Southeast Asia’s digital economy is entering another major growth phase, and small businesses are expected to play a much bigger role in shaping that future.
A new study commissioned by 2C2P by Antom reveals that Southeast Asia’s e-commerce market is projected to become the world’s second fastest-growing e-commerce region by 2029, trailing only India. For entrepreneurs, online sellers, and SMEs across the region, the findings highlight how digital payments and cross-border commerce are opening new opportunities for expansion.
According to the report conducted by market intelligence firm IDC, Southeast Asia’s e-commerce market is expected to grow at a 13.2% compound annual growth rate from 2024 to 2029. By the end of the forecast period, the market is projected to reach an estimated US$289.8 billion, marking an 85.4% increase from current levels.
Digital Payments Continue to Reshape Southeast Asia’s Shopping Habits
As online shopping continues to evolve, consumer payment behavior across Southeast Asia is shifting rapidly toward digital-first transactions.
The report found that digital payments are expected to account for 97% of all e-commerce transactions by 2029, a significant jump from 89% in 2024. This trend reflects how consumers are increasingly embracing faster, more convenient, and locally accessible payment methods.
Among the biggest growth drivers are domestic payment systems, mobile wallets, and Buy Now Pay Later (BNPL) services.
Mobile Wallets and Real-Time Payments Gain Momentum
Domestic payments, including real-time payment systems and local bank-based payment schemes, are projected to grow by 104% over the next few years. IDC estimates that this segment could reach US$92 billion by 2029, overtaking card payments as Southeast Asia’s leading digital payment method.
Meanwhile, mobile wallets are expected to see a 107% increase, growing from US$38.2 billion in 2024 to US$79 billion by 2029. Countries such as Indonesia, Thailand, and Vietnam are seeing especially strong adoption as consumers prioritize convenience and mobile accessibility.
BNPL services are also expanding rapidly. The report projects a 174% surge in BNPL transactions, potentially reaching US$18.9 billion by 2029.
These payment innovations are helping address long-standing financial access gaps across the region. With 56% of Southeast Asia’s population still considered uncarded according to World Bank data, digital wallets and local payment systems are becoming essential tools for online commerce participation.
SMEs Emerging as a Major Driver of E-Commerce Growth
One of the most notable findings from the study is the growing influence of SMEs in Southeast Asia’s digital economy.
IDC estimates that SMEs could contribute as much as 58% of Southeast Asia’s e-commerce market by 2029. The study surveyed 600 SMEs across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam to better understand how businesses are adapting to changing payment trends and digital commerce demands.
Currently, 66% of SMEs surveyed already sell online, signaling stronger participation in the region’s expanding digital marketplace. However, many businesses are still navigating challenges tied to digital transformation.
Digitalization Barriers Still Affect Many Businesses
Despite rapid e-commerce growth, many SMEs continue to rely heavily on cash transactions. In fact, one-third of surveyed businesses still use cash extensively in day-to-day operations, including companies in more digitally advanced markets like Singapore.
The report points to several ongoing obstacles slowing digital adoption, including:
- Integration complexity
- Fraud and cybersecurity concerns
- High transaction fees
- Infrastructure limitations
- Connectivity challenges
- Regulatory pressures
These issues vary across markets. Businesses in the Philippines and Indonesia continue to face infrastructure and connectivity barriers, while SMEs in Singapore and Vietnam are more concerned about security and system integration.
Additionally, 63% of respondents said their current payment systems may need upgrades or complete replacement to support emerging payment technologies and changing consumer preferences.
Cross-Border Expansion Becoming a Priority
Another major trend shaping the region’s e-commerce future is cross-border trade.
Although only 49% of SMEs currently engage in international selling, nearly three-quarters said they plan to expand overseas within the next two years. Businesses in Indonesia and Thailand are among the most aggressive in targeting new regional customer segments.
IDC estimates that improving SME participation in cross-border e-commerce could unlock an additional US$20.8 billion in regional sales by 2029. That would represent a 7.1% increase in Southeast Asia’s total e-commerce value.
For many SMEs, expanding internationally is no longer just an ambition. It is increasingly becoming a necessary growth strategy in an interconnected digital economy.
2C2P by Antom Highlights Need for Simplified Payment Solutions
According to Worachat Luxkanalode, businesses across Southeast Asia need more flexible and scalable payment solutions as the digital commerce landscape becomes more fragmented.
He explained that SMEs remain central to the region’s economic growth, contributing more than half of GDP in several major Southeast Asian markets while employing a significant share of the workforce.
Luxkanalode noted that many businesses are still navigating the complexities of digital transformation, especially as payment ecosystems evolve differently across countries.
He added that businesses need payment platforms capable of simplifying operations, supporting diverse local payment methods, and enabling smoother cross-border expansion through unified systems and APIs.
The latest projections reinforce Southeast Asia’s position as one of the world’s most important digital commerce regions. Beyond rising online sales, the report highlights how mobile payments, local financial technology solutions, and SME participation are transforming the region’s economic landscape.
For consumers, this means faster and more flexible ways to shop online. For businesses, particularly SMEs, it creates opportunities to reach wider markets and scale beyond local borders.
As digital payment adoption accelerates and more SMEs modernize their operations, Southeast Asia’s e-commerce ecosystem appears poised for another wave of long-term growth.








