Cheap Chinese goods bring joy to Southeast Asia’s shoppers. What’s the trade-off?

Consumers celebrate the savings, but governments from Indonesia to Malaysia face pressure to protect local manufacturers from the influx

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A shopper looks at the Temu app. E-commerce platforms like Temu and Shopee offer affordability with just a few clicks. Photo: Bloomberg

Published: 8:00am, 16 Sep 2024

Small southeast Asian manufacturers feel increasingly besieged by the avalanche of cheap Chinese imports that’s threatening their business models, but the region’s consumers are revelling in the affordability of toys, cosmetics and jeans – often just a few clicks away on platforms like Shopee or Temu.

The deluge of low-cost goods is putting the heat on the governments of Indonesia, Thailand and Malaysia to protect local manufacturers by implementing or raising sales taxes on e-commerce platforms.

Yet for many Southeast Asian consumers, this influx of affordable products provides a welcome relief amid stubbornly high living cost – allowing them to stretch their budgets beyond essentials like energy and rent.

For Malaysian mother Cindy Hong, online shopping has been a game-changer. She has found budget-friendly Christmas gifts and toys for her daughter’s birthday on Shopee, often choosing items shipped directly from China.

“It is just so much cheaper than the branded toys in the shops, and more importantly, my daughter is perfectly happy with what she gets,” said Hong, 45, a human resources executive.

Workers arrange stuffed toys for sale in Kuala Lumpur. E-commerce platforms are often much more affordable than regular shops. Photo: AFP

The consumer e-commerce market is booming in Malaysia, with revenue projected to reach US$7.88 billion this year – a 14 per cent increase from the previous year, according to data gathering and visualisation platform Statista. Electronics lead the charge, expected to generate US$2.06 billion, closely followed by fashion at US$2.04 billion. The beauty and personal care sector is set to contribute US$880 million, while furniture sales are projected at US$820 million.