Southeast Asia’s e-commerce market is on course to become the world’s second-fastest growing by 2029, expanding 85.4% to reach US$289.8 billion, according to a new study by IDC commissioned by payments platform 2C2P by Antom. The region is projected to grow at a 13.2% compound annual growth rate from 2024 to 2029, second only to India.

The report, titled How Southeast Asia Buys and Pays 2026, finds that digital payments are expected to account for 97% of e-commerce transactions in the region by 2029, up from 89% in 2024. The strongest growth is expected in domestic payment schemes, which are projected to overtake cards as the largest digital payment method by 2029, reaching US$92 billion.

Mobile Wallets and BNPL Leading the Charge

Mobile wallets are projected to grow 107% to US$79 billion by 2029, accounting for 27% of the regional e-commerce market. Buy Now Pay Later (BNPL) is forecast to record the sharpest growth at 174%, reaching US$18.9 billion. These payment modes are filling structural gaps created by low card penetration and large unbanked populations across markets such as Indonesia, Vietnam, and the Philippines.

SMEs as the Pivotal Growth Variable

The report introduces a dedicated SME study, surveying 600 SME respondents across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. SMEs are projected to contribute 58% of SEA’s e-commerce by 2029. While 66% of SMEs now sell online, significant barriers remain: fragmented payment systems, fraud concerns, settlement speeds, and integration complexity continue to limit cross-border scale-up.

Only 49% of SME respondents currently engage in cross-border trade, though three-quarters say they plan to expand internationally within two years. IDC estimates that enabling broader SME participation in cross-border e-commerce could unlock an additional US$20.8 billion in regional sales by 2029.

In Singapore specifically, one-third of SME respondents still report high cash usage despite the market’s digital maturity, a finding that points to uneven adoption even within the region’s most advanced digital economy.

“Southeast Asia’s businesses, and especially SMEs, are at the heart of the region’s economic growth, contributing more than 50% of GDP in major markets and employing 64.6% of the workforce, but many are still navigating the complexities of digital transformation.”
— Worachat Luxkanalode, Group CEO, 2C2P by Antom