Asian Nations (ASEAN) comprises Indonesia, Thailand, Malaysia, Singapore, Philippines, Vietnam, Cambodia, Myanmar, Brunei and Laos.
Within ASEAN, Indonesia's e-commerce market is likely to increase to 46 billion dollars by 2025 (from 1.7 billion dollars in 2015), Thailand to 11 billion dollars (0.9 billion dollars), Philippines to 9.7 billion dollars (0.5 billion dollars), Malaysia 8.2 billion dollars (1 billion dollars), Vietnam 7.5 billion dollars (0.4 billion dollars) and Singapore 5.4 billion dollars (1 billion dollars).
By 2025, China's e-commerce market will expand to a whopping 672 billion dollars.
The fast growth everywhere is led by rising internet penetration and smartphone use, a young population and an expanding middle class.
Significantly, cross-border e-commerce is expected to play a major role in supporting e-commerce expansion, with the sub-segment expected to reach 1 trillion dollars by 2020. This is driven by customers seeking lower prices and accessing unique or speciality products or brands not available in their home country.
However, the report cautions that the rapid adoption of e-commerce and digital platforms presents a new set of security challenges.
While governance of cyberspace and cybersecurity policies are still evolving, the time is ripe for India and ASEAN to elaborate on mechanisms for secure digital payments and other associated ecosystems, it said.