Southeast Asia E-commerce Market Set for Rapid Expansion
A new report forecasts the regional online market will reach US$400 billion by 2031 amid shifting payment trends.
Updated on Oct. 15, 2026 in Retail
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Xendit and Cube project Southeast Asia's e-commerce market will grow to US$400 billion by 2031, following a 2025 valuation of US$197 billion. Major platforms including Shopee, Lazada, and TikTok Shop saw combined growth of 33% year on year during the first quarter of 2026.
Why it matters
Merchants must navigate highly diverse checkout requirements as payment preferences vary significantly across different markets in the region. While 92% of business leaders identify diverse payment options as critical, only 12% feel their infrastructure is ready for the next decade.
Platform quarterly net merchandise value rose to US$39 billion in 2026, up from US$29 billion in the prior period. Additionally, VietQR transaction value increased by 151% throughout 2025.
The players
Xendit
This payment infrastructure company specializes in providing financial technology solutions for businesses operating across Southeast Asia.
Cube
This firm provides strategic consulting and market research services often focused on the digital economy.
Shopee
A dominant e-commerce platform in Southeast Asia that provides online shopping and integrated payment services.
Lazada
A regional e-commerce giant backed by international investment that operates extensive logistics and retail networks.
TikTok Shop
An integrated e-commerce feature that allows users to purchase products directly through social media content streams.
The details
Businesses are actively seeking direct connections to local payment rails to streamline checkout processes as cash-on-delivery usage continues to decline. The report anticipates that the region will see its first purchases completed by an AI agent by 2027.
Timeline
2019: Cash-on-delivery made up about half of all regional transactions.
2025: The regional online market reached a value of US$197 billion.
Q1 2026: Major e-commerce platforms reported 33% year-on-year growth.
2027: AI agents are expected to complete their first online purchases.
2031: The regional e-commerce market is projected to reach US$400 billion.
Market Landscape
The transition away from legacy cash transactions towards local digital rails highlights the rapid maturation of the regional retail sector. This shift positions firms that offer flexible, localized payment integrations to capture significant market share from competitors.
Shoppers across Southeast Asia can expect faster and more diverse checkout options as businesses invest in local payment infrastructure. Consumers who currently rely on legacy payment methods like cash may find fewer checkout options available as retailers modernize their systems.
The takeaway
The move toward automated payment systems is essential for businesses trying to scale in fragmented Southeast Asian markets. Consumers should prepare for a future where AI-driven shopping experiences become standard alongside traditional card and QR-based payments.
Further reading
Learn more about the latest trends in the Retail sector.
Source note: This article includes information reported by Fintech Singapore.
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